Exhibit 10.1 - 2006 Incentive Compensation Plan
LISKA BIOMETRY, INC.
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(THE "COMPANY")
2006 INCENTIVE COMPENSATION PLAN
1. PURPOSE
The purpose of this 2006 Incentive Compensation Plan of Liska Biometry, Inc. is
to advance the interests of the Company (as herein defined) by encouraging
Eligible Employees (as herein defined) to acquire shares of the Company, thereby
increasing their proprietary interest in the Company, encouraging them to remain
associated with the Company and furnishing them with additional incentive to
advance the interests of the Company in the conduct of their affairs.
2. DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or a Committee of the Board duly
appointed by the Board as the Administrator hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in the Securities Act.
(c) "Applicable Laws" means the legal requirements relating to the
administration of incentive compensation plans, if any, under
applicable provisions of federal securities laws, state corporate
and securities laws, the Securities Act, the rules of any applicable
stock exchange or national market system, and the rules of any
foreign jurisdiction applicable to Awards granted to residents
therein.
(d) "Award" means the grant of Performance Shares or other right or
benefit under the Plan.
(e) "Award Agreement" means the written agreement evidencing the grant
of an Award executed by the Company and the Grantee, including any
amendments thereto.
(f) "Board" means the Board of Directors of the Company.
(g) "Cause" means, with respect to the termination by the Company or a
Related Entity of the Grantee's Continuous Service, that such
termination is for `Cause' as such term is expressly defined in a
then-effective written agreement between the Grantee and the Company
or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination
of the Administrator, the Grantee's:
(i) refusal or failure to act in accordance with any specific,
lawful direction or order of the Company or a Related Entity;
(ii) unfitness or unavailability for service or unsatisfactory
performance (other than as a result of Disability);
(iii) performance of any act or failure to perform any act in bad
faith and to the detriment of the Company or a Related Entity;
(iv) dishonesty, intentional misconduct or material breach of any
agreement with the Company or a Related Entity; or
(v) commission of a crime involving dishonesty, breach of trust,
or physical or emotional harm to any person.
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(h) "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or related
group of persons (other than an acquisition by the Company or
by a Company-sponsored employee benefit plan or by a person
that directly or indirectly controls, is controlled by, or is
under common control with, the Company) of beneficial
ownership of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer
made directly to the Company's shareholders which a majority
of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such shareholders
accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by
reason of one or more contested elections for Board
membership, to be comprised of individuals who are Continuing
Directors.
(i) "Committee" means any committee appointed by the Board to administer
the Plan.
(j) "Common Stock" means the common stock of the Company.
(k) "Company" means Liska Biometry, Inc., a Florida company.
(l) "Consultant" means any person (other than an Employee or solely with
respect to rendering services in such person's capacity as a
Director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such
Related Entity.
(m) "Continuing Directors" means members of the Board who either (i)
have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than
thirty-six (36) months and were elected or nominated for election as
Board members by at least a majority of the Board members described
in clause 2.(h)(ii) who were still in office at the time such
election or nomination was approved by the Board.
(n) "Continuous Service" means that the provision of services to the
Company or a Related Entity in any capacity of Employee or
Consultant is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved
leave of absence, (ii) transfers between locations of the Company or
among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An
approved leave of absence shall include sick leave, military leave,
or any other authorized personal leave. No such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract.
(o) "Corporate Transaction" means any of the following transactions:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal
purpose of which is to change the jurisdiction in which the
Company is organized;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the
capital stock of the Company's subsidiary corporations) in
connection with the complete liquidation or dissolution of the
Company; or
(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to a person
or persons different from those who held such securities
immediately prior to such merger.
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(p) "Director" means a member of the Board or the board of directors of
any Related Entity.
(q) "Disability" means that a Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee
by reason of any medically determinable physical or mental
impairment. A Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.
(r) "Eligible Employee" means any person who is an Employee or a
Consultant.
(s) "Employee" means any person, including an Officer or Director, who
is a full-time or part-time employee of the Company or any Related
Entity.
(t) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) Where there exists a public market for the Common Stock, the
Fair Market Value shall be (A) the average closing price for a
Share for the last seven (7) market trading days prior to the
time of the determination (or, if no closing price was
reported on those days, on the last seven trading days on
which a closing price was reported) on the stock exchange
determined by the Administrator to be the primary market for
the Common Stock or the NASDAQ National Market, whichever is
applicable or (B) if the Common Stock is not traded on any
such exchange or national market system, the average of the
closing bid and asked prices of a Share on the NASDAQ Small
Cap Market for the seven (7) days prior to the time of the
determination (or, if no such prices were reported on those
days, on the last seven days on which such prices were
reported), in each case, as reported in The Wall Street
Journal or such other source as the Administrator deems
reliable; or
(ii) In the absence of an established market for the Common Stock
of the type described in 2.(t)(i), above, the Fair Market
Value thereof shall be determined by the Administrator in good
faith.
(u) "Grantee" means an Eligible Employee who receives an Award pursuant
to an Award Agreement under the Plan.
(v) "Insider" means:
(i) a Director or Senior Officer of the Company;
(ii) a Director or Senior Officer of a person that is itself an
Insider or Subsidiary of the Company;
(iii) a person that has:
A. direct or indirect beneficial ownership of,
B. control or direction over, or
C. a combination of direct or indirect beneficial ownership
of and control or direction over
securities of the Company carrying more than 10% of the voting
rights attached to all the Company's outstanding voting
securities, excluding, for the purpose of the calculation of
the percentage held, any securities held by the person as
underwriter in the course of a distribution, or
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(iv) the Company itself, if it has purchased, redeemed or otherwise
acquired any securities of its own issue, for so long as it
continues to hold those securities.
(w) "Officer" means a person who is an officer, including a Senior
Officer, of the Company or a Related Entity within the meaning
prescribed to under the Securities Act and the rules and regulations
promulgated thereunder.
(x) "Option" means an option to purchase Shares pursuant to an Award
Agreement granted under the Plan.
(y) "Parent" means a "parent corporation", whether now or hereafter
existing, which holds a majority of the voting shares of the
Company.
(z) "Performance Shares" means Shares or an Award denominated in Shares
which may be earned in whole or in part upon attainment of
performance criteria established by the Administrator not to exceed
an aggregate of 3,000,000 Shares.
(aa) "Performance Units" means an Award which may be earned in whole or
in part upon attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other
securities or a combination of cash, Shares or other securities as
established by the Administrator.
(bb) "Plan" means this 2006 Incentive Compensation Plan as approved by
Board consent with effect from March 13th, 2006.
(cc) "Related Entity" means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity
in which the Company, a Parent or a Subsidiary holds a substantial
ownership interest, directly or indirectly.
(dd) "Restricted Stock" means Shares issued under the Plan to the Grantee
for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture
provisions, and other terms and conditions as established by the
Administrator.
(ee) "SAR" means a stock appreciation right entitling the Grantee to
Shares or cash compensation, as established by the Administrator,
measured by appreciation in the value of Common Stock.
(ff) "Securities Act" means the Securities Act of 1933, as amended.
(gg) "Senior Officer" means:
(i) the chair or vice chair of the Board, the president, a
vice-president, the secretary, the treasurer or the general
manager of the Company;
(ii) any individual who performs functions for a person similar to
those normally performed by an individual occupying any office
specified in paragraph 2.(gg)(i) above, and
(iii) the five (5) highest paid employees of the Company, including
any individual referred to in paragraph 2.(gg)(i) or
2.(gg)(ii) and excluding a commissioned salesperson who does
not act in a managerial capacity.
(hh) "Share" means a share of the Common Stock.
(ii) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as determined by British Columbia corporate law.
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(jj) "Stock Incentive Plan" means the current stock option plan and any
subsequent such plans approved by the shareholders of the Company.
(kk) "Related Entity Disposition" means the sale, distribution or other
disposition by the Company of all or substantially all of the
Company's interests in any Related Entity effected by a sale, merger
or consolidation or other transaction involving that Related Entity
or the sale of all or substantially all of the assets of that
Related Entity.
3. OPTIONS ISSUED UNDER THE PLAN
All Options issued under the Plan shall be subject to the provisions of the
Stock Incentive Plan.
4. ADMINISTRATION
(a) Plan Administrator
(i) Administration with Respect to Eligible Employees. With
respect to grants of Awards to Eligible Employees, the Plan
shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted
in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
(ii) Administration Errors. In the event an Award is granted in a
manner inconsistent with the provisions of this subsection
4(a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the
Board, the Administrator shall have the authority, in its
discretion:
(i) to select the Eligible Employees to whom Awards may be granted
from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted
hereunder;
(iii) to determine the number of Performance Shares or the amount of
other consideration to be covered by each Award granted
hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted
hereunder;
(vi) to suspend the right of an Eligible Employee to receive an
Award for any reason that the Administrator considers in the
best interest of the Company;
(vii) to establish additional terms, conditions, rules or procedures
to accommodate the rules or laws of applicable foreign
jurisdictions and to afford Grantees favourable treatment
under such laws; provided, however, that no Award shall be
granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent
with the provisions of the Plan; and
(viii) to take such other action, not inconsistent with the terms of
the Plan, as the Administrator deems appropriate.
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(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be conclusive and
binding on all persons. However, the Board reserves the right to
override such decisions, determinations and interpretations of the
Administrator.
5. ELIGIBILITY
Awards may be granted to Eligible Employees. An Eligible Employee who has been
granted an Award may, if otherwise eligible, be granted additional Awards.
6. TERMS AND CONDITIONS OF AWARDS
(a) Type of Awards. The Administrator is authorized under the Plan to
award any type of arrangement to an Eligible Employee that is not
inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Performance Shares,
(ii) an Option, (iii) a SAR or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and
with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions, (iv) cash or (v) any other
security with the value derived from the value of the Shares. Such
Awards may include, without limitation, cash, Shares, Options, SARs,
Restricted Stock, Performance Units or Performance Shares, and an
Award may consist of one such security or benefit, or two (2) or
more of them in any combination or alternative.
(b) Designation of Award. Each Award shall be designated in the Award
Agreement.
(c) Conditions of Award. Subject to the terms of the Plan and Applicable
Laws, the Administrator shall determine the provisions, terms, and
conditions of each Award including, but not limited to, the Award
vesting schedule, forfeiture provisions, form of payment (cash,
Shares, or other consideration) upon settlement of the Award, and
satisfaction of any performance criteria. The performance criteria
established by the Administrator may be based on any one of, or
combination of, economic value added, market value added,
achievement of individual or corporate objectives, or other measures
of performance selected by the Administrator. Partial achievement of
the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award
Agreement.
(d) Acquisitions and Other Transactions. The Administrator may issue
Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest in a
Related Entity whether by merger, stock purchase, asset purchase or
other form of transaction.
(e) Deferral of Award Payment. The Administrator may establish one or
more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon an
Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt
of Shares or other consideration under an Award. The Administrator
may establish the election procedures, the timing of such elections,
the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and procedures
that the Administrator deems advisable for the administration of any
such deferral program.
(f) Award Exchange Programs. The Administrator may establish one or more
programs under the Plan to permit selected Grantees to exchange an
Award under the Plan for one or more other types of Awards under the
Plan on such terms and conditions as determined by the Administrator
from time to time.
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(g) Separate Programs. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing
particular forms of Awards to one or more classes of Grantees on
such terms and conditions as determined by the Administrator from
time to time.
(h) Term of Award. The term of each Award shall be the term stated in
the Award Agreement.
(i) Transferability of Awards. Awards shall be transferable to the
extent provided in the Award Agreement.
(j) Time of Granting Awards. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is
determined by the Administrator. Notice of the grant determination
shall be given to each Employee or Consultant to whom an Award is so
granted within a reasonable time after the date of such grant.
(k) Termination of Continuous Service. If Continuous Service is
terminated by the Company or a Related Party for Cause, or by a
Grantee voluntarily, any unvested benefits under the Plan will
expire. If Continuous Service is terminated by retirement, death or
Disability of a Grantee, or by the Company for other than Cause,
unvested benefits will be earned in accordance with the vesting
schedule in the Award Agreement.
(l) Shares Reserved.
(a) Pool. The aggregate number of shares of Stock that may be
issued under this Plan will not exceed THREE MILLION SHARES
(3,000,000) (the "Pool").
(b) Adjustments Upon Changes in Stock. In the event of any
change in the outstanding Stock of the Company as a result of a
stock split, reverse stock split, stock dividend, recapitalization,
combination or reclassification, appropriate proportionate
adjustments will be made in: (i) the aggregate number of shares of
Stock in the Pool that may be issued hereunder; (ii) other rights
and matters determined on a per share basis under this Plan
hereunder. Any such adjustments will be made only by the Board, and
when so made will be effective, conclusive and binding for all
purposes with respect to this Plan. No such adjustments will be
required by reason of the issuance or sale by the Company for cash
or other consideration of additional shares of its Stock or
securities convertible into or exchangeable for shares of its Stock.
7. CONDITIONS UPON ISSUANCE OF SHARES
(a) Shares shall not be issued pursuant to an Award unless such Award
and the issuance and delivery of such Shares pursuant thereto shall
comply with all Applicable Laws, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) As a condition to an Award, the Company may require the person
receiving Performance Shares to represent and warrant at the time of
any such Award that the Shares are only for investment and without
any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is
required by any Applicable Laws.
8. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/RELATED ENTITY DISPOSITIONS
Except as may be provided in an Award Agreement the Administrator shall have the
authority, exercisable either in advance of any actual or anticipated Corporate
Transaction, Change in Control or Related Entity Disposition or at the time of
an actual Corporate Transaction, Change in Control or Related Entity Disposition
at the time of the grant of an Award under the Plan or any time while an Award
remains outstanding, to provide for the full automatic vesting of one or more
outstanding unvested Awards under the Plan and the release from restrictions on
transfer and repurchase or forfeiture rights of such Awards in connection with a
Corporate Transaction, Change in Control or Related Entity Disposition, on such
terms and conditions as the Administrator may specify. The Administrator also
shall have the authority to condition any such Award vesting or release from
such limitations upon the subsequent termination of the Continuous Service of
the Grantee within a specified period following the effective date of the
Corporate Transaction, Change in Control or Related Entity Disposition. The
Administrator may provide that any Awards so vested or released from such
limitations in connection with a Change in Control or Related Entity Disposition
shall remain fully vested or released until the termination of the Award.
Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate unless assumed by the successor company or
its parent.
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9. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective as of March 13, 2006. It shall continue in
effect until March 13th, 2011 unless sooner terminated.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
(a) The Board may at any time amend, suspend or terminate the Plan. To
the extent necessary to comply with Applicable Laws, the Company
shall obtain shareholder approval of any Plan amendment in such a
manner and to such a degree as required.
(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.
(c) Any amendment, suspension or termination of the Plan (including
termination of the Plan under Section 10.(a), above) shall not
affect Awards already granted, and such Awards shall remain in full
force and effect as if the Plan had not been amended, suspended or
terminated, unless mutually agreed otherwise between the Grantee and
the Administrator, which agreement must be in writing and signed by
the Grantee and the Company.
11. NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP
The Plan shall not confer upon any Grantee any right with respect to the
Grantee's Continuous Service, nor shall it interfere in any way with his or her
right or the Company's right to terminate the Grantee's Continuous Service at
any time, with or without Cause.
12. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS
Except as specifically provided in a retirement or other benefit plan of the
Company or a Related Entity, Awards shall not be deemed compensation for
purposes of computing benefits or contributions under any retirement plan of the
Company or a Related Entity, and shall not affect any benefits under any other
benefit plan of any kind or any benefit plan subsequently instituted under which
the availability or amount of benefits is related to level of compensation.
13. GOVERNING LAW
The Plan shall be governed by the laws of the State of Florida and the Federal
laws of the United States applicable therein; provided, however, that any Award
Agreement may provide by its terms that it shall be governed by the laws of any
other jurisdiction as may be deemed appropriate by the parties thereto.
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CERTIFICATION IN SUPPORT
OF FORM S-8 FILING
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CHRIS LECLERC, of full age, as the President and CEO of Liska Biometry,
Inc. (the "Company") hereby certifies as follows:
1. I make this Certification in support of the S-8 Filing by the Company:
2. At the time of the S-8 filing for the following individuals, all
services performed by the recipients of the shares are for bona fide services
which do not violate any of the provisions of the use of Form S-8:
10.1 2006 Incentive Compensation Plan
I certify that the foregoing statements made by me are true. I am aware
that if any of the foregoing statements made by me are willfully false, I am
subject to punishment. LISKA BIOMETRY, INC.
DATE: March 14, 2006 By:
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Chris LeClerc
President and CEO
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