IFSA STRONGMAN, INC.
2006 SECOND INCENTIVE STOCK PLAN
THIS IFSA STRONGMAN, INC. 2006 SECOND INCENTIVE STOCK PLAN (the "Plan") is
designed to retain directors, executives and selected employees and consultants
and reward them for making major contributions to the success of the Company.
These objectives are accomplished by making long-term incentive awards under the
Plan thereby providing Participants with a proprietary interest in the growth
and performance of the Company.
1. Definitions.
(a) "Board" - The Board of Directors of the Company.
(b) "Code" - The Internal Revenue Code of 1986, as amended from time to
time.
(c) "Committee" - The Compensation Committee of the Company's Board, or
such other committee of the Board that is designated by the Board to
administer the Plan, composed of not less than two members of the
Board.
(d) "Company" - IFSA STRONGMAN, INC. and its subsidiaries including
subsidiaries of subsidiaries.
(e) "Exchange Act" - The Securities Exchange Act of 1934, as amended
from time to time.
(f) "Fair Market Value" - The fair market value of the Company's issued
and outstanding Stock as determined in good faith by the Board or
Committee.
(g) "Grant" - The grant of any form of stock option, stock award, or
stock purchase offer, whether granted singly, in combination or in
tandem, to a Participant pursuant to such terms, conditions and
limitations as the Committee may establish in order to fulfill the
objectives of the Plan.
(h) "Grant Agreement" - An agreement between the Company and a
Participant that sets forth the terms, conditions and limitations
applicable to a Grant.
(i) "Option" - Either an Incentive Stock Option, in accordance with
Section 422 of Code, or a Nonstatutory Option, to purchase the
Company's Stock that may be awarded to a Participant under the Plan.
A Participant who receives an award of an Option shall be referred
to as an "Optionee."
(j) "Participant" - A director, officer, employee or consultant of the
Company to whom an Award has been made under the Plan.
(k) "Restricted Stock Purchase Offer" - A Grant of the right to purchase
a specified number of shares of Stock pursuant to a written
agreement issued under the Plan.
(l) "Securities Act" - The Securities Act of 1933, as amended from time
to time.
(m) "Stock" - Authorized and issued or unissued shares of common stock
of the Company.
(n) "Stock Award" - A Grant made under the Plan in stock or denominated
in units of stock for which the Participant is not obligated to pay
additional consideration.
2. Administration. The Plan shall be administered by the Board, provided
however, that the Board may delegate such administration to the Committee.
Subject to the provisions of the Plan, the Board and/or the Committee
shall have authority to (a) grant, in its discretion, Incentive Stock
Options in accordance with Section 422 of the Code, or Nonstatutory
Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine
in good faith the fair market value of the Stock covered by any Grant; (c)
determine which eligible persons shall receive Grants and the number of
shares, restrictions, terms and conditions to be included in such Grants;
(d) construe and interpret the Plan; (e) promulgate, amend and rescind
rules and regulations relating to its administration, and correct defects,
omissions and inconsistencies in the Plan or any Grant; (f) consistent
with the Plan and with the consent of the Participant, as appropriate,
amend any outstanding Grant or amend the exercise date or dates thereof;
(g) determine the duration and purpose of leaves of absence which may be
granted to Participants without constituting termination of their
employment for the purpose of the Plan or any Grant; and (h) make all
other determinations necessary or advisable for the Plan's administration.
The interpretation and construction by the Board of any provisions of the
Plan or selection of Participants shall be conclusive and final. No member
of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Grant
made thereunder.
3. Eligibility.
(a) General: The persons who shall be eligible to receive Grants shall
be directors, officers, employees or consultants to the Company. The
term consultant shall mean any person, other than an employee, who
is engaged by the Company to render services and is compensated for
such services. An Optionee may hold more than one Option. Any
issuance of a Grant to an officer or director of the Company
subsequent to the first registration of any of the securities of the
Company under the Exchange Act shall comply with the requirements of
Rule 16b-3.
(b) Incentive Stock Options: Incentive Stock Options may only be issued
to employees of the Company. Incentive Stock Options may be granted
to officers or directors, provided they are also employees of the
Company. Payment of a director's fee shall not be sufficient to
constitute employment by the Company.
The Company shall not grant an Incentive Stock Option under
the Plan to any employee if such Grant would result in such employee
holding the right to exercise for the first time in any one calendar
year, under all Incentive Stock Options granted under the Plan or
any other plan maintained by the Company, with respect to shares of
Stock having an aggregate fair market value, determined as of the
date of the Option is granted, in excess of $100,000. Should it be
determined that an Incentive Stock Option granted under the Plan
exceeds such maximum for any reason other than a failure in good
faith to value the Stock subject to such option, the excess portion
of such option shall be considered a Nonstatutory Option. To the
extent the employee holds two (2) or more such Options which become
exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such Option as
Incentive Stock Options under the Federal tax laws shall be applied
on the basis of the order in which such Options are granted. If, for
any reason, an entire Option does not qualify as an Incentive Stock
Option by reason of exceeding such maximum, such Option shall be
considered a Nonstatutory Option.
-2-
(c) Nonstatutory Option: The provisions of the foregoing Section 3(b)
shall not apply to any Option designated as a "Nonstatutory Option"
or which sets forth the intention of the parties that the Option be
a Nonstatutory Option.
(d) Stock Awards and Restricted Stock Purchase Offers: The provisions of
this Section 3 shall not apply to any Stock Award or Restricted
Stock Purchase Offer under the Plan.
4. Stock.
(a) Authorized Stock: Stock subject to Grants may be either unissued or
reacquired Stock.
(b) Number of Shares: Subject to adjustment as provided in Section 5(i)
of the Plan, the total number of shares of Stock which may be
purchased or granted directly by Options, Stock Awards or Restricted
Stock Purchase Offers, or purchased indirectly through exercise of
Options granted under the Plan shall not exceed One Million Nine
Hundred Twelve Thousand Six Hundred Ninety-One (1,912,691). If any
Grant shall for any reason terminate or expire, any shares allocated
thereto but remaining unpurchased upon such expiration or
termination shall again be available for Grants with respect thereto
under the Plan as though no Grant had previously occurred with
respect to such shares. Any shares of Stock issued pursuant to a
Grant and repurchased pursuant to the terms thereof shall be
available for future Grants as though not previously covered by a
Grant.
(c) Reservation of Shares: The Company shall reserve and keep available
at all times during the term of the Plan such number of shares as
shall be sufficient to satisfy the requirements of the Plan. If,
after reasonable efforts, which efforts shall not include the
registration of the Plan or Grants under the Securities Act, the
Company is unable to obtain authority from any applicable regulatory
body, which authorization is deemed necessary by legal counsel for
the Company for the lawful issuance of shares hereunder, the Company
shall be relieved of any liability with respect to its failure to
issue and sell the shares for which such requisite authority was so
deemed necessary unless and until such authority is obtained.
(d) Application of Funds: The proceeds received by the Company from the
sale of Stock pursuant to the exercise of Options or rights under
Stock Purchase Agreements will be used for general corporate
purposes.
-3-
(e) No Obligation to Exercise: The issuance of a Grant shall impose no
obligation upon the Participant to exercise any rights under such
Grant.
5. Terms and Conditions of Options. Options granted hereunder shall be
evidenced by agreements between the Company and the respective Optionees,
in such form and substance as the Board or Committee shall from time to
time approve. The form of Incentive Stock Option Agreement attached hereto
as Exhibit A and the three forms of a Nonstatutory Stock Option Agreement
for employees, for directors and for consultants, attached hereto as
Exhibit B-1, Exhibit B-2 and Exhibit B-3, respectively, shall be deemed to
be approved by the Board. Option agreements need not be identical, and in
each case may include such provisions as the Board or Committee may
determine, but all such agreements shall be subject to and limited by the
following terms and conditions:
(a) Number of Shares: Each Option shall state the number of shares to
which it pertains.
(b) Exercise Price: Each Option shall state the exercise price, which
shall be determined as follows:
(i) Any Incentive Stock Option granted to a person who at the time
the Option is granted owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power or value of
all classes of stock of the Company ("Ten Percent Holder")
shall have an exercise price of no less than 110% of the Fair
Market Value of the Stock as of the date of grant; and
(ii) Incentive Stock Options granted to a person who at the time
the Option is granted is not a Ten Percent Holder shall have
an exercise price of no less than 100% of the Fair Market
Value of the Stock as of the date of grant.
For the purposes of this Section 5(b), the Fair Market Value
shall be as determined by the Board in good faith, which
determination shall be conclusive and binding; provided however,
that if there is a public market for such Stock, the Fair Market
Value per share shall be the average of the bid and asked prices (or
the closing price if such stock is listed on the NASDAQ National
Market System or Small Cap Issue Market) on the date of grant of the
Option, or if listed on a stock exchange, the closing price on such
exchange on such date of grant.
(c) Medium and Time of Payment: The exercise price shall become
immediately due upon exercise of the Option and shall be paid in
cash or check made payable to the Company. Should the Company's
outstanding Stock be registered under Section 12(g) of the Exchange
Act at the time the Option is exercised, then the exercise price may
also be paid as follows:
(i) in shares of Stock held by the Optionee for the requisite
period necessary to avoid a charge to the Company's earnings
for financial reporting purposes and valued at Fair Market
Value on the exercise date, or
(ii) through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable
written instructions (a) to a Company designated brokerage
firm to effect the immediate sale of the purchased shares and
remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment
taxes required to be withheld by the Company by reason of such
purchase and (b) to the Company to deliver the certificates
for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
-4-
At the discretion of the Board, exercisable either at the time
of Option grant or of Option exercise, the exercise price may also
be paid (i) by Optionee's delivery of a promissory note in form and
substance satisfactory to the Company and permissible under
applicable securities rules and bearing interest at a rate
determined by the Board in its sole discretion, but in no event less
than the minimum rate of interest required to avoid the imputation
of compensation income to the Optionee under the Federal tax laws,
or (ii) in such other form of consideration permitted by the State
of Delaware corporations law as may be acceptable to the Board.
(d) Term and Exercise of Options: Any Option granted to an employee of
the Company shall become exercisable over a period of no longer than
five (5) years. In no event shall any Option be exercisable after
the expiration of ten (10) years from the date it is granted, and no
Incentive Stock Option granted to a Ten Percent Holder shall, by its
terms, be exercisable after the expiration of five (5) years from
the date of the Option. Unless otherwise specified by the Board or
the Committee in the resolution authorizing such Option, the date of
grant of an Option shall be deemed to be the date upon which the
Board or the Committee authorizes the granting of such Option.
Each Option shall be exercisable to the nearest whole share,
in installments or otherwise, as the respective Option agreements
may provide. During the lifetime of an Optionee, the Option shall be
exercisable only by the Optionee and shall not be assignable or
transferable by the Optionee, and no other person shall acquire any
rights therein. To the extent not exercised, installments (if more
than one) shall accumulate, but shall be exercisable, in whole or in
part, only during the period for exercise as stated in the Option
agreement, whether or not other installments are then exercisable.
(e) Termination of Status as Employee, Consultant or Director: If
Optionee's status as an employee shall terminate for any reason
other than Optionee's disability or death, then Optionee (or if the
Optionee shall die after such termination, but prior to exercise,
Optionee's personal representative or the person entitled to succeed
to the Option) shall have the right to exercise the portions of any
of Optionee's Incentive Stock Options which were exercisable as of
the date of such termination, in whole or in part, not less than 30
days nor more than three (3) months after such termination (or, in
the event of "termination for good cause" as that term is defined in
Delaware case law related thereto, or by the terms of the Plan or
the Option Agreement or an employment agreement, the Option shall
automatically terminate as of the termination of employment as to
all shares covered by the Option).
With respect to Nonstatutory Options granted to employees,
directors or consultants, the Board may specify such period for
exercise, not less than 30 days (except that in the case of
"termination for cause" or removal of a director, the Option shall
automatically terminate as of the termination of employment or
services as to shares covered by the Option, following termination
of employment or services as the Board deems reasonable and
appropriate. The Option may be exercised only with respect to
installments that the Optionee could have exercised at the date of
termination of employment or services. Nothing contained herein or
in any Option granted pursuant hereto shall be construed to affect
or restrict in any way the right of the Company to terminate the
employment or services of an Optionee with or without cause.
-5-
(f) Disability of Optionee: If an Optionee is disabled (within the
meaning of Section 22(e)(3) of the Code) at the time of termination,
the three (3) month period set forth in Section 5(e) shall be a
period, as determined by the Board and set forth in the Option, of
not less than six months nor more than one year after such
termination.
(g) Death of Optionee: If an Optionee dies while employed by, engaged as
a consultant to, or serving as a Director of the Company, the
portion of such Optionee's Option which was exercisable at the date
of death may be exercised, in whole or in part, by the estate of the
decedent or by a person succeeding to the right to exercise such
Option at any time within (i) a period, as determined by the Board
and set forth in the Option, of not less than six (6) months nor
more than one (1) year after Optionee's death, which period shall
not be more, in the case of a Nonstatutory Option, than the period
for exercise following termination of employment or services, or
(ii) during the remaining term of the Option, whichever is the
lesser. The Option may be so exercised only with respect to
installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.
(h) Nontransferability of Option: No Option shall be transferable by the
Optionee, except by will or by the laws of descent and distribution.
(i) Recapitalization: Subject to any required action of shareholders,
the number of shares of Stock covered by each outstanding Option,
and the exercise price per share thereof set forth in each such
Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock of the Company
resulting from a stock split, stock dividend, combination,
subdivision or reclassification of shares, or the payment of a stock
dividend, or any other increase or decrease in the number of such
shares affected without receipt of consideration by the Company;
provided, however, the conversion of any convertible securities of
the Company shall not be deemed to have been "effected without
receipt of consideration" by the Company.
In the event of a proposed dissolution or liquidation of the
Company, a merger or consolidation in which the Company is not the
surviving entity, or a sale of all or substantially all of the
assets or capital stock of the Company (collectively, a
"Reorganization"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is
determined by the Board, which date shall be no later than the
consummation of such Reorganization. In such event, if the entity
which shall be the surviving entity does not tender to Optionee an
offer, for which it has no obligation to do so, to substitute for
any unexercised Option a stock option or capital stock of such
surviving of such surviving entity, as applicable, which on an
equitable basis shall provide the Optionee with substantially the
same economic benefit as such unexercised Option, then the Board may
grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30)
days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during
the remaining term of the Option, whichever is the lesser, to
exercise any unexpired Option or Options without regard to the
installment provisions of Paragraph 6(d) of the Plan; provided, that
any such right granted shall be granted to all Optionees not
receiving an offer to receive substitute options on a consistent
basis, and provided further, that any such exercise shall be subject
to the consummation of such Reorganization.
-6-
Subject to any required action of shareholders, if the Company
shall be the surviving entity in any merger or consolidation, each
outstanding Option thereafter shall pertain to and apply to the
securities to which a holder of shares of Stock equal to the shares
subject to the Option would have been entitled by reason of such
merger or consolidation.
In the event of a change in the Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares without par value into the same number of shares
with a par value, the shares resulting from any such change shall be
deemed to be the Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided in this Section 5(i),
the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class, and the number or price of shares of
Stock subject to any Option shall not be affected by, and no
adjustment shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.
The Grant of an Option pursuant to the Plan shall not affect
in any way the right or power of the Company to make any
adjustments, reclassifications, reorganizations or changes in its
capital or business structure or to merge, consolidate, dissolve, or
liquidate or to sell or transfer all or any part of its business or
assets.
(j) Rights as a Shareholder: An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until
the effective date of the issuance of the shares following exercise
of such Option by Optionee. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued,
except as expressly provided in Section 5(i) hereof.
(k) Modification, Acceleration, Extension, and Renewal of Options:
Subject to the terms and conditions and within the limitations of
the Plan, the Board may modify an Option, or, once an Option is
exercisable, accelerate the rate at which it may be exercised, and
may extend or renew outstanding Options granted under the Plan or
accept the surrender of outstanding Options (to the extent not
theretofore exercised) and authorize the granting of new Options in
substitution for such Options, provided such action is permissible
under Section 422 of the Code and applicable state securities rules.
Notwithstanding the provisions of this Section 5(k), however, no
modification of an Option shall, without the consent of the
Optionee, alter to the Optionee's detriment or impair any rights or
obligations under any Option theretofore granted under the Plan.
-7-
(l) Exercise Before Exercise Date: At the discretion of the Board, the
Option may, but need not, include a provision whereby the Optionee
may elect to exercise all or any portion of the Option prior to the
stated exercise date of the Option or any installment thereof. Any
shares so purchased prior to the stated exercise date shall be
subject to repurchase by the Company upon termination of Optionee's
employment as contemplated by Section 5(n) hereof prior to the
exercise date stated in the Option and such other restrictions and
conditions as the Board or Committee may deem advisable.
(m) Other Provisions: The Option agreements authorized under the Plan
shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the Options, as the Board or the
Committee shall deem advisable. Shares shall not be issued pursuant
to the exercise of an Option, if the exercise of such Option or the
issuance of shares thereunder would violate, in the opinion of legal
counsel for the Company, the provisions of any applicable law or the
rules or regulations of any applicable governmental or
administrative agency or body, such as the Code, the Securities Act,
the Exchange Act, applicable state securities rules, Delaware
corporation law, and the rules promulgated under the foregoing or
the rules and regulations of any exchange upon which the shares of
the Company are listed. Without limiting the generality of the
foregoing, the exercise of each Option shall be subject to the
condition that if at any time the Company shall determine that (i)
the satisfaction of withholding tax or other similar liabilities, or
(ii) the listing, registration or qualification of any shares
covered by such exercise upon any securities exchange or under any
state or federal law, or (iii) the consent or approval of any
regulatory body, or (iv) the perfection of any exemption from any
such withholding, listing, registration, qualification, consent or
approval is necessary or desirable in connection with such exercise
or the issuance of shares thereunder, then in any such event, such
exercise shall not be effective unless such withholding, listing
registration, qualification, consent, approval or exemption shall
have been effected, obtained or perfected free of any conditions not
acceptable to the Company.
(n) Repurchase Agreement: The Board may, in its discretion, require as a
condition to the Grant of an Option hereunder, that an Optionee
execute an agreement with the Company, in form and substance
satisfactory to the Board in its discretion ("Repurchase
Agreement"), (i) restricting the Optionee's right to transfer shares
purchased under such Option without first offering such shares to
the Company or another shareholder of the Company upon the same
terms and conditions as provided therein; and (ii) providing that
upon termination of Optionee's employment with the Company, for any
reason, the Company (or another shareholder of the Company, as
provided in the Repurchase Agreement) shall have the right at its
discretion (or the discretion of such other shareholders) to
purchase and/or redeem all such shares owned by the Optionee on the
date of termination of his or her employment at a price equal to:
(A) the fair value of such shares as of such date of termination; or
(B) if such repurchase right lapses at 20% of the number of shares
per year, the original purchase price of such shares, and upon terms
of payment permissible under applicable state securities rules;
provided that in the case of Options or Stock Awards granted to
officers, directors, consultants or affiliates of the Company, such
repurchase provisions may be subject to additional or greater
restrictions as determined by the Board or Committee.
-8-
6. Stock Awards and Restricted Stock Purchase Offers.
(a) Types of Grants.
(i) Stock Award. All or part of any Stock Award under the Plan may
be subject to conditions established by the Board or the
Committee, and set forth in the Stock Award Agreement, which
may include, but are not limited to, continuous service with
the Company, achievement of specific business objectives,
increases in specified indices, attaining growth rates and
other comparable measurements of Company performance. Such
Awards may be based on Fair Market Value or other specified
valuation. All Stock Awards will be made pursuant to the
execution of a Stock Award Agreement substantially in the form
attached hereto as Exhibit C.
(ii) Restricted Stock Purchase Offer. A Grant of a Restricted Stock
Purchase Offer under the Plan shall be subject to such (i)
vesting contingencies related to the Participant's continued
association with the Company for a specified time and (ii)
other specified conditions as the Board or Committee shall
determine, in their sole discretion, consistent with the
provisions of the Plan. All Restricted Stock Purchase Offers
shall be made pursuant to a Restricted Stock Purchase Offer
substantially in the form attached hereto as Exhibit D.
(b) Conditions and Restrictions. Shares of Stock which Participants may
receive as a Stock Award under a Stock Award Agreement or Restricted
Stock Purchase Offer under a Restricted Stock Purchase Offer may
include such restrictions as the Board or Committee, as applicable,
shall determine, including restrictions on transfer, repurchase
rights, right of first refusal, and forfeiture provisions. When
transfer of Stock is so restricted or subject to forfeiture
provisions it is referred to as "Restricted Stock". Further, with
Board or Committee approval, Stock Awards or Restricted Stock
Purchase Offers may be deferred, either in the form of installments
or a future lump sum distribution. The Board or Committee may permit
selected Participants to elect to defer distributions of Stock
Awards or Restricted Stock Purchase Offers in accordance with
procedures established by the Board or Committee to assure that such
deferrals comply with applicable requirements of the Code including,
at the choice of Participants, the capability to make further
deferrals for distribution after retirement. Any deferred
distribution, whether elected by the Participant or specified by the
Stock Award Agreement, Restricted Stock Purchase Offers or by the
Board or Committee, may require the payment be forfeited in
accordance with the provisions of Section 6(c). Dividends or
dividend equivalent rights may be extended to and made part of any
Stock Award or Restricted Stock Purchase Offers denominated in Stock
or units of Stock, subject to such terms, conditions and
restrictions as the Board or Committee may establish.
-9-
(c) Cancellation and Rescission of Grants. Unless the Stock Award
Agreement or Restricted Stock Purchase Offer specifies otherwise,
the Board or Committee, as applicable, may cancel any unexpired,
unpaid, or deferred Grants at any time if the Participant is not in
compliance with all other applicable provisions of the Stock Award
Agreement or Restricted Stock Purchase Offer, the Plan and with the
following conditions:
(i) A Participant shall not render services for any organization
or engage directly or indirectly in any business which, in the
judgment of the chief executive officer of the Company or
other senior officer designated by the Board or Committee, is
or becomes competitive with the Company, or which organization
or business, or the rendering of services to such organization
or business, is or becomes otherwise prejudicial to or in
conflict with the interests of the Company. For Participants
whose employment has terminated, the judgment of the chief
executive officer shall be based on the Participant's position
and responsibilities while employed by the Company, the
Participant's post-employment responsibilities and position
with the other organization or business, the extent of past,
current and potential competition or conflict between the
Company and the other organization or business, the effect on
the Company's customers, suppliers and competitors and such
other considerations as are deemed relevant given the
applicable facts and circumstances. A Participant who has
retired shall be free, however, to purchase as an investment
or otherwise, stock or other securities of such organization
or business so long as they are listed upon a recognized
securities exchange or traded over-the-counter, and such
investment does not represent a substantial investment to the
Participant or a greater than ten percent (10%) equity
interest in the organization or business.
(ii) A Participant shall not, without prior written authorization
from the Company, disclose to anyone outside the Company, or
use in other than the Company's business, any confidential
information or material, as defined in the Company's
Proprietary Information and Invention Agreement or similar
agreement regarding confidential information and intellectual
property, relating to the business of the Company, acquired by
the Participant either during or after employment with the
Company.
(iii) A Participant, pursuant to the Company's Proprietary
Information and Invention Agreement, shall disclose promptly
and assign to the Company all right, title and interest in any
invention or idea, patentable or not, made or conceived by the
Participant during employment by the Company, relating in any
manner to the actual or anticipated business, research or
development work of the Company and shall do anything
reasonably necessary to enable the Company to secure a patent
where appropriate in the United States and in foreign
countries.
(iv) Upon exercise, payment or delivery pursuant to a Grant, the
Participant shall certify on a form acceptable to the
Committee that he or she is in compliance with the terms and
conditions of the Plan. Failure to comply with all of the
provisions of this Section 6(c) prior to, or during the six
months after, any exercise, payment or delivery pursuant to a
Grant shall cause such exercise, payment or delivery to be
rescinded. The Company shall notify the Participant in writing
of any such rescission within two years after such exercise,
payment or delivery. Within ten days after receiving such a
notice from the Company, the Participant shall pay to the
Company the amount of any gain realized or payment received as
a result of the rescinded exercise, payment or delivery
pursuant to a Grant. Such payment shall be made either in cash
or by returning to the Company the number of shares of Stock
that the Participant received in connection with the rescinded
exercise, payment or delivery.
-10-
(d) Nonassignability.
(i) Except pursuant to Section 6(e)(iii) and except as set forth
in Section 6(d)(ii), no Grant or any other benefit under the
Plan shall be assignable or transferable, or payable to or
exercisable by, anyone other than the Participant to whom it
was granted.
(ii) Where a Participant terminates employment and retains a Grant
pursuant to Section 6(e)(ii) in order to assume a position
with a governmental, charitable or educational institution,
the Board or Committee, in its discretion and to the extent
permitted by law, may authorize a third party (including but
not limited to the trustee of a "blind" trust), acceptable to
the applicable governmental or institutional authorities, the
Participant and the Board or Committee, to act on behalf of
the Participant with regard to such Awards.
(e) Termination of Employment. If the employment or service to the
Company of a Participant terminates, other than pursuant to any of
the following provisions under this Section 6(e), all unexercised,
deferred and unpaid Stock Awards or Restricted Stock Purchase Offers
shall be cancelled immediately, unless the Stock Award Agreement or
Restricted Stock Purchase Offer provides otherwise:
(i) Retirement Under a Company Retirement Plan. When a
Participant's employment terminates as a result of retirement
in accordance with the terms of a Company retirement plan, the
Board or Committee may permit Stock Awards or Restricted Stock
Purchase Offers to continue in effect beyond the date of
retirement in accordance with the applicable Grant Agreement
and the exercisability and vesting of any such Grants may be
accelerated.
(ii) Rights in the Best Interests of the Company. When a
Participant resigns from the Company and, in the judgment of
the Board or Committee, the acceleration and/or continuation
of outstanding Stock Awards or Restricted Stock Purchase
Offers would be in the best interests of the Company, the
Board or Committee may (i) authorize, where appropriate, the
acceleration and/or continuation of all or any part of Grants
issued prior to such termination and (ii) permit the exercise,
vesting and payment of such Grants for such period as may be
set forth in the applicable Grant Agreement, subject to
earlier cancellation pursuant to Section 9 or at such time as
the Board or Committee shall deem the continuation of all or
any part of the Participant's Grants are not in the Company's
best interest.
(iii) Death or Disability of a Participant.
(1) In the event of a Participant's death, the Participant's
estate or beneficiaries shall have a period up to the
expiration date specified in the Grant Agreement within
which to receive or exercise any outstanding Grant held
by the Participant under such terms as may be specified
in the applicable Grant Agreement. Rights to any such
outstanding Grants shall pass by will or the laws of
descent and distribution in the following order: (a) to
beneficiaries so designated by the Participant; if none,
then (b) to a legal representative of the Participant;
if none, then (c) to the persons entitled thereto as
determined by a court of competent jurisdiction. Grants
so passing shall be made at such times and in such
manner as if the Participant were living.
-11-
(2) In the event a Participant is deemed by the Board or
Committee to be unable to perform his or her usual
duties by reason of mental disorder or medical condition
which does not result from facts which would be grounds
for termination for cause, Grants and rights to any such
Grants may be paid to or exercised by the Participant,
if legally competent, or a committee or other legally
designated guardian or representative if the Participant
is legally incompetent by virtue of such disability.
(3) After the death or disability of a Participant, the
Board or Committee may in its sole discretion at any
time (1) terminate restrictions in Grant Agreements; (2)
accelerate any or all installments and rights; and (3)
instruct the Company to pay the total of any accelerated
payments in a lump sum to the Participant, the
Participant's estate, beneficiaries or representative;
notwithstanding that, in the absence of such termination
of restrictions or acceleration of payments, any or all
of the payments due under the Grant might ultimately
have become payable to other beneficiaries.
(4) In the event of uncertainty as to interpretation of or
controversies concerning this Section 6, the
determinations of the Board or Committee, as applicable,
shall be binding and conclusive.
7. Investment Intent. All Grants under the Plan are intended to be exempt
from registration under the Securities Act provided by Rule 701
thereunder. Unless and until the granting of Options or sale and issuance
of Stock subject to the Plan are registered under the Securities Act or
shall be exempt pursuant to the rules promulgated thereunder, each Grant
under the Plan shall provide that the purchases or other acquisitions of
Stock thereunder shall be for investment purposes and not with a view to,
or for resale in connection with, any distribution thereof. Further,
unless the issuance and sale of the Stock have been registered under the
Securities Act, each Grant shall provide that no shares shall be purchased
upon the exercise of the rights under such Grant unless and until (i) all
then applicable requirements of state and federal laws and regulatory
agencies shall have been fully complied with to the satisfaction of the
Company and its counsel, and (ii) if requested to do so by the Company,
the person exercising the rights under the Grant shall (i) give written
assurances as to knowledge and experience of such person (or a
representative employed by such person) in financial and business matters
and the ability of such person (or representative) to evaluate the merits
and risks of exercising the Option, and (ii) execute and deliver to the
Company a letter of investment intent and/or such other form related to
applicable exemptions from registration, all in such form and substance as
the Company may require. If shares are issued upon exercise of any rights
under a Grant without registration under the Securities Act, subsequent
registration of such shares shall relieve the purchaser thereof of any
investment restrictions or representations made upon the exercise of such
rights.
-12-
8. Amendment, Modification, Suspension or Discontinuance of the Plan. The
Board may, insofar as permitted by law, from time to time, with respect to
any shares at the time not subject to outstanding Grants, suspend or
terminate the Plan or revise or amend it in any respect whatsoever.
However, in the event that shareholders of the Company have previously
approved this Plan, the following revisions or amendments to the Plan can
not be made without the prior approval of the shareholders of the Company:
(i) increase the number of shares subject to the Plan, (ii) decrease the
price at which Grants may be granted, (iii) materially increase the
benefits to Participants, or (iv) change the class of persons eligible to
receive Grants under the Plan; provided, however, no such action shall
alter or impair the rights and obligations under any Option, or Stock
Award, or Restricted Stock Purchase Offer outstanding as of the date
thereof without the written consent of the Participant thereunder. No
Grant may be issued while the Plan is suspended or after it is terminated,
but the rights and obligations under any Grant issued while the Plan is in
effect shall not be impaired by suspension or termination of the Plan.
In the event of any change in the outstanding Stock by reason of a
stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger, or similar event, the Board or the Committee may
adjust proportionally (a) the number of shares of Stock (i) reserved under
the Plan, (ii) available for Incentive Stock Options and Nonstatutory
Options and (iii) covered by outstanding Stock Awards or Restricted Stock
Purchase Offers; (b) the Stock prices related to outstanding Grants; and
(c) the appropriate Fair Market Value and other price determinations for
such Grants. In the event of any other change affecting the Stock or any
distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee,
including adjustments to avoid fractional shares, shall be made to give
proper effect to such event. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board or the Committee shall be
authorized to issue or assume stock options, whether or not in a
transaction to which Section 424(a) of the Code applies, and other Grants
by means of substitution of new Grant Agreements for previously issued
Grants or an assumption of previously issued Grants.
9. Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Grant payment and withhold, at the time of delivery or
exercise of Options, Stock Awards or Restricted Stock Purchase Offers or
vesting of shares under such Grants, an appropriate number of shares for
payment of taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. If Stock is used to satisfy tax withholding,
such stock shall be valued based on the Fair Market Value when the tax
withholding is required to be made.
10. Availability of Information. During the term of the Plan and any
additional period during which a Grant granted pursuant to the Plan shall
be exercisable, the Company shall make available, not later than one
hundred and twenty (120) days following the close of each of its fiscal
years, such financial and other information regarding the Company as is
required by the bylaws of the Company and applicable law to be furnished
in an annual report to the shareholders of the Company.
11. Notice. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the chief personnel officer
or to the chief executive officer of the Company, and shall become
effective when it is received by the office of the chief personnel officer
or the chief executive officer.
-13-
12. Indemnification of Board. In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the
extent allowed by applicable law, the members of the Board and the
Committee shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred in
connection with the defense of any claim, action, suit or proceeding, or
in connection with any appeal thereof, to which they or any of them may be
a party by reason of any action taken, or failure to act, under or in
connection with the Plan or any Grant granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such claim, action, suit or
proceeding, except in any case in relation to matters as to which it shall
be adjudged in such claim, action, suit or proceeding that such Board or
Committee member is liable for negligence or misconduct in the performance
of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member
involved shall offer the Company, in writing, the opportunity, at its own
expense, to handle and defend the same.
13. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the
State of Delaware and construed accordingly.
14. Effective and Termination Dates. The Plan shall become effective on the
date it is approved by the holders of a majority of the shares of Stock
then outstanding. The Plan shall terminate ten years later, subject to
earlier termination by the Board pursuant to Section 8.
The foregoing 2006 Second Incentive Stock Plan (consisting of 14 pages,
including this page) was duly adopted and approved by the Board of Directors on
October __, 2006.
IFSA STRONGMAN, INC.,
a Delaware corporation
By: /s/ Jussi Laurimaa
------------------------------------
Jussi Laurimaa
Its: Chief Executive Officer
-14-