SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
|X| Preliminary information statement | | Confidential, for use of the
Commission only (as permitted
| | Definitive information statement by Rule 14c-5(d)(2))
Bio-American Capital Corporation.
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(Name of Registrant as Specified in Its Charter)
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|X| No fee required.
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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BIO-AMERICAN CAPITAL CORPORATION
498 Ellis Street, 2nd Floor
Penticton, British Columbia, Canada V2A 4M2
To the Holders of Common Stock of
Bio-American Capital Corporation
Bio-American Capital Corporation, a Nevada corporation ("Company"), has
obtained a written consent from the majority stockholder as of January 19, 2004,
approving a change in the capitalization of the Company to effect a reverse
split of the common stock at the rate of one share for every 200 shares
outstanding and thereafter to re-establish the authorized common stock, $.001
par value ("Common Stock"), at 50,000,000 shares and adopting a performance
equity plan for 10,000,000 shares (on a post-stock split basis) of Common Stock
("2004 Performance Equity Plan"). Details of the capitalization changes and 2004
Performance Equity Plan and other important information are set forth in the
accompanying Information Statement. The Board of Directors of the Company has
unanimously approved the capitalization changes and 2004 Performance Equity
Plan. Under Section 78.320 of the Nevada General Corporation Law, action by
stockholders may be taken without a meeting, without prior notice, by written
consent of the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize the action at a meeting at
which all shares entitled to vote thereon were present and voted. On that basis,
the majority stockholder approved the capitalization changes and 2004
Performance Equity Plan. No other vote or stockholder action is required. You
are hereby being provided with notice of the approval of the capitalization
changes and 2004 Performance Equity Plan by less than unanimous written consent
of the stockholders of the Company.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
By Order of the Board of Directors
Ted Kozub,
President
Penticton, British Columbia, Canada
January 30, 2004
BIO-AMERICAN CAPTIAL CORPORATION
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INFORMATION STATEMENT
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CONCERNING CORPORATE ACTION AUTHORIZED BY WRITTEN
CONSENT OF A STOCKHOLDER OWNING A MAJORITY
OF SHARES OF CAPITAL STOCK ENTITLED TO VOTE THEREON
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WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
-------------------------------------------
This Information Statement is being furnished to the stockholders of
Bio-American Capital Corporation, a Nevada corporation ("Company"), to advise
them of the corporate action described herein, which has been authorized by a
written consent of a stockholder owning a majority of the outstanding voting
securities of the Company entitled to vote thereon. This action is being taken
in accordance with the requirements of the general corporation law of the State
of Nevada ("NGCL").
The Company's Board of Directors ("Board") has determined that the
close of business on January 19, 2004 was the record date ("Record Date") for
the stockholders entitled to notice about the proposal authorizing changes in
the capitalization of the Company to effect a reverse split of the common stock
at the rate of one share of every 200 shares then outstanding (rounding up for
fractional shares) and thereafter to increase the number of authorized shares of
common stock, $.001 par value, to 50,000,000 ("Capital Change") and the adoption
of the 2004 Performance Equity Plan which provides for the award of up to
10,000,000 shares of common stock on a post-stock split basis ("2004 Plan").
On January 19, 2004, the Board approved the Capital Change and 2004
Plan and authorized the Company's officers to obtain written consents from the
holders of a majority of the outstanding voting securities of the Company to
approve the Capital Change and 2004 Plan. Under Section 78.320 of the NGCL, any
action required or permitted by the NGCL to be taken at an annual or special
meeting of stockholders of a Nevada corporation may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, is signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the approval of the Capital Change and 2004
Plan must be given to those stockholders who have not consented in writing to
the action and who, if the action had been taken at a meeting, would otherwise
have been entitled to notice of the meeting.
On January 19, 2004, stockholders who are the owners of record of
2,100,000 shares of the Company's common stock, representing approximately 53%
of the outstanding voting securities of the Company, executed and delivered to
the Company written consents authorizing and approving the Capital Change and
2004 Plan. Accordingly, no vote or further action of the stockholders of the
Company is required to approve the Capital Change and 2004 Plan. You are hereby
being provided with notice of the approval of the Capital Change and 2004 Plan
by less than unanimous written consent of the stockholders of the Company.
The executive offices of the Company are located at 498 Ellis Street,
2nd Floor, Penticton, British, Canada V2A 4M2, and its telephone number is (250)
497-6072.
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This information statement is first being mailed to stockholders on or
about January 30, 2004 and is being furnished for informational purposes only.
The share amounts set forth in this Information Statement are not
adjusted for the one-for-200 reverse stock split.
VOTING SECURITIES
The Company only has common stock issued and outstanding. As of the
Record Date, there were 3,930,250 shares of common stock issued and outstanding.
Each share of common stock is entitled to one vote on all matters submitted to
the holders of common stock for their approval. The consent of the holders of a
majority of all of the Company's outstanding common stock was necessary to
authorize the Capital Change and the 2004 Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and accompanying footnotes set forth certain
information as of the Record Date with respect to the stock ownership prior to
the reverse stock split of (i) those persons known to the Company to
beneficially own more than 5% of the Company's common stock, (ii) each director
of the Company, (iii) each executive officer of the Company and (iv) all
directors and executive officers of the Company as a group.
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership* Outstanding Shares
------------------------------------ --------------------- ------------------
Ted Kozub** 2,100,000 53.0%
All executive officers and
Directors as a group (one person) 2,100,000 53.0%
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* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently exercisable
or convertible within 60 days, are deemed outstanding for computing the
percentage ownership of the person holding such options or warrants but
are not deemed outstanding for computing the percentage ownership of
any other person.
** Ted Kozub is the Company's sole director, president, treasurer and
secretary.
As of the Record Date, there were no outstanding options or warrants to
purchase shares of common stock.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the directors and
executive officers of the Company and their ages and positions. Each director
holds office until the next annual stockholders' meeting and thereafter until
the individual's successor is elected and qualified. Officers serve at the
pleasure of the board of directors.
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Name Age Position
--------- --- -------------------------
Ted Kozub 65 Sole Director, President,
Treasurer and Secretary
Ted Kozub is the president, treasurer, secretary and sole director of
the company. Mr. Kozub was a tax partner with KPMG, in Canada for more than five
years ending in 2003 upon his retirement. Mr. Kozub also held senior positions
with Revenue Canada Taxation, and Mr. Kozub was appointed to the special task
force for reform of Canadian tax law. Mr. Kozub was the president of Canadian
Petroleum Tax Society, Tax Manager with Hudson's Bay Oil and Gas, located in
Calgary, Alberta, and a subsidiary of Conoco
Board of Directors' Meetings and Committees
During the fiscal years ending December 31, 2002 and 2003, our board of
directors acted by unanimous consent on several occasions. Our entire board
participated in each action. We do not have standing nominating, audit or
compensation committees.
Director Compensation
Persons who are directors and employees will not be additionally
compensated for their services as a director. There is no plan in place for
compensation of persons who are directors who are not employees, but it is
expected that in the future we will create a remuneration and reimbursement
plan.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more then 10% of
the common sock of the Company to file with the SEC reports of ownership and
reports of changes in ownership of common stock and other equity securities of
the Company. Based on its review of the reports that it has received, all
reports of their ownership of shares of common stock in the Company have been
filed, however, the report of Mr. Kozub filed January 5, 2004, which was due
December 26, 2003, was late because he was traveling out of the country and
there was a delay in obtaining an EDGAR filing number for Mr. Kozub.
Executive Compensation
We have not paid any cash compensation or other benefits to our
executive officers since our inception. Cash compensation amounts will be
determined in the future based on the services to be rendered and time devoted
to our business and the availability of funds. Other elements of compensation,
if any, will be determined at that time or at other times in the future.
Until we have sufficient capital or revenues, Mr. Kozub will not be
provided cash remuneration. At such time as we are able to provide a regular
salary, it is our intention that our officers will become employed pursuant to
executive employment agreements, at an annual salary to be determined based on
their then levels of time devoted to the Company and the scope of their
responsibilities. Until we enter into an employment agreement, we may use shares
of common stock to compensate our officers. In addition, we may use common stock
to compensate others for services to the company.
Certain Relationships and Related Transactions
In the past two fiscal years, there have not been any transactions that
have to be reported.
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CAPITAL CHANGE
On January 19, 2004, the Board authorized a reverse split of the common
stock at the rate of one share for every 200 shares then outstanding and
thereafter an amendment to Article FOURTH of the Company's Articles of
Incorporation to re-establish the authorized capital at 50,000,000 shares of
common stock, $.001 par value per share. A form of certificate of amendment to
the articles of incorporation of the Company is attached to this Information
Statement as Exhibit A.
In the judgment of the Board, the change of the Company's
capitalization is desirable to consolidate the outstanding float to enhance its
desirability as an investment and to make available sufficient shares of common
stock to be able to raise additional funds in the future, provide for stock
awards outside the 2004 Plan, if at all, and to conduct other capital
transactions. The Company does not have any plans to issue any of these newly
authorized shares of common stock at this time. At the current time, all its
commitments to issue shares of common stock are covered by the number of shares
of common stock authorized by the articles of incorporation as it was before the
Capital Change. The common stock does not have any pre-emptive rights. None of
the rights of the common stock are being changed as a result of the Capital
Change and therefore the rights of the stockholders will remain unchanged.
Stockholders will not be required to exchange outstanding stock certificates for
new certificates in connection with the Capital Change. If any fractional shares
result from the reverse split, on the basis of the aggregate number of shares
held by a stockholder, the fractional share will be rounded up to the next whole
share.
On January 19, 2004, a stockholder holding an aggregate of 2,100,000
shares of common stock, representing approximately 53% of the outstanding voting
securities of the Company, executed and delivered to the Company a written
consent authorizing and approving the Capital Change.
2004 PERFORMANCE EQUITY PLAN
The 2004 Plan provides for 10,000,000 shares of common stock (on a
post-reverse stock split basis) which may be granted to employees, officers,
directors, consultants and agents of the Company. The 2004 Plan is administered
by the board of directors, but the board may appoint a committee to administer
the 2004 Plan. The benefits which may be granted under the 2004 Plan include
stock options, stock appreciation rights, restricted stock awards, deferred
stock awards, and recharge options. The specific terms of each award will be set
forth in an agreement subject to the 2004 Plan as determined by the
administrators. The terms of each award will include the number of shares,
vesting periods, exercise prices, and exercise periods, among other things. A
full copy of the 2004 Plan is attached to this information statement as Exhibit
B.
The board of directors of the Company believes the 2004 Plan will
provide flexibility in structuring compensation arrangements and provide an
equity incentive for employees and others who are awarded shares under the 2004
Plan. The issuance of common stock under an award may have a financial dilutive
effect depending on the price paid for such shares and an absolute dilutive
effect because of the increase in issued and outstanding shares.
The Company currently has no commitment to issue any awards under the
2004 Plan.
On January 19, 2004, a stockholder who is the owner of record of
2,100,000 shares of the Company's common stock, representing approximately 53%
of the outstanding voting securities of the Company, executed and delivered a
written consent approving the 2004 Plan.
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CHANGE OF BY-LAWS
On January 19, 2004, the board of directors approved a new set of
by-laws after review of the bylaws then in existence. The new by-laws were
approved by the holder of a majority of the common stock by written consent. The
board determined that there were many inadequacies in the previous set of
bylaws, and it was best to address the many issues that face the management of a
corporation with a complete overhaul. Stockholders are referred to the by-laws
attached to this Information Statement as Exhibit C. One of the changes provided
for in the new by-laws of the company is that the board of directors may be as
few as one and as many as nine persons. The actual number may be set by board
resolution. Currently, there is only one member of the board of directors. It is
possible that additional persons may be appointed to the board of directors, but
at this time, there are no plans to increase the number of directors and fill
the vacancies created thereby. In the event that the board is to be expanded,
the NGCL provides that the current director may create a vacancy and fill it by
an action of the board of which he is the sole member.
AVAILABLE INFORMATION
Please read all the sections of the Information Statement carefully.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act") and in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission ("SEC"). These reports, proxy statements and other
information filed by the Company with the SEC may be inspected without charge at
the public reference section of the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549. Copies of this material also may be obtained from
the SEC at prescribed rates. The SEC also maintains a website that contains
reports, proxy and information statements and other information regarding public
companies that file reports with the SEC. Copies of these materials may be
obtained from the SEC's website at http://www.sec.gov.
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INCORPORATION OF INFORMATION BY REFERENCE
The following documents, which are on file with the Commission
(Exchange Act File No. 000-32517) are incorporated in this Information Statement
by reference and made a part hereof:
(i) Annual Report on Form 10-KSB, as amended, for the fiscal
year ended December 31, 2002.
(ii) Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 2003, June 30, 2003 and September 30, 2003.
(iii) Current Report on Form 8-K filed January 5, 2004,
reporting a change of control.
(iv) Schedule 14(f) filed January 5, 2004.
The Company's Registration Statement on Form 10-SB/A, file date August
8, 2000 (File No. 000-26907), which contains descriptions of the Company's
Common Stock commencing on page 30, is also incorporated in this Information
Statement by reference and made a part hereof. The financial statements of the
Company, and management's discussion and analysis sections of the Form 10-KSB
noted above are incorporated by reference and may be found at pages F-1 to F-10
and Item 6, respectively.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Information Statement and prior to the Effective Date shall be deemed to be
incorporated by reference in this Information Statement and shall be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference in this Information Statement and filed with
the Commission prior to the date of this Information Statement shall be deemed
to be modified or superseded for purposes of this Information Statement to the
extent that a statement contained herein, or in any other subsequently filed
document which is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Information Statement.
The Company will provide without charge to each person to whom this
Information Statement is delivered, upon written or oral request of such person,
a copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Written or telephone requests
should be directed to the Company at 498 Ellis Street, 2nd Floor, Penticton,
British Columbia, Canada V2A 4M2, Attention: Investor Relations (telephone
number: (250-) 497-6072).
BIO-AMERICAN CAPITAL CORPORATION
Penticton, British Columbia, Canada
January 30, 2004
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Exhibit A
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
BIO-AMERICAN CAPITAL CORPORATION
------------------------------
Pursuant to Section 78.390 of the
General Corporation Law of Nevada
-----------------------------
The undersigned President of Bio-American Capital Corporation
("Corporation") DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is Bio-American Capital Corporation.
SECOND: The stockholders of the Corporation approved a reverse stock
split of the outstanding common stock at the rate of one share for every 200
shares of common stock, and then approved an amendment to the Articles of
Incorporation of the Corporation to establish the capitalization after a reverse
split of the common stock, by deleting the first paragraph of Article FOURTH in
its entirety and by substituting the following in lieu thereof:
ARTICLE FOURTH
The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 50,000,000 shares, all the shares
of which shall be Common Stock, par value $.001 per share.
1. The holders of Common Stock shall receive, to the extent
permitted by law and to the extent the Board of Directors shall
determine, such dividends as may be declared from time to time
by the Board of Directors.
2. Upon dissolution, the holders of the Common Stock shall be
entitled to receive such of the remaining assets of the
Corporation of whatever kind available for distribution to the
holders of the Common Stock, to the extent the Board of
Directors shall determine.
3. Except as may be otherwise required by law or by this Articles
of Incorporation, each holder of Common Stock shall have one
vote in respect of each share of such stock held by him on all
matters voted upon by the stockholders. There are no cumulative
voting rights for the Common Stock on any matter.
4. No holder of any capital shares of the Corporation of any class,
now or hereafter authorized, shall have any preferential or
preemptive right to subscribe for, purchase, or receive any
shares of stock of the Corporation of any class, now or
hereafter authorized, or any options or warrants for such
shares, or any rights to subscribe to or purchase such shares,
or any securities convertible into or exchangeable for such
shares, which may at any time or from time to time be issued,
sold, or offered for sale by the Corporation.
THIRD: The foregoing Amendment of the Articles of Incorporation was
duly approved by the Corporation's Board of Directors and thereafter was duly
adopted by the consent of the holder of a majority of the outstanding voting
stock of the Corporation.
IN WITNESS WHEREOF, I have executed this Certificate of Amendment this
___th day of February ___, 2004.
-----------------------------------
Ted Kozub,
President
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Exhibit B
Adopted: January 19, 2004
BY-LAWS
OF
BIO-AMERICAN CAPITAL CORPORATION
ARTICLE I
OFFICES
1.1 Offices: The corporation may have other offices, either within
or without the State of Nevada, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings. All meetings of the
stockholders of the corporation shall be held at such place or places, within or
outside the State of Nevada as may be fixed by the Board of Directors from time
to time or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders. An annual
meeting of stockholders shall be held each year at such place, either within or
without the State of Nevada, and at such time and date as the Board of
Directors, by resolution, shall determine and as set forth in the notice of the
meeting. In the event the Board of Directors fails to so determine the time,
date and place of meeting, the annual meeting of stockholders shall be held at
the main headquarters of the corporation on a day in the month of May as shall
be determined by the Board of Directors. If the date of the annual meeting shall
fall upon a legal holiday, the meeting shall be held on the next succeeding
business day.
2.3 Purposes of Annual Meetings. At each annual meeting, the
stockholders shall elect the members of the Board of Directors for the
succeeding year. At any such annual meeting any further proper business may be
transacted.
2.4 Special Meetings of Stockholders. Special meetings of the
stockholders or of any class or series thereof entitled to vote may be called by
the President or by the Board of Directors, or at the request in writing by
stockholders of record owning a majority of the issued and outstanding shares of
Common Stock of the corporation, which request shall state the purpose of the
proposed meeting, and may be held at such time and place, within or without the
State of Nevada, as shall be stated in the notice of meeting.
2.5 Notice of Meetings of Stockholders. Except as otherwise
expressly required or permitted by law, not less than ten days nor more than
sixty days before the date of every stockholders' meeting the Secretary shall
give to each stockholder of record entitled to vote at such meeting, written
notice, served personally, by mail or by telegram, stating the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Such notice, if mailed, shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address for notices to such stockholder as it
appears on the records of the corporation.
2.6 Quorum of Stockholders.
(a) Unless otherwise provided by the Articles of Incorporation
or by law, at any meeting of the stockholders, the presence in person or by
proxy of stockholders entitled to cast a majority of the votes thereat shall
constitute a quorum.
(b) At any meeting of the stockholders at which a quorum shall
be present, a majority of those present in person or by proxy may adjourn the
meeting from time to time without notice other than announcement at the meeting.
In the absence of a quorum, the officer presiding thereat shall have power to
adjourn the meeting from time to time until a quorum shall be present. Notice of
any adjourned meeting, other than announcement at the meeting, shall not be
required to be given, except as provided in paragraph (d) below and except where
expressly required by law.
(c) At any adjourned session at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting originally called but only those stockholders entitled to vote at the
meeting as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof, unless a new record date is fixed by the Board of
Directors.
(d) If an adjournment is for more than sixty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
2.7 Chairman and Secretary of Meeting. The President, or, in his
absence, a Vice President, shall preside at meetings of the stockholders. The
Secretary or, in his absence, an Assistant Secretary, shall act as secretary of
the meeting, or if neither is present, then the presiding officer may appoint a
person to act as secretary of the meeting.
2.8 Voting by Stockholders. Except as may be otherwise provided by
the Articles of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
stock standing in his name on the books of the corporation on the record date
for the meeting. All elections and questions shall be decided by the vote of a
majority in interest of the stockholders present in person or represented by
proxy and entitled to vote at the meeting.
2.9 Proxies. Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors. The election of directors and any other vote by
ballot at any meeting of the stockholders shall be supervised by at least one
inspector. Such inspectors shall be appointed by the Board of Directors in
advance of the meeting. If the inspector so appointed shall refuse to serve or
shall not be present, such appointment shall be made by the officer presiding at
the meeting.
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2.11 List of Stockholders.
(a) For every meeting of stockholders' the Secretary shall
prepare and make a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
The list shall also be produced and kept at the time and place of the meeting
during the whole time of the meeting, and it may be inspected by any stockholder
who is present.
(b) The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings. Except as otherwise
provided by these by-laws or any resolutions adopted by the stockholders or
Board of Directors, the order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the presiding officer. Not
less than 15 minutes following the presentation of any resolution to any meeting
of stockholders, the presiding officer may announce that further discussion on
such resolution shall be limited to not more than three persons who favor and
not more than three persons who oppose such resolution, each of whom shall be
designated by the presiding officer and shall thereupon be entitled to speak
thereon for not more than five minutes. After such persons, or such a lesser
number thereof as shall advise the presiding officer of their desire so to
speak, shall have spoken on such resolution, the presiding officer may direct a
vote on such resolution without further discussion thereon at the meeting.
2.13 Action By Consent Without Meeting. Unless otherwise provided by
the Articles of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
DIRECTORS
3.1 Powers of Directors. The property, business and affairs of the
corporation shall be managed by its Board of Directors which may exercise all
the powers of the corporation except such as are by the law of the State of
Nevada or the Articles of Incorporation or these by-laws required to be
exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors. The
number of directors shall be fixed from time to time by the Board of Directors
but shall not be less than one or more than nine, such number to be fixed by
resolution of the Board of Directors. Each Director shall hold office until the
next annual meeting of stockholders and until his successor is elected and
qualified, provided, however, that a director may resign at any time. Directors
need not be stockholders.
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3.3 Vacancies on Board of Directors; Removal.
(a) Any director may resign his office at any time by
delivering his resignation in writing to the President or the Secretary. It will
take effect at the time specified therein or, if no time is specified, it will
be effective at the time of its receipt by the corporation. The acceptance of a
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
(b) Any vacancy, or newly created directorship resulting from
any increase in the authorized number of directors, may be filled by a majority
of the directors then in office, though less than a quorum, or by a sole
remaining director, and any director so chosen shall hold office until the next
annual election of directors by the stockholders and until his successor is duly
elected and qualified or until his earlier resignation or removal.
(c) Removal. Any director may be removed with or without cause
at any time by the affirmative vote of stockholders holding of record in the
aggregate at least two-thirds of the outstanding shares of stock of the
corporation, given at a special meeting of the stockholders called for that
purpose.
3.4 Meetings of the Board of Directors.
(a) The Board of Directors may hold their meetings, both
regular and special, either within or outside the State of Nevada.
(b) Regular meetings of the Board of Directors may be held at
such time and place as shall from time to time be determined by resolution of
the Board of Directors. No notice of such regular meetings shall be required. If
the date designated for any regular meeting be a legal holiday, then the meeting
shall be held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of the stockholders for
the election of officers and the transaction of such other business as may come
before it. If such meeting is held at the place of the stockholders' meeting, no
notice thereof shall be required.
(d) Special meetings of the Board of Directors shall be held
whenever called by direction of the President or at the written request of any
one director.
(e) The Secretary shall give notice to each director of any
special meeting of the Board of Directors by mailing the same at least two days
before the meeting or by telegraphing, telexing, or delivering the same not
later than the day before the meeting. Unless required by law, such notice need
not include a statement of the business to be transacted at, or the purpose of,
any such meeting. Any and all business may be transacted at any meeting of the
Board of Directors. No notice of any adjourned meeting need be given. No notice
to or waiver by any director shall be required with respect to any meeting at
which the director is present.
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3.5 Quorum and Action. Unless provided otherwise by law or the
Articles of Incorporation, a majority of the whole board shall constitute a
quorum for the transaction of business; but if there shall be less than a quorum
at any meeting of the Board, a majority of those present may adjourn the meeting
from time to time. The vote of a majority of the directors present at any
meeting at which a quorum is present shall be necessary to constitute the act of
the Board of Directors.
3.6 Presiding Officer and Secretary of Meeting. The President, or,
in his absence, any Vice President, or, in their absence a member of the Board
of Directors selected by the members present, shall preside at meetings of the
Board. The Secretary shall act as secretary of the meeting, but in his absence
the presiding officer may appoint a secretary of the meeting.
3.7 Action by Consent Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the Board or committee.
3.8 Action by Telephonic Conference. Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.
3.9 Committees.
(a) The Board of Directors may, by resolution or resolutions
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any such meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(b) Any such committee, to the extent provided in the
resolution or resolution of the Board of Directors, or in these by-laws, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it;
but no such committee shall have the power of authority in reference to amending
the Articles of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
or amending the by-laws of the corporation; and unless the resolution, these
by-laws, or the Articles of Incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
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3.10 Compensation of Directors. Directors shall receive such
reasonable compensation for their service on the Board of Directors or any
committees thereof, whether in the form of salary or a fixed fee for attendance
at meetings, or both, with expenses, if any, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving the corporation in any other capacity and receiving
compensation therefor.
3.11 Contracts.
(a) No contract or other transaction between this corporation
and any other corporation shall be impaired, affected or invalidated, nor shall
any director be liable in any way by reason of the fact that any one or more of
the directors of this corporation is or are interested in, or is a director or
officer, or are directors or officers of such other corporation, provided that
such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party
to or may be interested in any contract or transaction of this corporation, and
no director shall be liable in any way by reason of such interest, provided that
the fact of such interest be disclosed or made known to the Board of Directors,
and provided that the Board of Directors shall authorize, approve or ratify such
contract or transaction by the vote (not counting the vote of any such director)
of a majority of a quorum, notwithstanding the presence of any such director at
the meeting at which such action is taken. Such director or directors may be
counted in determining the presence of a quorum at such meeting. This Section
shall not be construed to impair or invalidate or in any way affect any contract
or other transaction which would otherwise be valid under the law (common,
statutory or otherwise) applicable thereto.
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ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms.
(a) The elected officers of the corporation shall be a
President, one or more Vice Presidents, a Treasurer and a Secretary, who shall
be elected by the Board of Directors at its annual meeting following the annual
meeting of the stockholders, to serve at the pleasure of the Board or otherwise
as shall be specified by the Board at the time of such election and until their
successors are elected and qualify. The Board of Directors may also elect a
Chairman of the Board.
(b) The Board of Directors may elect or appoint at any time,
and from time to time, additional officers or agents with such duties as it may
deem necessary or desirable. Such additional officers shall serve at the
pleasure of the Board or otherwise as shall be specified by the Board at the
time of such election or appointment. Two or more offices may be held by the
same person.
(c) Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein or, if no time be specified, at the time of its receipt by the
corporation. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
4.2 Removal of Elected Officers. Any elected officer may be removed
at any time, either with or without cause, by resolution adopted at any regular
or special meeting of the Board of Directors by a majority of the directors then
in office.
4.3 Duties.
(a) President. The President shall be the principal executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall supervise and control all the business and affairs of the
Corporation. He shall, when present, preside at all meetings of the stockholders
and of the Board of Directors. He shall see that all orders and resolutions of
the Board of Directors are carried into effect (unless any such order or
resolution shall provide otherwise), and in general shall perform all duties
incident to the office of president and such other duties as may be prescribed
by the Board of Directors from time to time.
(b) Vice President. Each Vice President, if any, shall have
such powers and perform such duties as the Board of Directors may determine or
as may be assigned to him by the President. In the absence of the President or
in the event of his death, or inability or refusal to act, the Vice President
(or in the event there be more than one Vice President, the Vice Presidents in
the order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President and when so acting, shall have all the powers and be subject to
all the restrictions upon the President.
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(c) Treasurer. The Treasurer shall (1) have charge and custody
of and be responsible for all funds and securities of the Corporation; (2)
receive and give receipts for moneys due and payable to the Corporation from any
source whatsoever; (3) deposit all such moneys in the name of the Corporation in
such banks, trust companies, or other depositaries as shall be selected by
resolution of the Board of Directors; and (4) in general perform all duties
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors. He shall,
if required by the Board of Directors, give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
(d) Secretary. The Secretary shall (1) keep the minutes of the
meetings of the stockholders, the Board of Directors, the Executive Committee
(if designated), and all other committees, if any, of which a secretary shall
not have been appointed, in one or more books provided for that purpose; (2) see
that all notices are duly given in accordance with the provisions of these
by-laws and as required by law; (3) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation is affixed
to all documents, the execution of which on behalf of the Corporation under its
seal, is duly authorized; (4) keep a register of the post office address of each
stockholder which shall be furnished to the Secretary by such stockholder; (5)
have general charge of stock transfer books of the Corporation; and (6) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors.
(e) Assistant Secretaries and Assistant Treasurers. At the
request of the Secretary or in his absence or disability, one or more Assistant
Secretaries designated by him or by the Board of Directors shall have all the
powers of the Secretary for such period as he or it may designate or until he or
it revokes such designation. At the request of the Treasurer or in his absence
or disability, one or more Assistant Treasurers designated by him or by the
Board of Directors shall have all the powers of the Treasurer for such period as
he or it may designate or until he or it revokes such designation. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates.
(a) Every holder of stock in the corporation shall be entitled
to have a certificate signed by, or in the name of, the corporation by the
Chairman or the President or a Vice President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the
number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent
other than the corporation or its employee, or by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles, and, if permitted by law, any other signature may be a
facsimile.
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(c) In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not
inconsistent with the Articles of Incorporation as shall be approved by the
Board of Directors. They shall be numbered and registered in the order in which
they are issued.
(e) All certificates surrendered to the corporation shall be
canceled with the date of cancellation, and shall be retained by the Secretary,
together with the powers of attorney to transfer and the assignments of the
shares represented by such certificates, for such period of time as shall be
prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership. A record of the name and address of the holder
of each certificate, the number of shares represented thereby and the date of
issue thereof shall be made on the corporation's books. The corporation shall be
entitled to treat the holder of any share of stock as the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership. Transfers of stock shall be made
on the books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and transferee request the corporation to do so.
5.4 Lost, Stolen or Destroyed Certificates. Certificates
representing shares of the stock of the corporation shall be issued in place of
any certificate alleged to have been lost, stolen or destroyed in such manner
and on such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates. The
corporation may maintain one or more transfer offices or agencies where stock of
the corporation shall be transferable. The corporation may also maintain one or
more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
5.6 Fixing Record Date for Determination of Stockholders of Record.
The Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in any
case shall be not more than sixty days nor less than ten days before the date of
a meeting of the stockholders, nor more than sixty days prior to any other
action requiring such determination of the stockholders. A determination of
stockholders of record entitled to notice or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
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5.7 Dividends. Subject to the provisions of the Articles of
Incorporation and the Nevada General Corporation Law, the Board of Directors
may, out of funds legally available therefor at any regular or special meeting,
declare dividends upon the capital stock of the corporation as and when they
deem expedient. Before declaring any dividend there may be set apart out of any
funds of the corporation available for dividends, such sum or sums as the Board
of Directors from time to time in their discretion deem proper for working
capital or as a reserve fund to meet contingencies or for equalizing dividends
or for such other purposes as the Board of Directors shall deem conducive to the
interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting. Unless the Board of Directors shall otherwise order, the
President, any Vice President, the Secretary or the Treasurer shall have full
power and authority, on behalf of the corporation, to attend, act and vote at
any meeting of the stockholders of any corporation in which the corporation may
hold stock, and at such meeting to exercise any or all rights and powers
incident to the ownership of such stock, and to execute on behalf of the
corporation a proxy or proxies empowering another or others to act as aforesaid.
The Board of Directors from time to time may confer like powers upon any other
person or persons.
6.2 General Authorization to Transfer Securities Held by the
Corporation.
(a) Any of the following officers, to wit: the President, any
Vice President and the Treasurer shall be, and they hereby are, authorized and
empowered to transfer, convert, endorse, sell, assign, set over and deliver any
and all shares of stock, bonds, debentures, notes, subscription warrants, stock
purchase warrants, evidence of indebtedness, or other securities now or
hereafter standing in the name of or owned by the corporation, and to make,
execute and deliver, under the seal of the corporation, any and all written
instruments of assignment and transfer necessary or proper to effectuate the
authority hereby conferred.
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(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed pursuant to and in accordance with the
foregoing paragraph (a), a certificate of the Secretary of the corporation in
office at the date of such certificate setting forth the provisions of this
Section 6.2 and stating that they are in full force and effect and setting forth
the names of persons who are then officers of the corporation, then all persons
to whom such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were theretofore
duly and properly transferred, endorsed, sold, assigned, set over and delivered
by the corporation, and that with respect to such securities the authority of
these provisions of the by-laws and of such officers is still in full force and
effect.
ARTICLE VII
MISCELLANEOUS
7.1 Signatories. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal. The seal of the corporation shall be in such form and
shall have such content as the Board of Directors shall from time to time
determine.
7.3 Notice and Waiver of Notice. Whenever any notice of the time,
place or purpose of any meeting of the stockholders, directors or a committee is
required to be given under the law of the State of Nevada, the Articles of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance at the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
7.4 Amendment of By-Laws.
(a) By Board of Directors. The by-laws of the corporation may
be altered, amended or repealed or new by-laws may be made or adopted by the
Board of Directors at any regular or special meeting of the Board; provided that
paragraph (c) of Section 3.3 and Section 7.4(b) of these By-Laws may be altered,
amended or repealed only by action of the stockholders acting pursuant to
Section 7.4(b) hereof.
(b) By Stockholders. The by-laws of the corporation may also
be altered, amended or repealed or new by-laws may be made or adopted by the
vote of a majority in interest of the stockholders represented and entitled to
vote upon the election of directors, at any meeting at which a quorum is
present.
7.5 Indemnity. The corporation shall indemnify its directors,
officers, employees or agents to the fullest extent allowed by law.
7.6 Fiscal Year. Except as from time to time otherwise determined by
the Board of Directors, the fiscal year of the corporation shall end on December
31.
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Exhibit C
Approved by Board of Directors on January 19, 2004
Approved by Stockholders on January 19, 2004
Share Numbers are Adjusted for Reverse Stock Split to be Effective
BIO-AMERICAN CAPTIAL CORPORATION
2004 Performance Equity Plan
Section 1. Purpose; Definitions.
1.1. Purpose. The purpose of the 2004 Performance Equity Plan
("Plan") is to enable the Company to offer to its employees, officers, directors
and consultants whose past, present and/or potential contributions to the
Company and its Subsidiaries have been, are or will be important to the success
of the Company, an opportunity to acquire a proprietary interest in the Company.
The various types of long-term incentive awards that may be provided under the
Plan will enable the Company to respond to changes in compensation practices,
tax laws, accounting regulations and the size and diversity of its businesses.
1.2. Definitions. For purposes of the Plan, the following terms shall
be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder, or such other document as may be determined by the Committee,
setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(d) "Committee" means the Stock Option Committee of the Board
or any other committee of the Board that the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, no
par value.
(f) "Company" means Bio-American Capital Corporation, a
corporation organized under the laws of the State of Nevada.
(g) "Deferred Stock" means Common Stock to be received under
an award made pursuant to Section 8, below, at the end of a specified deferral
period.
(h) "Disability" means physical or mental impairment as
determined under procedures established by the Committee for purposes of the
Plan.
(i) "Effective Date" means the date set forth in Section 12.1,
below.
(j) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on such date, as reported by the exchange or Nasdaq, as the case
may be; (ii) if the Common Stock is not listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but is traded
in the over-the-counter market, the closing bid price for the Common Stock on
such date, as reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under
the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after such age which may be
designated by the Committee as "retirement age" for any particular Holder. If no
age is designated, it shall be 65.
(o) "Other Stock-Based Award" means an award under Section 9,
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Common Stock.
(p) "Parent" means any present or future "parent corporation"
of the Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the Bio-American Capital Corporation 2004
Performance Equity Plan, as hereinafter amended from time to time.
(r) "Repurchase Value" shall mean the Fair Market Value in the
event the award to be settled under Section 2.2(h) or repurchased under Section
10.2 is comprised of shares of Common Stock and the difference between Fair
Market Value and the Exercise Price (if lower than Fair Market Value) in the
event the award is a Stock Option or Stock Appreciation Right; in each case,
multiplied by the number of shares subject to the award.
(s) "Restricted Stock" means Common Stock received under an
award made pursuant to Section 7, below, that is subject to restrictions under
said Section 7.
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(t) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option, multiplied by the
number of shares for which the Stock Appreciation Right is exercised.
(u) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the Fair Market Value (on the exercise date).
(v) "Stock Option" or "Option" means any option to purchase
shares of Common Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 5.3 of the Plan.
(x) "Subsidiary" means any present or future "subsidiary
corporation" of the Company, as such term is defined in Section 424(f) of the
Code.
(y) "Vest" means to become exercisable or to otherwise obtain
ownership rights in an award.
Section 2. Administration.
2.1. Committee Membership. The Plan shall be administered by the
Board or a Committee. Committee members shall serve for such term as the Board
may in each case determine, and shall be subject to removal at any time by the
Board. The Committee members, to the extent possible and deemed to be
appropriate by the Board, shall be "non-employee directors" as defined in Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and "outside directors" within the meaning of Section 162(m)
of the Code.
2.2. Powers of Committee. The Committee shall have full authority to
award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):
(a) to select the officers, employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock Options
and/or Other Stock-Based Awards may from time to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share exercise price or types of consideration
paid upon exercise of such options, such as other securities of the Company or
other property, any restrictions or limitations, and any vesting, exchange,
surrender, cancellation, acceleration, termination, exercise or forfeiture
provisions, as the Committee shall determine);
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(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash and non-cash awards
made by the Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the payment or crediting of interest on deferred amounts denominated in cash and
of dividend equivalents on deferred amounts denominated in Common Stock;
(f) to determine the extent and circumstances under which
Common Stock and other amounts payable with respect to an award hereunder shall
be deferred that may be either automatic or at the election of the Holder;
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms; and
(h) to make payments and distributions with respect to awards
(i.e., to "settle" awards) through cash payments in an amount equal to the
Repurchase Value.
Notwithstanding anything to the contrary, the Committee shall
not grant to any one Holder in any one calendar year awards for more than
2,000,000 shares in the aggregate.
2.3. Interpretation of Plan.
(a) Committee Authority. Subject to Section 11, below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 11, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but not limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
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Section 3. Stock Subject to Plan.
3.1. Number of Shares. The total number of shares of Common Stock
reserved and available for issuance under the Plan shall be 10,000,000 shares.
Shares of Common Stock under the Plan ("Shares") may consist, in whole or in
part, of authorized and unissued shares or treasury shares. If any shares of
Common Stock that have been granted pursuant to a Stock Option cease to be
subject to a Stock Option, or if any shares of Common Stock that are subject to
any Stock Appreciation Right, Restricted Stock award, Deferred Stock award,
Reload Stock Option or Other Stock-Based Award granted hereunder are forfeited
or any such award otherwise terminates without a payment being made to the
Holder in the form of Common Stock, such shares shall again be available for
distribution in connection with future grants and awards under the Plan. If a
Holder pays the exercise price of a Stock Option by surrendering any previously
owned shares and/or arranges to have the appropriate number of shares otherwise
issuable upon exercise withheld to cover the withholding tax liability
associated with the Stock Option exercise, then the number of shares available
under the Plan shall be increased by the lesser of (i) the number of such
surrendered shares and shares used to pay taxes; and (ii) the number of shares
purchased under such Stock Option.
3.2. Adjustment Upon Changes in Capitalization, Etc. In the event of
any merger, reorganization, consolidation, common stock dividend payable on
shares of Common Stock, Common Stock split or reverse split, combination or
exchange of shares of Common Stock, or other extraordinary or unusual event
which results in a change in the shares of Common Stock of the Company as a
whole, the Committee shall determine, in its sole discretion, whether such
change equitably requires an adjustment in the terms of any award (including
number of shares subject to the award and the exercise price) or the aggregate
number of shares reserved for issuance under the Plan. Any such adjustments will
be made by the Committee, whose determination will be final, binding and
conclusive.
Section 4. Eligibility.
Awards may be made or granted to employees, officers, directors and
consultants who are deemed to have rendered or to be able to render significant
services to the Company or its Subsidiaries and who are deemed to have
contributed or to have the potential to contribute to the success of the
Company. No Incentive Stock Option shall be granted to any person who is not an
employee of the Company or a Subsidiary at the time of grant. Notwithstanding
the foregoing, an award may be made or granted to a person in connection with
his hiring or retention, or at any time on or after the date he reaches an
agreement (oral or written) with the Company with respect to such hiring or
retention, even though it may be prior to the date the person first performs
services for the Company or its Subsidiaries; provided, however, that no portion
of any such award shall vest prior to the date the person first performs such
services.
5
Section 5. Stock Options.
5.1. Grant and Exercise. Stock Options granted under the Plan may be
of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options.
Any Stock Option granted under the Plan shall contain such terms, not
inconsistent with this Plan, or with respect to Incentive Stock Options, not
inconsistent with the Plan and the Code, as the Committee may from time to time
approve. The Committee shall have the authority to grant Incentive Stock Options
or Non-Qualified Stock Options, or both types of Stock Options which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
5.2. Terms and Conditions. Stock Options granted under the Plan shall
be subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall be fixed
by the Committee; provided, however, that an Incentive Stock Option may be
granted only within the ten-year period commencing from the Effective Date and
may only be exercised within ten years of the date of grant (or five years in
the case of an Incentive Stock Option granted to an optionee who, at the time of
grant, owns Common Stock possessing more than 10% of the total combined voting
power of all classes of voting stock of the Company ("10% Stockholder").
(b) Exercise Price. The exercise price per share of Common
Stock purchasable under a Stock Option shall be determined by the Committee at
the time of grant, provided, however, that in no event may the exercise price
per share be less than $.02 under any Stock Option.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 10, below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option by giving written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, which shall be in cash or,
if provided in the Agreement, either in shares of Common Stock (including
Restricted Stock and other contingent awards under this Plan) or partly in cash
and partly in such Common Stock, or such other means which the Committee
determines are consistent with the Plan's purpose and applicable law. Cash
payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that
the Company shall not be required to deliver certificates for shares of Common
Stock with respect to which an Option is exercised until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof (except that, in the case of an exercise arrangement approved by
the Committee and described in the last sentence of this paragraph, payment may
be made as soon as practicable after the exercise).
6
Payments in the form of Common Stock shall be valued at the Fair Market Value on
the date prior to the date of exercise. Such payments shall be made by delivery
of stock certificates in negotiable form that are effective to transfer good and
valid title thereto to the Company, free of any liens or encumbrances. Subject
to the terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided, however,
that, notwithstanding the provisions of Section 8 of the Plan, such Deferred
Stock shall be fully vested and not subject to forfeiture. A Holder shall have
none of the rights of a Stockholder with respect to the shares subject to the
Option until such shares shall be transferred to the Holder upon the exercise of
the Option. The Committee may permit a Holder to elect to pay the Exercise Price
upon the exercise of a Stock Option by irrevocably authorizing a third party to
sell shares of Common Stock (or a sufficient portion of the shares) acquired
upon exercise of the Stock Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.
(e) Transferability. Except as may be set forth in the next
sentence of this Section or in the Agreement, no Stock Option shall be
transferable by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the Holder's
lifetime, only by the Holder (or, to the extent of legal incapacity or
incompetency, the Holder's guardian or legal representative). Notwithstanding
the foregoing, a Holder, with the approval of the Committee, may transfer a
Stock Option (i) (A) by gift, for no consideration, or (B) pursuant to a
domestic relations order, in either case, to or for the benefit of the Holder's
"Immediate Family" (as defined below), or (ii) to an entity in which the Holder
and/or members of Holder's Immediate Family own more than fifty percent of the
voting interest, in exchange for an interest in that entity, subject to such
limits as the Committee may establish and the execution of such documents as the
Committee may require, and the transferee shall remain subject to all the terms
and conditions applicable to the Stock Option prior to such transfer. The term
"Immediate Family" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, any person sharing the Holder's
household (other than a tenant or employee), a trust in which these persons have
more than fifty percent beneficial interest, and a foundation in which these
persons (or the Holder) control the management of the assets.
(f) Termination by Reason of Death. If a Holder's employment
by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee and set forth
in the Agreement, shall thereupon automatically terminate, except that the
portion of such Stock Option that has vested on the date of death may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify in the Agreement) from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is shorter.
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(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee and set forth in the Agreement, shall thereupon automatically
terminate, except that the portion of such Stock Option that has vested on the
date of termination may thereafter be exercised by the Holder for a period of
one year (or such other greater or lesser period as the Committee may specify in
the Agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is shorter.
(h) Other Termination. Subject to the provisions of Section
13.3, below, and unless otherwise determined by the Committee and set forth in
the Agreement, if such Holder's employment or retention by, or association with,
the Company or any Subsidiary terminates for any reason other than death or
Disability, the Stock Option shall thereupon automatically terminate, except
that if the Holder's employment is terminated by the Company or a Subsidiary
without cause or due to Normal Retirement, then the portion of such Stock Option
that has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.
(i) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the aggregate Fair Market Value (on the date of
grant of the Option) with respect to which Incentive Stock Options become
exercisable for the first time by a Holder during any calendar year (under all
such plans of the Company and its Parent and Subsidiaries) shall not exceed
$100,000.
(j) Buyout and Settlement Provisions. The Committee may at any
time, in its sole discretion, offer to repurchase a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
5.3. Stock Reload Option. If a Holder tenders shares of Common Stock
to pay the exercise price of a Stock Option ("Underlying Option") and/or
arranges to have a portion of the shares otherwise issuable upon exercise
withheld to pay the applicable withholding taxes, then the Holder may receive,
at the discretion of the Committee, a new Stock Reload Option to purchase that
number of shares of Common Stock equal to the number of shares tendered to pay
the exercise price and the withholding taxes (but only if such tendered shares
were held by the Holder for at least six months). Stock Reload Options may be
any type of option permitted under the Code and will be granted subject to such
terms, conditions, restrictions and limitations as may be determined by the
Committee from time to time. Such Stock Reload Option shall have an exercise
price equal to the Fair Market Value as of the date of exercise of the
Underlying Option. Unless the Committee determines otherwise, a Stock Reload
Option may be exercised commencing one year after it is granted and shall expire
on the date of expiration of the Underlying Option to which the Reload Option is
related.
Section 6. Stock Appreciation Rights.
6.1. Grant and Exercise. The Committee may grant Stock Appreciation
Rights to participants who have been or are being granted Stock Options under
the Plan as a means of allowing such participants to exercise their Stock
Options without the need to pay the exercise price in cash. In the case of a
Nonqualified Stock Option, a Stock Appreciation Right may be granted either at
or after the time of the grant of such Nonqualified Stock Option. In the case of
an Incentive Stock Option, a Stock Appreciation Right may be granted only at the
time of the grant of such Incentive Stock Option.
8
6.2. Terms and Conditions. Stock Appreciation Rights shall be subject
to the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as shall be determined by the Committee and set forth in the
Agreement, subject to the limitations, if any, imposed by the Code with respect
to related Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of shares of Common Stock equal to
the SAR Value divided by the Fair Market Value on the date the Stock
Appreciation Right is exercised.
(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Right shall not affect the number of shares of Common Stock
available under for awards under the Plan. The number of shares available for
awards under the Plan will, however, be reduced by the number of shares of
Common Stock acquirable upon exercise of the Stock Option to which such Stock
Appreciation Right relates.
Section 7. Restricted Stock.
7.1. Grant. Shares of Restricted Stock may be awarded either alone or
in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom, and the time or times at which, grants
of Restricted Stock will be awarded, the number of shares to be awarded, the
price (if any) to be paid by the Holder, the time or times within which such
awards may be subject to forfeiture ("Restriction Period"), the vesting schedule
and rights to acceleration thereof and all other terms and conditions of the
awards.
7.2. Terms and Conditions. Each Restricted Stock award shall be
subject to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions) and the enjoyment of all rights appurtenant thereto are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
9
(b) Rights of Holder. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Agreement, subject to Section 10, below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 10, below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
Section 8. Deferred Stock.
8.1. Grant. Shares of Deferred Stock may be awarded either alone or
in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
Deferred Stock will be awarded, the number of shares of Deferred Stock to be
awarded to any person, the duration of the period ("Deferral Period") during
which, and the conditions under which, receipt of the shares will be deferred,
and all the other terms and conditions of the awards.
10
8.2. Terms and Conditions. Each Deferred Stock award shall be subject
to the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 8.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
Stock shall not have any rights of a Stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Common Stock. The shares of Common Stock
issuable upon expiration of the Deferral Period shall not be deemed outstanding
by the Company until the expiration of such Deferral Period and the issuance and
delivery of such Common Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 10, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event
("Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 9. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject to limitations under
applicable law, that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, shares of Common Stock, as
deemed by the Committee to be consistent with the purposes of the Plan,
including, without limitation, purchase rights, shares of Common Stock awarded
which are not subject to any restrictions or conditions, convertible or
exchangeable debentures, or other rights convertible into shares of Common Stock
and awards valued by reference to the value of securities of or the performance
of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone
or in addition to or in tandem with any other awards under this Plan or any
other plan of the Company. Each other Stock-Based Award shall be subject to such
terms and conditions as may be determined by the Committee.
Section 10. Accelerated Vesting and Exercisability.
10.1. Non-Approved Transactions. If any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act of 1934, as amended ("Exchange
Act")), is or becomes the "beneficial owner" (as referred in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company's then
outstanding securities in one or more transactions, and the Board does not
authorize or otherwise approve such acquisition, then the vesting periods of any
and all Stock Options and other awards granted and outstanding under the Plan
shall be accelerated and all such Stock Options and awards will immediately and
entirely vest, and the respective holders thereof will have the immediate right
to purchase and/or receive any and all Common Stock subject to such Stock
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Stock Options and awards.
11
10.2. Approved Transactions. The Committee may, in the event of an
acquisition of substantially all of the Company's assets or at least 50% of the
combined voting power of the Company's then outstanding securities in one or
more transactions (including by way of merger or reorganization) which has been
approved by the Company's Board of Directors, (i) accelerate the vesting of any
and all Stock Options and other awards granted and outstanding under the Plan,
or (ii) require a Holder of any award granted under this Plan to relinquish such
award to the Company upon the tender by the Company to Holder of cash in an
amount equal to the Repurchase Value of such award or, in the event that an
outstanding award does not have any Repurchase Value, then the Board of
Directors may terminate the award on payment of $.01 per share that may be
acquired or vest under an award.
Section 11. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made that would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent, except as set forth in this Plan.
Section 12. Term of Plan.
12.1. Effective Date. The Plan shall be effective as of January 19,
2004, subject to the approval of the Plan by the Company's stockholders within
one year after the Effective Date and the effectiveness of the reverse split and
re-setting of the capital of the Company. Any awards granted under the Plan
prior to such approval shall be effective when made (unless otherwise specified
by the Committee at the time of grant), but shall be conditioned upon, and
subject to, such approval of the Plan by the Company's stockholders and no
awards shall vest or otherwise become free of restrictions prior to such
approval.
12.2. Termination Date. Unless terminated by the Board, this Plan
shall continue to remain effective until such time as no further awards may be
granted and all awards granted under the Plan are no longer outstanding.
Notwithstanding the foregoing, grants of Incentive Stock Options may be made
only during the ten-year period following the Effective Date.
Section 13. General Provisions.
13.1. Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder, or such other document as may be determined by the
Committee. The Committee may terminate any award made under the Plan if the
Agreement relating thereto is not executed and returned to the Company within 10
days after the Agreement has been delivered to the Holder for his or her
execution.
12
13.2. Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
13.3. Employees.
(a) Engaging in Competition With the Company; Solicitation of
Customers and Employees; Disclosure of Confidential Information. If a Holder's
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within 12 months after the date thereof such Holder either (i)
accepts employment with any competitor of, or otherwise engages in competition
with, the Company or any of its Subsidiaries, (ii) solicits any customers or
employees of the Company or any of its Subsidiaries to do business with or
render services to the Holder or any business with which the Holder becomes
affiliated or to which the Holder renders services or (iii) discloses to anyone
outside the Company or uses any confidential information or material of the
Company or any of its Subsidiaries in violation of the Company's policies or any
agreement between the Holder and the Company or any of its Subsidiaries, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Shares that was realized or obtained by such
Holder at any time during the period beginning on the date that is six months
prior to the date such Holder's employment with the Company is terminated. In
such event, Holder agrees to remit to the Company, in cash, an amount equal to
the difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Shares if the Shares were sold during
such six month period) and the price the Holder paid the Company for such
Shares.
(b) Termination for Cause. The Committee may, if a Holder's
employment with the Company or a Subsidiary is terminated for cause, annul any
award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Shares that was realized or obtained by such
Holder at any time during the period beginning on that date that is six months
prior to the date such Holder's employment with the Company is terminated. In
such event, Holder agrees to remit to the Company, in cash, an amount equal to
the difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Shares if the Shares were sold during
such six month period) and the price the Holder paid the Company for such
Shares.
(c) No Right of Employment. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
13.4. Investment Representations; Company Policy. The Committee may
require each person acquiring shares of Common Stock pursuant to a Stock Option
or other award under the Plan to represent to and agree with the Company in
writing that the Holder is acquiring the shares for investment without a view to
distribution thereof. Each person acquiring shares of Common Stock pursuant to a
Stock Option or other award under the Plan shall be required to abide by all
policies of the Company in effect at the time of such acquisition and thereafter
with respect to the ownership and trading of the Company's securities.
13
13.5. Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of Common Stock and cash otherwise
than under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
13.6. Withholding Taxes. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any Stock Option or other award under the Plan, the
Holder shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditioned upon such payment or arrangements and the Company
or the Holder's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Holder from the Company or any Subsidiary.
13.7. Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Nevada (without regard to choice of law provisions); provided, however,
that all matters relating to or involving corporate law shall be governed by the
laws of the State of Nevada.
13.8. Other Benefit Plans. Any award granted under the Plan shall not
be deemed compensation for purposes of computing benefits under any retirement
plan of the Company or any Subsidiary and shall not affect any benefits under
any other benefit plan now or subsequently in effect under which the
availability or amount of benefits is related to the level of compensation
(unless required by specific reference in any such other plan to awards under
this Plan).
13.9. Non-Transferability. Except as otherwise expressly provided in
the Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
13.10. Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933 (the "Securities Act"), as amended, and (ii) the rules and regulations
of any securities exchange on which the Common Stock may be listed.
14
13.11. Conflicts. If any of the terms or provisions of the Plan or an
Agreement conflict with the requirements of Section 422 of the Code, then such
terms or provisions shall be deemed inoperative to the extent they so conflict
with such requirements. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provisions of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
13.12. Non-Registered Stock. The shares of Common Stock to be
distributed under this Plan have not been, as of the Effective Date, registered
under the Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Common Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Common Stock on a national securities
exchange or any other trading or quotation system, including the Nasdaq National
Market and Nasdaq SmallCap Market.
15
Plan Amendments
Date Approved Initials of
by Attorney
Date Approved Stockholders, Sections Description of Effecting
by Board if necessary Amended Amendments Amendment
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16