EXHIBIT 10U
AUTOINFO, INC.
2006 STOCK OPTION PLAN
1. Purpose; Types of Awards; Construction.
The purpose of the AutoInfo, Inc. 2006 Stock Option Plan (the
"Plan") is to align the interests of officers, other key employees, consultants
and nonemployee directors of AutoInfo, Inc. (the "Company") and its affiliates
with those of the stockholders of the Company, to afford an incentive to such
officers, employees, consultants and directors to continue as such, to increase
their efforts on behalf of the Company and to promote the success of the
Company's business. To further such purposes, the Company may grant options to
purchase shares of the Company's common stock. The provisions of the Plan are
intended to satisfy the requirements of Section 16(b) of the Exchange Act (as
defined below) and of Section 162(m) of the Code (as defined below), and shall
be interpreted in a manner consistent with the requirements thereof, as now or
hereafter construed, interpreted and applied by regulations, rulings and cases.
2. Definitions.
As used in this Plan, the following words and phrases shall have the
meanings indicated below:
(a) "Agreement" shall mean a written agreement entered into between
the Company and an Optionee (as defined below) in connection with an award under
the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause," when used in connection with the termination of an
Optionee's employment by the Company or the cessation of an Optionee's service
as a consultant or a member of the Board, shall mean (i) the conviction of the
Optionee for the commission of a felony, or (ii) the willful and continued
failure by the Optionee to substantially perform his duties and obligations to
the Company or a Subsidiary (as defined below) (other than any such failure
resulting from his incapacity due to physical or mental illness), or (iii) the
willful engaging by the Optionee in misconduct that is demonstrably injurious to
the Company or a Subsidiary. For purposes of this Section 2(c), no act, or
failure to act, on an Optionee's part shall be considered "willful" unless done,
or omitted to be done, by the Optionee in bad faith and without reasonable
belief that his action or omission was in the best interest of the Company. The
Committee (as defined below) shall determine whether a termination of employment
is for Cause for purposes of the Plan.
(d) "Change in Control" shall mean the occurrence of the event set
forth in any of the following paragraphs:
(i) any Person (as defined below) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act (as defined below),
directly or indirectly, of securities of the Company (not including in the
securities beneficially
owned by such Person any securities acquired directly from the Company or
its subsidiaries) representing 50% or more of the combined voting power of
the Company's then outstanding securities; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(iii) there is consummated a merger or consolidation of the
Company or a direct or indirect subsidiary thereof with any other
corporation, other than (A) a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its subsidiaries)
representing 50% or more of the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's
assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such
sale.
For purposes of this Section 2(d), "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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(e) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Committee" shall mean a committee established by the Board to
administer the Plan.
(g) "Common Stock" shall mean shares of common stock, $.001 par
value, of the Company.
(h) "Company" shall mean AutoInfo, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.
(i) "Disability" shall mean an Optionee's inability to perform his
duties with the Company or on the Board by reason of any medically determinable
physical or mental impairment, as determined by a physician selected by the
Optionee and acceptable to the Company.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.
(k) "Fair Market Value" per share as of a particular date shall mean
(i) if the shares of Common Stock are then listed on a national securities
exchange, the closing sales price per share of Common Stock on the national
securities exchange on which the Common Stock is principally traded for the last
preceding date on which there was a sale of such Common Stock on such exchange,
or (ii) if the shares of Common Stock are then traded in an over-the-counter
market, the closing bid price for the shares of Common Stock in such
over-the-counter market for the last preceding date on which there was a sale of
such Common Stock in such market, or (iii) if the shares of Common Stock are not
then listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee, in its sole discretion, shall determine.
(l) "Incentive Stock Option" shall mean any option intended to be
and designated as an incentive stock option within the meaning of Section 422 of
the Code.
(m) "Nonemployee Director" shall mean a member of the Board who is
not an employee of the Company.
(n) "Nonqualified Option" shall mean an Option that is not an
Incentive Stock Option.
(o) "Option" shall mean the right, granted hereunder, to purchase
shares of Common Stock. Options granted by the Committee pursuant to the Plan
may constitute either Incentive Stock Options or Nonqualified Stock Options.
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(p) "Optionee" shall mean a person who receives a grant of an Option
under the Plan.
(q) "Option Price" shall mean the exercise price of an Option to
purchase a share of Common Stock covered by such Option.
(r) "Parent" shall mean any company (other than the Company) in an
unbroken chain of companies ending with the Company if, at the time of granting
an Option, each of the companies other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other companies in such chain.
(s) "Plan" shall mean this AutoInfo, Inc. 2006 Stock Option Plan.
(t) "Rule 16b-3" shall mean Rule 16b-3, as from time to time in
effect, promulgated by the Securities and Exchange Commission under Section 16
of the Exchange Act, including any successor to such Rule.
(u) "Subsidiary" shall mean any company (other than the Company) in
an unbroken chain of companies beginning with the Company if, at the time of
granting an Option, each of the companies other than the last company in the
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other companies in
such chain.
(v) "Ten Percent Stockholder" shall mean an Optionee who, at the
time an Incentive Stock Option is granted, owns (or is deemed to own pursuant to
the attribution rules of Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary.
3. Administration.
The Plan, except as may otherwise be determined by the Board, shall
be administered by the Committee, the members of which shall be "nonemployee
directors" under Rule 16b-3 and "outside directors" under Section 162(m) of the
Code.
The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Options; to
determine which Options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine the purchase
price of the shares of Common Stock covered by each Option; to determine the
persons to whom, and the time or times at which awards shall be granted; to
determine the number of shares to be covered by each award; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Agreements (which need not be
identical) and to cancel or suspend awards, as necessary; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
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The Committee may not delegate its authority to grant Options. The
Committee may employ one or more persons to render advice with respect to any
responsibility the Committee may have under the Plan. The Board shall have sole
authority, unless expressly delegated to the Committee, to grant Options to
Nonemployee Directors. All decisions, determination and interpretations of the
Committee shall be final and binding on all Optionees of any awards under this
Plan.
The Board shall have the authority to fill all vacancies, however
caused, in the Committee. The Board may from time to time appoint additional
members to the Committee, and may at any time remove one or more Committee
members. One member of the Committee shall be selected by the Board as chairman.
The Committee shall hold its meetings at such times and places as it shall deem
advisable. All determinations of the Committee shall be made by a majority of
its members either present in person or participating by conference telephone at
a meeting or by written consent. The Committee may appoint a secretary and make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any award
granted hereunder.
4. Eligibility.
Awards may be granted to officers and other key employees of and
consultants to the Company, and its Subsidiaries, including officers and
directors who are employees, and to Nonemployee Directors. In determining the
persons to whom awards shall be granted and the number of shares to be covered
by each award, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
5. Stock.
The maximum number of shares of Common Stock reserved for the grant
of awards under the Plan shall be Three Million (3,000,000), subject to
adjustment as provided in Section 9 hereof. Such shares may, in whole or in
part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company. The Company, during the term of this Plan, will at
all times reserve and keep available such number of shares of Common Stock as
shall be sufficient to satisfy the requirements of the Plan.
If any outstanding award under the Plan should for any reason
expire, be canceled or be forfeited without having been exercised in full, the
shares of Common Stock allocable to the unexercised, canceled or terminated
portion of such award shall (unless the Plan shall have been terminated) become
available for subsequent grants of awards under the Plan.
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6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by an
Agreement, in such form and containing such terms and conditions as the
Committee shall from time to time approve, which Agreement shall comply with and
be subject to the following terms and conditions, unless otherwise specifically
provided in such Agreement:
(a) Number of Shares. Each Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) Type of Option. Each Agreement shall specifically state that the
Option constitutes an Incentive Stock Option or a Nonqualified Stock Option.
(c) Option Price. Each Agreement shall state the Option Price, which
shall not be less than one hundred percent (100%) of the Fair Market Value per
share of Common Stock covered by the Option on the date of grant. The Option
Price shall be subject to adjustment as provided in Section 9 hereof. The date
as of which the Committee adopts a resolution expressly granting an Option shall
be considered the day on which such Option is granted, unless such resolution
specifies a different date.
(d) Exercise Schedule and Period of Options. Each Agreement shall
provide the exercise schedule for the Option as determined by the Committee;
provided, however, that, the Committee shall have the authority to accelerate
the exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. The exercise
period shall be ten (10) years from the date of the grant of the Option unless
otherwise determined by the Committee; provided, however, that, in the case of
an Incentive Stock Option, such exercise period shall not exceed ten (10) years
from the date of grant of such Option. The exercise period shall be subject to
earlier termination as provided in Sections 6(f), 6(g) and 6(h) hereof. An
Option may be exercised, as to any or all full shares of Common Stock as to
which the Option has become exercisable, by written notice delivered in person
or by mail to the Chief Financial Officer of the Company, specifying the number
of shares of Common Stock with respect to which the Option is being exercised.
(e) Medium and Time of Payment. The Option Price multiplied by the
number of shares of Common Stock exercised by the Optionee shall be paid in
full, at the time of exercise, in cash.
(f) Termination. Except as provided in this Section 6(f) and in
Sections 6(g) and 6(h) hereof, an Option may not be exercised unless (i) with
respect to an Optionee who is an employee of the Company or a Subsidiary, the
Optionee is then in the employ of the Company or a Subsidiary (or a company or a
Parent or Subsidiary company of such company issuing or assuming the Option in a
transaction to which Section 424(a) of the Code applies), and unless the
Optionee has remained continuously so employed since the date of grant of the
Option and (ii) with respect to an Optionee who is a Nonemployee Director, the
Optionee is then serving as a member of the Board or as a member of a board of
directors of a company or a Parent or
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Subsidiary company of such company issuing or assuming the Option. In the event
that the employment of an Optionee shall terminate or the service of an Optionee
as a member of the Board shall cease (other than by reason of death or
Disability), all Options of such Optionee that are exercisable at the time of
such termination may, unless earlier terminated in accordance with their terms,
be exercised within ninety (90) days after the date of such termination of
service (or such different period as the Committee shall prescribe).
(g) Death or Disability of Optionee. If an Optionee shall die while
employed by the Company or a Subsidiary or serving as a member of the Board, or
within ninety (90) days after the date of termination of such Optionee's
employment or cessation of such Optionee's service which shall not have been for
Cause, in which case this Section 6(g) shall not be applicable, (or within such
different period as the Committee may have provided pursuant to Sections 6(f)
hereof), or if the Optionee's employment shall terminate or service shall cease
by reason of Disability, all Options theretofore granted to such Optionee (to
the extent otherwise exercisable) may, unless earlier terminated in accordance
with their terms, be exercised by the Optionee or by his beneficiary, at any
time within one year after the death or Disability of the Optionee (or such
different period as the Committee shall prescribe). In the event that an Option
granted hereunder shall be exercised by the legal representatives of a deceased
or former Optionee, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative to exercise such Option. Unless otherwise determined by the
Committee, Options not otherwise exercisable on the date of termination of
employment shall be forfeited as of such date.
(h) Termination for Cause. In the event that the employment of an
Optionee shall terminate or the service of an Optionee as a member of the Board
shall cease for Cause, all Options of such Optionee that are exercisable at the
time of such termination may, unless earlier terminated in accordance with their
terms, be exercised within thirty (30) days after the date of such termination
of service (or such different period as the Committee shall prescribe).
(i) Other Provisions. The Agreements evidencing awards under the
Plan shall contain such other terms and conditions not inconsistent with the
Plan as the Committee may determine, including penalties for the commission of
competitive acts.
7. Nonqualified Stock Options.
Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 6 hereof.
8. Incentive Stock Options.
Options granted pursuant to this Section 8 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 6 hereof. An Incentive Stock Option may not be granted to a
Nonemployee Director or a consultant to the Company.
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(a) Value of Shares. The aggregate Fair Market Value (determined as
of the date the Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options granted under this Plan and all
other option plans of any subsidiary become exercisable for the first time by
each Optionee during any calendar year shall not exceed $100,000.
(b) Ten Percent Stockholder. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the date of grant of such Incentive Stock Option, and (ii) the
exercise period shall not exceed five (5) years from the date of grant of such
Incentive Stock Option.
9. Effect of Certain Changes.
(a) In the event of any stock dividend, recapitalization, merger,
consolidation, stock split, or combination or exchange of such shares, or other
similar transactions, each of the number of shares of Common Stock available for
awards, the number of such shares covered by outstanding awards, and the Option
Price, as appropriate, shall be equitably adjusted by the Committee to reflect
such event and preserve the value of such awards.
(b) Upon the occurrence of a Change in Control, each Option granted
under the Plan and then outstanding but not yet exercisable shall thereupon
become fully exercisable.
10. Surrender and Exchange of Awards.
The Committee may permit the voluntary surrender of all or a portion
of any Option granted under the Plan or any option granted under any other plan,
program or arrangement of the Company or any Subsidiary ("Surrendered Option"),
to be conditioned upon the granting to the Optionee of a new Option for the same
number of shares of Common Stock as the Surrendered Option, or may require such
voluntary surrender as a condition precedent to a grant of a new Option to such
Optionee. Subject to the provisions of the Plan, such new Option may be an
Incentive Stock Option or a Nonqualified Stock Option, and shall be exercisable
at the price, during such period and on such other terms and conditions as are
specified by the Committee at the time the new Option is granted.
11. Period During Which Awards May Be Granted.
Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from the date the Plan is adopted by the Board, or
the date the Plan is approved by the shareholders of the Company, whichever is
earlier, unless the Board shall terminate the Plan at an earlier date.
12. Nontransferability of Awards.
Except as otherwise determined by the Committee, awards granted
under the Plan shall not be transferable otherwise than by will or by the laws
of descent and distribution, and
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awards may be exercised or otherwise realized, during the lifetime of the
Optionee, only by the Optionee or by his guardian or legal representative.
13. Approval of Stockholders.
The Plan shall take effect upon its adoption by the Board and shall
terminate on the tenth anniversary of such date, but the Plan (and any grants of
awards made prior to the shareholder approval mentioned herein) shall be subject
to the approval of Company's shareholders, which approval must occur within
twelve months of the date the Plan is adopted by the Board.
14. Agreement by Optionee Regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise of a
Nonqualified Stock Option (a "Tax Event"), each Optionee who is not a
Nonemployee Director shall agree that no later than the date of the Tax Event,
such Optionee will pay to the Company or make arrangements satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the Tax Event. Alternatively, the Committee
may provide that such an Optionee may elect, to the extent permitted or required
by law, to have the Company deduct federal, state and local taxes of any kind
required by law to be withheld upon the Tax Event from any payment of any kind
due the Optionee. The withholding obligation may be satisfied by the withholding
or delivery of Common Stock. Any decision made by the Committee under this
Section 14 shall be made in its sole discretion.
15. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that, unless otherwise determined
by the Board, an amendment that requires stockholder approval in order for the
Plan to continue to comply with Rule 16b-3, Section 162(m) of the Code or any
other law, regulation or stock exchange requirement shall not be effective
unless approved by the requisite vote of stockholders. Except as provided in
Section 9(a) hereof, no suspension, termination, modification or amendment of
the Plan may adversely affect any award previously granted, unless the written
consent of the Optionee is obtained.
16. Rights as a Stockholder.
An Optionee or a transferee of an award shall have no rights as a
stockholder with respect to any shares covered by the award until the date of
the issuance of a stock certificate to such for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distribution of other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 9(a) hereof.
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17. No Rights to Employment or Service as a Director or Consultant.
Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any Optionee the right to continue in the
employ of the Company or any Subsidiary or as a member of the Board or a
consultant to the Company or any Subsidiary or to be entitled to any
remuneration or benefits not set forth in the Plan or such Agreement or to
interfere with or limit in any way the right of the Company or any such
Subsidiary to terminate such Optionee's employment or service. Awards granted
under the Plan shall not be affected by any change in duties or position of an
employee Optionee as long as such Optionee continues to be employed by the
Company or any Subsidiary.
18. Beneficiary.
An Optionee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Optionee, the executor or administrator of the Optionee's estate
shall be deemed to be the Optionee's beneficiary.
19. Governing Law.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.
20. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option or
other compensation plans in effect for the Company or any Subsidiary, nor shall
the Plan preclude the Company from establishing any other forms of incentive or
other compensation plans.
21. Singular, Plural; Gender.
Whenever used herein, nouns in the singular shall include the
plural, and the masculine pronoun shall include the feminine gender.
22. Headings, Etc., No Part Of Plan.
Headings of Sections hereof are inserted for convenience and
reference; they constitute no part of the Plan.
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