AMENDMENT NO. 1 TO
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
Check the appropriate box:
[X] Preliminary information statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14c-5(d)(2)
[ ] Definitive information statement
ADSOUTH PARTNERS , INC.
(formerly Zenith Technology, Inc.)
(Name of Registrant as Specified in Its Charter)
[X] No Fee Required
[ ] Fee Computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
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):
4. Proposed aggregate offering price:
5. Total fee paid:
[ ] 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.
1. Amount previously paid:
2. Form, schedule, or registration statement number:
3. Filing party:
4. Date filed:
NOTES:
INFORMATION STATEMENT ON SCHEDULE 14C
DATED: ARPIL 1, 2004
ADSOUTH PARTNERS , INC.
(formerly Zenith Technology, Inc.)
299 W. Camino Gardens Dr., Suite 200
Boca Raton, FL, USA 33432
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY IN CONNECTION WITH ANY SHAREHOLDER VOTE
PROPOSED HEREIN, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement (the "Information Statement") is furnished to the
shareholders of Adsouth Partners, Inc. (formerly known as Zenith Technology,
Inc.), a Nevada corporation ("us", "we" or the "Company"), with respect to
certain actions proposed to be taken by the shareholders of the Company (the
"Proposals"). The information to which this Amendment No. 1 to Preliminary
Information Statement relates was filed with the United States Securities and
Exchange Commission (the "SEC") on Schedule 14C on January 29, 2004, and is
expected to be provided to shareholders on or about April 21, 2004, or such
sooner date as the SEC shall permit. The Company shall deliver the Information
Statement to the shareholders of record by either: (a) mailing it to each
shareholder of record individually; (b) mailing it to multiple shareholders
using a shared address; or (c) mailing it in a form to which each shareholder
has consented in writing.
The Proposals have been set out in five (5) corporate resolutions already
approved by the Board of Directors of the Company, and expected to be passed by
a majority of the outstanding shares of our capital stock at the earliest
opportunity following full compliance with all applicable securities filings
with the SEC under Rule 14C-101, and the passage of applicable waiting periods
with respect to the implementation of such Resolutions.
The Proposals which are the subject of this Information Statement are as
follows:
1. That the Articles of Incorporation of the Company be amended in the form
attached as Exhibit A to this Information Statement, and specifically to ratify
---------
an amendment to Article One of the Articles of Incorporation which was filed
with the Secretary of State of Nevada changing the name of the Company to
Adsouth Partners, Inc.;
2. That the Articles of Incorporation of the Company be amended in the form
attached as Exhibit A to this Information Statement to amend Article Four of the
---------
Articles of Incorporation to increase the authorized number of its shares of
Common Stock to five hundred million (500,000,000) shares;
3. That the Articles of Incorporation of the Company be amended in the form
attached as Exhibit A to this Information Statement to amend Article Four of the
---------
Articles of Incorporation to authorize the issuance of Preferred Stock, with a
par value of one-hundredth of one cent ($.0001) per share. The number of shares
of Preferred Stock which the Company will be authorized to issue is five million
(5,000,000) shares. Of such amount, the Company will designate and establish
one (1) series of Preferred Stock, namely Series A Convertible Preferred Stock.
The number of shares of Series A Convertible Preferred Stock the Corporation
will be authorized to issue will be three million five hundred thousand
(3,500,000) shares. The Series A Convertible Preferred Stock will provide to
the holders of such shares the right to convert each single share thereof into
one hundred (100) shares of fully-paid, validly issued and non-assessable shares
of the Company's Common Stock, without further consideration, upon any "change
of control" of the Company. For purposes of the Series A Convertible Preferred
Stock, a "change of control" will be deemed to have occurred in the event that
any person or entity acquires more than twenty-five percent (25%) of the
aggregate number of shares of the Company's issued and outstanding Common Stock
in any single transaction or series of transactions which has not been approved
by our Board of Directors. The Board of Directors, within any limits and
restrictions stated, may determine or alter the rights, preferences, privileges
and restrictions granted to or imposed upon any wholly unissued series of
Preferred Stock. All remaining shares of Preferred Stock not specifically
designated by this Amendment may be designated in the future by action of the
Company's Board of Directors and otherwise in accordance with the applicable
provisions of the Nevada Revised Statutes of the State of Nevada.;
4. That the 2004 Adsouth Partners, Inc. Stock Incentive Plan (the "Stock
Incentive Plan"), substantially in the form attached as Exhibit B to this
---------
Information Statement, be adopted and approved as the Stock Incentive Plan of
the Corporation from and after the date of its authorization by the shareholders
of the Company; and
5. That the 2004 Adsouth Partners, Inc. Management Incentive Program (the
"Management Incentive Program"), substantially in the form attached as Exhibit C
---------
to this Information Statement, be adopted and approved as the Management
Incentive Program of the Corporation from and after the date of its
authorization by the shareholders of the Company.
ONLY THE COMPANY'S SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MARCH 31,
2004 (THE "RECORD DATE") ARE ENTITLED TO NOTICE OF THE PROPOSALS. PRINCIPAL
SHAREHOLDERS WHO, AS OF THE RECORD DATE, COLLECTIVELY HELD IN EXCESS OF 50% OF
THE COMPANY'S OUTSTANDING SHARES ENTITLED TO VOTE ON THE PROPOSALS HAVE
INDICATED THAT THEY WILL VOTE IN FAVOR OF THE PROPOSALS. MOST OF THESE SHARES
ARE HELD BY PERSONS WHO ARE ALSO DIRECTORS OF OUR COMPANY AND HAVE THEREFORE
ALREADY APPROVED THE MATTERS COVERED BY THE PROPOSALS. AS A RESULT, THE
PROPOSALS ARE EXPECTED TO BE APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER
SHAREHOLDERS OF THE COMPANY. OTHER THAN AS SPECIFICALLY INDICATED FURTHER IN
THIS SCHEDULE, THE ACTIONS DESCRIBED HEREIN ARE EXPECTED TO BE TAKEN NOT LESS
THAN TWENTY (20) DAYS FROM THE MAILING OF THIS INFORMATION STATEMENT, BUT AS
SOON THEREAFTER AS PRACTICABLE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JOHN P. ACUNTO
------------------------------------
JOHN P. ACUNTO
CHIEF EXECUTIVE OFFICER
Dated April 1, 2004
TABLE OF CONTENTS
ABOUT THE INFORMATION STATEMENT Page 5
What is the Purpose of the Information Statement? Page 5
Who is Entitled to Notice? Page 6
What Constitute the Voting Shares of the Company? Page 6
What Corporate Matters will the Principal Shareholders
Vote for and How will they Vote? Page 6
What Vote is Required to Approve the Proposals? Page 7
DISSENTERS' RIGHTS OF APPRAISAL Page 7
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF Page 7
PROPOSAL NO. 1 - RATIFICATION OF AUTHORIZATION TO CHANGE CORPORATE NAME TO
ADSOUTH PARTNERS, INC.
PROPOSAL NO. 2 - AUTHORIZATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
THE COMPANY'S CAPITAL COMMON STOCK.
PROPOSAL NO. 3 - AUTHORIZATION FOR THE COMPANY TO CREATE A CLASS AND SERIES OF
CONVERTIBLE PREFERRED STOCK.
PROPOSAL NO. 4 - AUTHORIZATION TO ADOPT THE 2004 ADSOUTH PARTNERS, INC. STOCK
INCENTIVE PLAN.
PROPOSAL NO. 5 - AUTHORIZATION TO ADOPT THE 2004 ADSOUTH PARTNERS, INC.
MANAGEMENT INCENTIVE PLAN.
AVAILABLE INFORMATION
EXHIBITS
ADSOUTH PARTNERS , INC.
(formerly Zenith Technology, Inc.)
299 W. Camino Gardens Dr., Suite 200
Boca Raton, FL, USA 33432
INFORMATION STATEMENT
APRIL 1, 2004
-------------
This Information Statement (the "Information Statement") contains information
related to certain actions proposed to be taken by the shareholders of Adsouth
Partners, Inc. (formerly Zenith Technology, Inc.), a Nevada corporation (the
"Company"), and is expected to be mailed to shareholders on or about April 21,
2004. The Company shall deliver the Information Statement to the shareholders
of record by either: (a) mailing it to each shareholder of record individually;
(b) mailing it to multiple shareholders using a shared address; or (c) mailing
it in a form to which each shareholder has consented in writing.
ABOUT THE INFORMATION STATEMENT
WHAT IS THE PURPOSE OF THE INFORMATION STATEMENT?
-------------------------------------------------
This information statement is being furnished to you on Schedule 14C pursuant to
Section 14 of the Securities Exchange Act of 1934 to notify the Company's
shareholders as of the close of business on the Record Date of corporate action
expected to be taken pursuant to the consents or authorizations of principle
shareholders.
Shareholders holding a majority of the Company's outstanding common stock are
expected to vote in favor of certain corporate matters outlined in this
Information Statement, which actions are expected to take place on or about
April 21, 2004, and consist of (1) the approval of an amendment of the Company's
Articles of Incorporation to change the name of the Company to Adsouth Partners,
Inc.; (2) increase the authorized number of shares of the Company's common
stock; (3) the approval of an amendment of the Company's Articles of
Incorporation to create a class and series of convertible preferred stock; (4)
to authorize the amendment and restatement of our 2004 Adsouth Partners, Inc.
Stock Incentive Plan; and (5) to authorize the amendment and restatement of our
2004 Adsouth Partners, Inc. Management Incentive Plan, all as described herein.
We note that we have already filed paperwork with the Secretary of State of
Nevada changing the Company's name to Adsouth Partners, Inc., but not to
---
increase the authorized number of its common stock or to create a class and
series of convertible preferred stock. This paperwork was erroneously filed by
us earlier than the date of this Information Statement being filed and earlier
than the shareholder vote approving such change, and therefor the validity of
such filing maybe subject to challenge until such time as Proposal No. 1 in its
entirety is actually approved by the shareholders. Rather than spend more of
the Company's resources to correct this erroneous filing and then refile it in
thirty days, our Board of Directors has elected to leave the filing in place,
inasmuch as the vote is virtually assured by shareholders who control a
sufficient amount of our shares to approve the Proposals, and who have indicated
their support in favor of Proposal No. 1. In the event this situation changes,
or some other challenge is raised which threatens to invalidate our accidentally
premature filing, we will file a corrective document with the Secretary of State
of Nevada, and refile our amendment subsequent to the date of our shareholder
vote, tentatively scheduled to occur on or about April 21, 2004.
WHO IS ENTITLED TO NOTICE?
- ------------------------------
Each outstanding share of common stock of record on the close of business on
March 31, 2004 (the "Record Date"), will be entitled to notice of each matter to
be voted upon pursuant to consents or authorizations. Shareholders as of the
close of business on the record date that held in excess of fifty percent (50%)
of the Company's outstanding shares of common stock have already indicated that
they will vote in favor of the Proposals. Under Nevada corporate law, all
activities requiring shareholder approval may be taken by obtaining the written
consent and approval of more than 50% of the holders of voting stock in lieu of
a meeting of the shareholders. No action by the minority shareholders in
connection with the Proposals is required.
WHAT CONSTITUES THE VOTING SHARES OF THE COMPANY?
- --------------------------------------------------------
The voting power entitled to vote on the proposals consists of the vote of the
holders of a majority of the voting power of the common stock, each of whom is
entitled to one vote per share. As of the record date, 80,746,408 shares of
common stock were issued and outstanding.
WHAT CORPORATE MATTERS WILL THE SHAREHOLDERS VOTE FOR AND HOW WILL THEY VOTE?
- --------------------------------------------------------------------------------
Shareholders holding a majority of our outstanding stock have indicated that
they will vote in favor of the following Proposals:
1. TO AMEND OUR ARTICLES OF INCORPORATION TO CHANGE OUR CORPORATE NAME TO
ADSOUTH PARTNERS, INC.;
---------------------
2. TO INCREASE THE AUTHORIZED SHARES OF ITS COMMON STOCK TO FIVE HUNDRED
MILLION (500,000,000);
3. TO CREATE A CLASS OF CONVERTIBLE PREFERRED STOCK WITH AN AUTHORIZED
AMOUNT OF FIVE MILLION (5,000,000) SHARES OF WHICH THREE MILLION FIVE HUNDRED
THOUSAND (3,500,000) SHARES WILL BE DESIGNATED SERIES A CONVERTIBLE PREFERRED
STOCK. THE SERIES A CONVERTIBLE PREFERRED STOCK SHALL PROVIDE TO THE HOLDERS OF
SUCH SHARES THE RIGHT TO CONVERT EACH SINGLE SHARE THEREOF INTO ONE HUNDRED
(100) SHARES OF FULLY-PAID, VALIDLY ISSUED AND NON-ASSESSABLE SHARES OF THE
COMPANY'S COMMON STOCK, WITHOUT FURTHER CONSIDERATION, UPON ANY "CHANGE OF
CONTROL" OF THE COMPANY. FOR PURPOSES OF THE SERIES A CONVERTIBLE PREFERRED
STOCK, A "CHANGE OF CONTROL" SHALL BE DEEMED TO HAVE OCCURRED IN THE EVENT THAT
ANY PERSON OR ENTITY SHALL HAVE ACQUIRED MORE THAN TWENTY-FIVE PERCENT (25%) OF
THE AGGREGATE NUMBER OF SHARES OF THE COMPANY'S ISSUED AND OUTSTANDING COMMON
STOCK IN ANY SINGLE TRANSACTION OR SERIES OF TRANSACTIONS WHICH HAS NOT BEEN
APPROVED BY OUR BOARD OF DIRECTORS;
4. TO AMEND AND RESTATE OUR STOCK INCENTIVE PLAN TO REFLECT THE COMPANY'S
NEW NAME AND TO INCREASE THE NUMBER OF AUTHORIZED SHARES AVAILABLE FOR GRANTS
UNDER THE PLAN; AND
5. TO AMEND AND RESTATE OUR MANAGEMENT INCENTIVE PROGRAM TO REFLECT THE
COMPANY'S NEW NAME, TO INCREASE THE NUMBER OF AUTHORIZED SHARES AVAILABLE FOR
GRANTS UNDER THE PLAN, AND TO MAKE MINOR CORRECTIONS OF TYPOGRAPHICAL ERRORS
THAT WERE IN OUR PREVIOUSLY ADOPTED MANAGEMENT INCENTIVE PLAN.
WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS?
- ------------------------------------------------------
The affirmative vote of a majority of the shares of our Common Stock issued and
outstanding on the record date is required for approval of the Proposals. We
believe that such majority will vote in favor of the Proposals. As of 5:00 p.m.
on March 31, 2004, the Record Date for determining the shareholders of the
Company who are entitled to vote on the Proposals, we had 80,746,408 shares of
our Common Stock issued and outstanding.
DISSENTERS' RIGHTS OF APPRAISAL
There is no provision in the Nevada General Corporation law, nor in our Articles
of Incorporation or Bylaws, providing our stockholders with dissenters' rights
of appraisal to demand payment in cash for their shares of Common Stock in
connection with the implementation of any of the Proposals described in this
Information Statement.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information regarding the beneficial ownership of
shares of the Company's common stock as of March 31, 2004. As of such date, the
Company had 80,746,408 shares of common stock issued and outstanding, and no
other shares issued and outstanding. The table below identifies all shares of
the Company's common stock that were owned by (i) all shareholders known to the
Company to be beneficial owners of more than 5% of the Company's outstanding
common stock; (ii) each director and executive officer of the Company; and (iii)
all officers and directors of the Company as a group, in each case as of March
31, 2004. Except as may be otherwise indicated in the footnotes to the table
below, each person has sole voting power and sole dispositive power as to all of
the shares shown as beneficially owned by them.
TITLE NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
CLASS BENEFICIAL OWNER BENEFICIAL OWNER CLASS
- -------------------------- --------------------- --------------------- ----------
Common John P. Acunto, Jr. 48,000,000 1 59.45%
Officer, Director
299 West Camino Gardens
Suite 200
Boca Raton, FL USA
33432
Common John Cammarano 867,611 1.07%
Officer
299 West Camino Gardens
Suite 200
Boca Raton, FL USA
33432
Common Lee Wingeier 700,000 0.87%
Officer
299 West Camino Gardens
Suite 200
Boca Raton, FL USA
33432
Common Gary Hohman 3,000,000 3.72%
Officer
299 West Camino Gardens
Suite 200
Boca Raton, FL USA
33432
Common Angela E. Acunto 48,000,000 1 59.45%
Officer
299 West Camino Gardens
Suite 200
Boca Raton, FL USA
33432
Common Tiger Fund, Inc. 12,084,098 14.97%
2600 Michelson Drive
17th Floor
Irvine, CA 92612
Shares of all directors 52,576,611 65.11%
and Executive officers as
a group
1 John P. Acunto and Angela E. Acunto are husband and wife and, pursuant to
Rule 13d-3, each of them may be deemed to have beneficial ownership of the
amount of shares reflected as owned by the other in the table above.
PROPOSAL 1 - RATIFICATION TO THE CHANGE OF OUR CORPORATE NAME TO ADSOUTH
PARTNERS, INC.
Our Board of Directors has determined that it would be in the best interests of
the Company and our shareholders to change the name of the Company to Adsouth
Partners, Inc. We note that we have already filed paperwork with the Secretary
of State of Nevada changing the Company's name to Adsouth Partners, Inc., and
the Amendment became effective upon its filing with the Nevada Secretary of
State on January 8, 2004. We have not yet filed with the Secretary of State of
---
Nevada an amendment to increase the authorized number of its common stock or to
create a class and series of convertible preferred stock, as discussed in
Proposal No. 2 and Proposal No. 3 below. The paperwork to amend the Articles of
Incorporation to change our corporate name was erroneously filed by us earlier
than the initial date on which this Information Statement was originally filed,
and earlier than the shareholder vote approving such change described herein,
and therefore the validity of such filing may be subject to challenge until such
time as this Proposal No. 1 is actually approved by the shareholders. However,
rather than spend more of the Company's limited resources to correct this
erroneous filing and then re-file it, our Board of Directors has elected to
leave the filing in place because the vote is virtually assured by shareholders
who control a sufficient amount of our voting shares to approve the Proposals
and who have indicated their support in favor of Proposal No. 1. We do now
recognize that this triggered a technical violation of Rule 14c-2(b) of the 1934
Act Rules, which we did not realize at the time. In the event that some
challenge is raised which threatens to invalidate our premature filing, we will
file a corrective document with the Secretary of State of Nevada, and re-file
our amendment subsequent to the date of our shareholder vote, tentatively
scheduled to occur on or about April 21, 2004. The only effect of the
Amendment, as filed, was to change the name of our corporation from Zenith
Technologies, Inc. to Adsouth Partners, Inc., and the subsequent ratification of
such action by the shareholders as called for in this Proposal No. 1 will
eliminate any challenge that the name change has not been approved by both the
Board of Directors and the shareholders of the Company.
PROPOSAL 2 - AUTHORIZATION TO INCREASE THE AMOUNT OF OUR AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK.
This Proposal, when adopted by the shareholders of the Company as contemplated
herein, will permit the Company to increase the authorized number of its common
stock from its current authorized amount from one hundred million shares
(100,000,000) to five hundred million (500,000,000). The purpose of this
Proposal is to authorize the additional number of shares of its Common Stock in
order to increase the total amount of shares which may be issued by the Company
(1) in order to raise additional capital for the Company in the future; (2) to
satisfy the grant of compensatory awards pursuant to the Company's Incentive
Stock Option Plan and Management Incentive Plan as such plans are described
elsewhere in this Information Statement; (3) to have shares available for the
making of possible acquisitions, joint ventures, strategic alliances or other
corporate arrangements if and to the extent that such arrangements may be
specifically approved by the Board of Directors of the Company at some point in
the future; and for such other purposes as the Board of Directors may determine
from time to time following the authorization of such increase.
As of the date of this Information Statement, other than in connection with the
fulfillment of the grant of compensatory awards to John Acunto, Angela Acunto,
Gary Hohman and John Cammarano under the Management Incentive Plan described in
Proposal No. 5 in this Information Statement, the Company has no present
arrangement, obligation or specific intention to issue shares of our Common
Stock to accomplish any of the items set forth in the preceding paragraph,
however the Board of Directors will have the express authority, without further
shareholder approval, to issue shares of our Common Stock out of the pool of
authorized but unissued shares of Common Stock (up to 500,000,000 shares) for
any of the purposes described above without the further approval by, or prior
knowledge of, the shareholders once this Proposal No. 2 is adopted by the
shareholders of the Company.
We anticipate effectuating the Amendment with the Nevada Secretary of State in
substantially the form attached as Exhibit A to this Information Statement on or
---------
about April 21, 2004.
PROPOSAL 3 - AUTHORIZATION TO CREATE A CLASS AND SERIES OF CONVERTIBLE PREFERRED
STOCK.
This Proposal, when adopted by the shareholders of the Company as contemplated
herein, will permit the Company to create a class and series of convertible
preferred stock, and to authorize the issuance of up to five million (5,000,000)
shares of convertible preferred stock by the Board of Directors of the Company,
of which three million five hundred thousand (3,500,000) shares will be
designated Series A Convertible Preferred Stock. The convertible preferred
stock authorized by this Amendment could be used for any of the same purposes
enumerated with respect to the issuance of Common Stock in Proposal No. 2 above.
The Board of Directors, within any limits and restrictions stated, may determine
or alter the rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock.
The Series A Convertible Preferred Stock is specifically designed to provide the
holders of such shares the right to convert each single share thereof into one
hundred (100) shares of fully-paid, validly issued and non-assessable shares of
the Company's Common Stock, without further consideration, upon any "change of
control" of the Company. For purposes of the Series A Convertible Preferred
Stock, a "change of control" shall be deemed to have occurred in the event that
any person or entity shall have acquired more than twenty-five percent (25%) of
the aggregate number of shares of the Company's issued and outstanding Common
Stock in any single transaction or series of transactions which is not approved
by our Board of Directors. While the Board of Directors will have the ability
to issue shares of Series A Convertible Preferred Stock to any person once it
has been duly authorized and created, the primary purpose for the authorization
to issue a series of stock having the particular attributes of the proposed
Series A Convertible Preferred Stock is to serve as a deterrent to any outside
person taking control of the Company away from its existing controlling
shareholders.
As of the date of this Information Statement, other than in connection with the
fulfillment of the grant of compensatory awards to John Acunto, Angela Acunto,
Gary Hohman and John Cammarano under the Management Incentive Plan described in
Proposal No. 5 in this Information Statement, the Company has no present
arrangement, obligation or specific intention to issue shares of our Common
Stock to accomplish any of the items enumerated above, however the Board of
Directors will have the express authority, without further shareholder approval,
to issue shares of our Common Stock out of the pool of authorized but unissued
shares of Common Stock (up to 500,000,000 shares) for any of the purposes
described above without the further approval by, or prior knowledge of, the
shareholders once this Proposal No. 2 is adopted by the shareholders of the
Company.
All remaining shares of Preferred Stock not so specifically designated may be
designated in the future by action of the Board of Directors of the Corporation
and otherwise in accordance with the applicable provisions of the Nevada Revised
Statutes of the State of Nevada. We anticipate effectuating the Amendment with
the Nevada Secretary of State in substantially the form attached as Exhibit A to
---------
this Information Statement on or about April 21, 2004.
PROPOSAL 4 - AUTHORIZATION TO ADOPT THE 2004 ADSOUTH PARTNERS, INC. STOCK
INCENTIVE PLAN
During 2003, the Company adopted the 2003 Zenith Technology Stock Incentive Plan
(the "2003 Incentive Plan"), providing for the award of direct stock grants,
options to purchase common stock, and awards based upon certain stock
appreciation rights. The 2003 Incentive Plan was filed with the SEC as an
Exhibit to a registration statement on Form S-8 on June 23, 2003. On May 9,
2003, the Company's Board of Directors authorized additional shares of stock to
be available under the 2003 Incentive Plan bringing the total amount of shares
available for issuance under the 2003 Incentive Plan to 13,099,220.
As of the date of this Information Statement, no stock options or stock
appreciation rights have been granted under the 2003 Stock Incentive Plan.
Stock grants totaling 13,017,000 have been made to consultants of the Company
pursuant to the Stock Incentive Plan, which amounts included 4,000,000 shares to
Timothy N. Williams, who provided management services to our company and
subsequently became the president of Tiger Fund, Inc.; 8,417,000 shares to Omar
Rizvi, managing member of Strategy Partners, LLC, which currently provides us
management consulting, business development and compliance services; and 350,000
shares each to Glenn Robinson and John Cammarano, who provide us ongoing sales
and marketing consulting services in connection with our recent acquisition of
the product line known as Derma Fresh. Mr. Cammarano has become the President
of our company subsequent to the closing of the Derma Fresh acquisition.
Once adopted, the 2004 Adsouth Stock Incentive Plan will have authorized up to
15,000,000 shares for issuance to selected non-management employees,
consultants, directors and advisors upon the specific approval of our Board of
Directors. During the first fiscal quarter of 2004, we issued a total of
466,666 shares of stock to a total of five (5) non-management, non-director
employees. Had the 2004 Stock Incentive Plan been approved on the date these
shares were issued, such shares would have been issued under the Stock Incentive
Plan. Since the 2004 Stock Incentive Plan cannot be made effective until it has
been approved by the shareholders on the date which is 20 days from the date
this Information Statement is mailed to our shareholders, the shares issued to
the non-management, non-director employees referred to above had to be issued
outside of that Stock Incentive Plan, and our company may not receive as
favorable tax treatment as if the shares had been issued under the 2004 Stock
Incentive Plan, however, we intend to seek to have such shares deemed issued
under the Plan, as originally authorized, if and to the extent that we may be
permitted to do so after the 2004 Stock Incentive Plan becomes fully effective.
It is possible that none of the shares of stock will be includible in the 2004
Stock Incentive Plan.
Our Stock Incentive Plan must be amended and restated to reflect the new name of
the Company, Adsouth Partners, Inc., (see Proposal Number 1 above), and to
increase the authorized number of shares that are available for grants under the
Stock Incentive Plan. The Stock Incentive Plan is an internal document
maintained by our Board of Directors and does not require filing with the
Secretary of State of Nevada or any other governmental body in order to become
operative. We anticipate effectuating the amendment and restatement of our
Stock Incentive Plan in substantially the form attached as Exhibit B to this
---------
Information Statement, the "2004 Adsouth Partners, Inc. Stock Incentive Plan",
on or about April 21, 2004.
PROPOSAL 5 - AUTHORIZATION TO ADOPT THE 2004 ADSOUTH PARTNERS, INC. MANAGEMENT
INCENTIVE PROGRAM
During 2003, the Company adopted its 2003 Management Incentive Program (the
"Management Plan"), which provided for the issuance of up to 250,000 shares of
common stock for key management of our company. No awards of stock have been
made under the Management Plan as of the date of this filing, however on
February 27, 2004 our Board of Directors adopted a resolution to issue
management incentive shares to certain existing and proposed key management at
such time as our 2004 Management Incentive Program is formally adopted by the
shareholders. Our Management Plan must be amended and restated to reflect the
new name of our company, Adsouth Partners, Inc., (see Proposal Number 1 above),
to increase the number of shares available under the Management Incentive
Program consistent with the stock grants contemplated by the Board of Directors,
and to make minor corrections relating to typographical errors that were in the
prior version Management Incentive Program.
During the first fiscal quarter of 2004, we issued a total of 24,567,611 shares
of stock to a total of five (5) executive officers of our company, one of whom
is also a director. Had the 2004 Management Incentive Program been approved on
the date these shares were issued, such shares would have been issued under the
Management Incentive Program. Since the 2004 Management Incentive Program
cannot be made effective until it has been approved by the shareholders on the
date which is 20 days from the date this Information Statement is mailed to our
shareholders, the shares issued to the executive officers referred to above had
to be issued outside of that Management Incentive Program, and our company may
not receive as favorable tax treatment as if the shares had been issued under
the 2004 Management Incentive Program, however, we intend to seek to have such
shares deemed issued under the Plan, as originally authorized, if and to the
extent that we may be permitted to do so after the 2004 Management Incentive
Program becomes fully effective. It is possible that none of the shares of
stock will be includible in the 2004 Management Incentive Program. The shares
issued during the first fiscal quarter of 2004 to executive officers and
directors of the Company, and which we will seek to have included in the 2004
management Incentive Program once adopted as described above, included the
following:
Name of Executive Position with Company Number of Shares Awarded
------------------- ---------------------- ------------------------
John P. Acunto Chairman and CEO 10,000,000 1
John Cammarano President 467,611 2
Angela Acunto Executive Vice President 10,000,000 1
Gary Hohman Chief Operating Officer 3,000,000
1 John P. Acunto and Angela E. Acunto are husband and wife and, pursuant to
Rule 13d-3, each of them may be deemed to have beneficial ownership of the
amount of shares reflected as owned by the other in the table above.
2 Mr. Cammarano entered into an Employment Agreement with us, dated as of
March 18, 2004, pursuant to which he has the fully-vested option, for one year
from the date of the agreement, to purchase up to 1,000,000 shares of our common
stock from us for a price per share equal to the average closing price of our
shares for the ten-day period immediately preceding the date of the agreement.
The Agreement also provides him with the right to receive, among other
compensation, (a) a monthly stock commission equal to five percent (5%) of the
gross sales generated by us as a result of his direct sales efforts, calculated
using the average closing price of our trading shares during the month for which
such stock commission relates; and (b) a one-time stock bonus, such number of
our shares as is equal to One Hundred Thousand Dollars ($100,000) based upon the
average trading price of our shares for the ten-day period immediately preceding
the issuance of such shares, which issuance is required to be made within ten
days following the date that the Proposals described herein are enacted by the
shareholders. Due to the fluctuation in the market price of our shares, the
number of shares to which Mr. Cammarano may become entitled under this agreement
cannot be determined until the formulas described above can be calculated in the
manner described. It is likely that our 2004 Management Incentive Program will
need to be increased periodically in the future to accommodate the stock
payments contemplated by this employment agreement, as well as any further
similar commission-based agreements which the Board of Directors may authorize
the company to make with our management from time to time. Apart from the
shares described above, prior to joining Adsouth Partners, Inc., Mr. Cammarano
received 375,000 shares of our common stock in connection with consulting work
he performed, and continues to perform, for us pertaining to the Derma Fresh
product line which we have recently acquired.
Once adopted, the 2004 Management Incentive Program will have authorized up to
25,000,000 for issuance to key management personnel of our company upon the
specific approval of our Board of Directors. The Management Incentive Program
is an internal document maintained by our Board of Directors and does not
require filing with the Secretary of State of Nevada or any other governmental
body in order to become operative.
We anticipate effectuating the amendment and restatement of our Stock Incentive
Plan in substantially the form attached as Exhibit C to this Information
----------
Statement, the "2004 Adsouth Partners, Inc. Management Incentive Plan", on or
about April 21, 2004.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance with
the Exchange Act we file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). You may inspect and
copy the reports, proxy statements and other information filed by us with the
Commission at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You may also call the
Commission at 1-800-SEC-0330 for more information about the public reference
room, how to obtain copies of documents by mail or how to access documents
electronically on the Commission's Web site at (http://www.sec.gov).
The Board of Directors of the Company knows of no matters, other than those
described in this Information Statement, which have been recently approved or
considered by the holders of the Company's Common Stock.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John P. Acunto
-----------------------------------
John P. Acunto
Chief Executive Officer,
Dated April 1, 2004
EXHIBIT A
---------
CERTIFICATE OF AMENDMENT
(PURSUANT TO NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of Corporation: Zenith Technology, Inc.
2. The articles have been amended as follows:
Article One: The Name of the Corporation is: Adsouth Partners, Inc.
Article Four: This Corporation is authorized to issue two classes of stock,
which are voting Common Stock and Preferred Stock. The shares of Common
Stock which this Corporation is authorized to issue shall have a par value
of one-hundredth of one cent ($.0001) per share and the number of shares of
Common Stock this Corporation is authorized to issue is five hundred
million (500,000,000) shares. The shares of Preferred Stock this
Corporation is authorized to issue shall have a par value of one-hundredth
of one cent ($.0001) per share and the number of shares of Preferred Stock
this Corporation is authorized to issue is five million (5,000,000) shares.
Of such amount, the Corporation hereby designates and establishes one (1)
series of Preferred Stock, namely Series A Convertible Preferred Stock. The
number of shares of Series A Convertible Preferred Stock the Corporation is
authorized to issue shall be three million five hundred thousand
(3,500,000) shares. The Series A Convertible Preferred Stock shall provide
to the holders of such shares the right to convert each single share
thereof into one hundred (100) shares of fully-paid, validly issued and
non-assessable shares of the Company's Common Stock, without further
consideration, upon any "change of control" of the Company. For purposes of
the Series A Convertible Preferred Stock, a "change of control" shall be
deemed to have occurred in the event that any person or entity shall have
acquired more than twenty-five percent (25%) of the aggregate number of
shares of the Company's issued and outstanding Common Stock in any single
transaction or series of transactions which are not approved by our Board
of Directors. The Board of Directors, within any limits and restrictions
stated, may determine or alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued series of
Preferred Stock. All remaining shares of Preferred Stock not so
specifically designated may be designated in the future by action of the
Board of Directors of the Corporation and otherwise in accordance with the
applicable provisions of the Nevada Revised Statutes of the State of
Nevada.
3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power or such
greater proportion of the voting power as may be required in the case of a vote
by classes or series, or as may be required by the provisions of the articles of
incorporation have voted in favor of the amendment is: ______________.
4. Effective date of filing: February ___, 2004
5. Officer Signature: _____________________________
John P. Acunto, Chief Executive Officer
EXHIBIT B
---------
ADSOUTH PARTNERS, INC.
AMENDED AND RESTATED
STOCK INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Zenith Technology, Inc., a Nevada
corporation (hereinafter referred to as the "Company"), previously established a
stock option and incentive award plan known as the "Zenith Technology, Inc.
Stock Incentive Plan" (the "Plan"). Subsequently, the Company filed an
amendment to its Articles of Incorporation with the Nevada Secretary of State
changing its corporate name to Adsouth Partners, Inc. The Zenith Technology,
Inc. Stock Incentive Plan is hereby being amended and restated and shall be
hereafter known as the Adsouth Stock Incentive Plan" or the "Plan", as set forth
in this document. The Plan permits the grant of Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock, Stock Awards, Performance Share
Awards and Stock Appreciation Rights.
This Plan shall become effective on the date it is approved by the Board of
Directors (the "Effective Date"), subject to approval of the Plan by the
Company's stockholders within the 12-month period immediately thereafter, and
shall remain in effect as provided in Section 1.3 hereof.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to secure for the
Company and its shareholders the benefits of the incentive inherent in stock
ownership in the Company by employees, directors, and other persons who perform
services for the Company, and who are responsible for its future growth and
continued success. The Plan promotes the success, and enhances the value, of
the Company by linking the personal interests of Participants (as defined below)
to those of the Company's shareholders, and by providing Participants with an
incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract and retain the
services of Participants upon whose judgment, interest and special effort the
successful conduct of its operation largely depends.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
and shall remain in effect, subject to the right of the Board of Directors to
amend or terminate the Plan at any time pursuant to Article 14 hereof, until one
day prior to the tenth (10th) anniversary of the Effective Date.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below:
(a) "Agreement" means an agreement entered into by each Participant and
the Company, setting forth the terms and provisions applicable to Awards granted
to Participants under this Plan.
(b) "Award" means, individually or collectively, a grant under this Plan
of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Stock
Awards, Performance Share Awards or Stock Appreciation Rights.
(c) "Beneficial Owner" or "Beneficial Ownership" has the meanings given to such
terms in Rule 13d-3 of the Exchange Act.
(d) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(e) "Cause" means: (i) willful misconduct on the part of a Participant
that is materially detrimental to the Company; or (ii) the conviction of a
Participant for the commission of a felony. The existence of "Cause" under
either Clauses (i) or (ii) above shall be determined by the Committee.
Notwithstanding the foregoing, if the Participant has entered into a written
employment agreement that is binding as of the date of employment termination,
and if such employment agreement defines "Cause," and/or provides a means of
determining whether "Cause" exists, such definition of "Cause" and means of
determining its existence shall supersede this provision.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means a committee of two or more Non-Employee Directors
appointed by the Board to administer the Plan with respect to grants of Awards,
as specified in Article 3 hereof, and to perform the function set forth therein,
provided, however, that if a Committee has not been constituted by the Board as
- --------
of any date on which the Committee is required or permitted to act hereunder,
then references to acts of the Committee shall mean for all purposes acts of the
Board of Directors in its entirety.
(h) "Common Stock" means the common stock of the Company, par value $.0001
per share.
(i) "Company" means Adsouth Partners, Inc., a Nevada corporation, or any
successor thereto as provided in Article 17.
(j) "Corresponding SAR" means any SAR that is granted in relation to a
particular Option and that can be exercised only upon the surrender to the
Company, unexercised, of that portion of the Option to which the SAR relates.
(k) "Director" means any individual who is a member of the Board of
Directors of the Company.
(l) "Disability" has the meaning given to such term in the Company's
long-term disability plan covering the Participant, or in the absence of such
plan, a meaning consistent with Section 22(e)(3) of the Code.
(m) "Employee" means any employee of the Company, or the Company's
Subsidiaries. Directors who are not otherwise employed by the Company or the
Company's Subsidiaries are not considered Employees under this Plan.
(n) "Effective Date" has the meaning given to it in Section 1.1.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
(p) "Fair Market Value" shall be determined as follows:
(i) if, on the relevant date, the Shares are traded on a national or
regional securities exchange or on The Nasdaq Stock Market ("Nasdaq")
and closing sale prices for the Shares are customarily quoted, on the
basis of the closing sale price on the principal securities exchange
on which the Shares may then be traded on the date of calculation
thereof or, if there is no such sale on the relevant date, then on the
immediately preceding day on which a sale was reported;
(ii) if, on the relevant date, the Shares are not listed on any
securities exchange or traded on Nasdaq, but nevertheless are publicly
traded and reported on Nasdaq without closing sale prices for the
Shares being customarily quoted, on the basis of the mean between the
closing bid and asked quotations in such other over-the-counter market
as reported by Nasdaq on the date of calculation thereof; but, if
there are no bid and asked quotations in the over-the-counter market
as reported by Nasdaq on that date, then the mean between the closing
bid and asked quotations in the over-the-counter market as reported by
Nasdaq on the immediately preceding day such bid and asked prices were
quoted; and
(iii) if, on the relevant date, the Shares are not publicly traded as
described in Clauses (i) or (ii) above, then on the basis of the good
faith determination of the Committee.
(q) "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 of this Plan, which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.
(r) "Initial Value" means, with respect to a Corresponding SAR, the Option
Price per share of the related Option, and with respect to a SAR granted
independently of an Option, the Fair Market Value of one share of Common Stock
on the date of such grant.
(s) "Insider" means an Employee who is, on the relevant date, an officer
or a director, or a ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act or any successor provision, as "officer" and "director" are defined
under Section 16 of the Exchange Act.
(t) "Named Executive Officer" means a Participant who, as of the date of
vesting and/or payout of an Award, is one of the group of "covered employees,"
as defined in the regulations promulgated under Code Section 162(m) or any
successor statute thereto.
(u) "Non-Employee Director" means a Director of the Company who satisfies
the requirements under Rule 16b-3(b)(3) of the Exchange Act.
(v) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6, and which is not intended to meet the
requirements of Code Section 422.
(w) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(x) "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee. The Option
Price may not be less than the Fair Market Value of a Share on the date the
Option is granted.
(y) "Participant" means an Employee, a Director, or other person who
performs services for the Company or a Subsidiary, who has been determined by
the Committee to contribute significantly to the profits or growth of the
Company and who has been granted an Award under the Plan which is outstanding.
(z) "Performance Share Award" means an Award, which, in accordance with
and subject to an Agreement, will entitle the Participant, or his estate or
beneficiary in the event of the Participant's death, to receive cash, Common
Stock or a combination thereof.
(aa) "Person" has the meaning given to it in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group"
as defined in Section 13(d) thereof.
(bb) "Retirement" means the act of retiring from employment with the
Company or any Subsidiary on or after attaining age 65.
(cc) "Restricted Stock" means an Award of Common Stock granted in
accordance with the terms of Article 8 and the other provisions of the Plan, and
which is nontransferable and subject to a substantial risk of forfeiture.
Shares of Common Stock shall cease to be Restricted Stock when, in accordance
with the terms hereof, federal and state securities laws and regulations, and
the applicable Agreement, they become transferable and free of substantial risk
of forfeiture.
(dd) "SAR" means a stock appreciation right that entitles the holder to
receive, with respect to each share of Common Stock encompassed by the exercise
of such SAR, the amount determined by the Committee and specified in an
Agreement. In the absence of such specification, the holder shall be entitled
to receive in cash, with respect to each share of Common Stock encompassed by
the exercise of such SAR, the excess of the Fair Market Value on the date of
exercise over the Initial Value. References to "SARs" include both
----
Corresponding SARs and SARs granted independently of Options, unless the context
requires otherwise.
(ee) "Securities Laws" means all federal and state laws, statutes,
regulations, rules, pronouncements, court orders, administrative rulings,
administrative actions or "no-actions", self-regulatory governing rules, bylaws
and other requirements, and any other document or instrument which has the power
to dictate or govern the manner in which securities are offered, sold,
distributed, transferred, cancelled or otherwise dealt with in any jurisdiction.
(ff) "Shares" means the shares of Common Stock of the Company (including
any new, additional or different stock or securities resulting from the changes
described in Section 4.3 hereof).
(gg) "Stock Award" means a grant of Shares under Article 8 that is not
generally subject to restrictions (other than those which may be imposed by
applicable Securities Laws), and pursuant to which a certificate for the Shares
is transferred to the Employee.
(hh) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company has a fifty percent (50%) or greater voting
interest.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board that is
granted authority to administer the Plan, with such Committee consisting of not
less than one (1) Director who is a Non-Employee Director. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.
3.2 AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan,
the Committee shall have full power to select the Employees, Directors, and
other persons who perform services for the Company or a Subsidiary, who are
responsible for the future growth and success of the Company who shall
participate in the Plan (who may change from year to year); determine the size
and types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan (including conditions on the exercisability of all or a
part of an Option or SAR, restrictions on transferability and vesting provisions
on Restricted Stock or Performance Share Awards and the duration of the Awards);
construe and interpret the Plan and any agreement or instrument entered into
under the Plan; establish, amend or waive rules and regulations for the Plan's
administration; and (subject to the provisions of Article 14 hereof) amend the
terms and conditions of any outstanding Award to the extent such terms and
conditions are within the discretion of the Committee as provided in the Plan,
including accelerating the time any Option or SAR may be exercised and
establishing different terms and conditions relating to the effect of the
termination of employment or other services to the Company. Further, the
Committee shall make all other determinations which may be necessary or
advisable in the Committee's opinion for the administration of the Plan. All
expenses of administering this Plan shall be borne by the Company.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all Persons,
including the Company, the shareholders, Employees, Participants and their
respective estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant of Awards under the Plan shall
not exceed twenty-seven percent (27%) of the total issued and outstanding shares
as of the date any Award is granted; provided, that the number of Shares
available for grant as ISOs under the Plan shall not exceed an aggregate of
fifteen million (15,000,000) Shares. The Shares may, in the discretion of the
Company, be either authorized but unissued Shares or Shares held as treasury
shares, including Shares purchased by the Company privately or at market.
The following rules shall apply for purposes of the determination of the
number of Shares available for grant under the Plan:
(a) While an Option, SAR, Stock Award, Restricted Stock Award or
Performance Share Award is outstanding, it shall be counted against
the authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option, SAR, Stock Award, Restricted Stock Award
or Performance Share Award shall reduce the Shares available for grant
under the Plan by the number of Shares subject to such Award.
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires or lapses for any reason, or if Shares are withheld in
payment of the Option Price or for withholding taxes, any Shares subject to such
Award or that are withheld shall again be available for the grant of an Award
under the Plan. However, in the event that prior to the Award's cancellation,
termination, expiration or lapse, the holder of the Award at any time received
one or more "benefits of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or interpretation
promulgated under Section 16 of the Exchange Act), the Shares subject to such
Award shall not again be made available for regrant under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under the
Plan, and in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number and the Committee shall make
such adjustments as are necessary to insure Awards of whole Shares.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
Any key Employee of the Company or any Subsidiary, including any such
Employee who is also a director of the Company or any Subsidiary, any
non-employee Director, and any other person who performs services for the
Company or a Subsidiary, whose judgment, initiative and efforts contribute or
may be expected to contribute materially to the successful performance of the
Company or any Subsidiary shall be eligible to receive an Award under the Plan.
In determining the individuals to whom such an Award shall be granted and the
number of Shares which may be granted pursuant to that Award, the Committee
shall take into account the duties of the respective individual, his or her
present and potential contributions to the success of the Company or any
Subsidiary, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee in its sole discretion. The Committee
shall have discretion in determining the number of Shares subject to Options
granted to each Participant, as well as the terms, conditions and requirements
thereof, which need not be the same as to all Participants. An Option may be
granted with or without a Corresponding SAR. No Participant may be granted ISOs
(under the Plan and all other incentive stock option plans of the Company and
any Subsidiary) which are first exercisable in any calendar year for Common
Stock having an aggregate Fair Market Value (determined as of the date an Option
is granted) that exceeds $100,000.00. The preceding annual limit shall not
apply to NQSOs. The Committee may grant a Participant ISOs, NQSOs or a
combination thereof, and may vary such Awards among Participants.
6.2 AGREEMENT. Each Option grant shall be evidenced by an Agreement that
shall specify the Option Price, the duration of the Option, the number of Shares
to which the Option pertains and such other provisions as the Committee shall
determine. The Option Agreement shall further specify whether the Award is
intended to be an ISO or an NQSO. Any portion of an Option that is not
designated as an ISO or otherwise fails or is not qualified (or, after the
issuance thereof but prior to exercise becomes disqualified) as an ISO (even if
designated as an ISO) shall be a NQSO. If the Option is granted in connection
with a Corresponding SAR, the Agreement shall also specify the terms that apply
to the exercise of the Option and Corresponding SAR.
6.3 OPTION PRICE. The Option Price for each grant of an ISO or NQSO shall
not be less than one hundred percent (100%) of the Fair Market Value of a Share
on the date the ISO is granted. In no event, however, shall any Participant
who, at any time would otherwise be granted an Option, owns (within the meaning
of Section 424(d) of the Code) stock of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company be eligible to receive an ISO at an Option Price less than one hundred
ten percent (110%) of the Fair Market Value of a share on the date the ISO is
granted.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
grant; provided, further, however, that any ISO granted to any Participant who
at such time owns (within the meaning of Section 424(d) of the Code) stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, shall be exercisable not later
than the fifth (5th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, including conditions related to
the employment of the Participant with the Company or any Subsidiary, which need
not be the same for each grant or for each Participant. Each Option shall be
exercisable for such number of Shares and at such time or times, including
periodic installments, as may be determined by the Committee at the time of the
grant. The Committee may provide in the Agreement for automatic accelerated
vesting and other rights upon the occurrence of a Change in Control of the
Company. Except as otherwise provided in the Agreement and Article 13, the
right to purchase Shares that are exercisable in periodic installments shall be
cumulative so that when the right to purchase any Shares has accrued, such
Shares or any part thereof may be purchased at any time thereafter until the
expiration or termination of the Option. The exercise or partial exercise of
either an Option or its Corresponding SAR shall result in the termination of the
other to the extent of the number of Shares with respect to which the Option or
Corresponding SAR is exercised.
6.6 PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares. The Option Price upon exercise of any Option shall be payable to
the Company in full, either: (a) in cash, (b) cash equivalent approved by the
Committee, (c) if approved by the Committee, by tendering previously acquired
Shares (or delivering a certification of ownership of such Shares) having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares which are tendered must have been held by the
Participant for six months [if required for accounting purposes] and for the
period required by law, if any, prior to their tender to satisfy the Option
Price), or (d) by a combination of (a), (b) and (c). The Committee also may
allow cashless exercises as permitted under Federal Reserve Board's Regulation
T, subject to applicable securities law restrictions, or by any other means
which the Committee determines to be consistent with the Plan's purpose and
applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s), and may place appropriate
legends on the certificates representing such Shares.
6.7 LIMITED TRANSFERABILITY. If permitted by the Committee in the
Agreement, a Participant may transfer an Option granted hereunder, including but
not limited to transfers to members of his or her Immediate Family (as defined
below), to one or more trusts for the benefit of such Immediate Family members,
or to one or more partnerships where such Immediate Family members are the only
partners, if (i) the Participant does not receive any consideration in any form
whatsoever for such transfer, (ii) such transfer is permitted under applicable
tax laws, and (iii) the Participant is an Insider, such transfer is permitted
under Rule 16b-3 of the Exchange Act as in effect from time to time. Any Option
so transferred shall continue to be subject to the same terms and conditions in
the hands of the transferee as were applicable to said Option immediately prior
to the transfer thereof. Any reference in any such Agreement to the employment
by or performance of services for the Company by the Participant shall continue
to refer to the employment of, or performance by, the transferring Participant.
For purposes hereof,
"Immediate Family" shall mean the Participant and the Participant's spouse,
children and grandchildren. Any Option that is granted pursuant to any
Agreement that did not initially expressly allow the transfer of said Option and
that has not been amended to expressly permit such transfer, shall not be
transferable by the Participant otherwise than by will or by the laws of descent
and distribution and such Option thus shall be exercisable in the Participant's
lifetime only by the Participant.
6.8 SHAREHOLDER RIGHTS. No Participant shall have any rights as a
shareholder with respect to Shares subject to his Option until the issuance of
such Shares to the Participant pursuant to the exercise of such Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANTS OF SARS. The Committee shall designate Participants to whom
SARs are granted, and will specify the number of Shares of Common Stock subject
to each grant. A SAR may be granted with or without a related Option. All SARs
granted under this Plan shall be subject to an Agreement in accordance with the
terms of this Plan. A payment to the Participant upon the exercise of a
Corresponding SAR may not be more than the difference between the Fair Market
Value of the Shares subject to the ISO on the date of grant and the Fair Market
Value of the Shares on the date of exercise of the Corresponding SAR.
7.2 DURATION OF SARS. The duration of a SAR shall be set forth in the
Agreement as determined by the Committee. A SAR that is granted as a
Corresponding SAR shall have the same duration as the Option to which it
relates. Each SAR shall expire at such time as the Committee shall determine at
the time of grant; provided, however, that no SAR shall be exercisable later
than the tenth (10th) anniversary date of its grant; provided, further, however,
that any SAR granted to any Participant who at such time owns (within the
meaning of Section 424(d) of the Code) stock of the Company possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, shall be exercisable not later than the fifth (5th) anniversary
date of its grant. The expiration of a SAR shall be as set forth in this
Section 7.2, regardless of whether the SAR was granted in connection with the
grant of an Option.
7.3 EXERCISE OF SAR. A SAR may be exercised in whole at any time or in
part from time to time and at such times and in compliance with such
requirements as the Committee shall determine as set forth in the Agreement;
provided, however, that a Corresponding SAR that is related to an Incentive
Stock Option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value of the Shares exceeds the Option
Price of the related ISO. A SAR granted under this Plan may be exercised with
respect to any number of shares less than a full number of whole shares for
which the SAR could be exercised. A partial exercise of a SAR shall not affect
the right to exercise the SAR from time to time in accordance with this Plan and
the applicable Agreement with respect to the remaining shares subject to the
SAR. The exercise of either an Option or Corresponding SAR shall result in the
termination of the other to the extent of the number of Shares with respect to
which the Option or its Corresponding SAR is exercised.
7.4 DETERMINATION OF PAYMENT OF CASH AND/OR COMMON STOCK UPON EXERCISE OF
SAR. At the Committee's discretion, the amount payable as a result of the
exercise of a SAR may be settled in cash, Common Stock, or a combination of cash
and Common Stock. A fractional share shall not be deliverable upon the exercise
of a SAR, but a cash payment shall be made in lieu thereof.
7.5 NONTRANSFERABILITY. Each SAR granted under the Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the SAR is granted, the SAR may
be exercised only by the Participant. No right or interest of a Participant in
any SAR shall be liable for, or subject to any lien, obligation or liability of
such Participant. A Corresponding SAR shall be subject to the same restrictions
on transfer as the ISO to which it relates.
Notwithstanding the foregoing, if the Agreement so provides, a Participant
may transfer a SAR (other than a Corresponding SAR that relates to an Incentive
Stock Option) under the same rules and conditions as are set forth in Section
6.7.
7.6 SHAREHOLDER RIGHTS. No Participant shall have any rights as a
shareholder with respect to Shares subject to any SAR until the issuance of
Shares (if any) to the Participant pursuant to the exercise of such SAR.
ARTICLE 8. RESTRICTED STOCK; STOCK AWARDS
8.1 GRANTS. The Committee may from time to time in its discretion grant
Restricted Stock and Stock Awards to Participants and may determine the number
of Shares of Restricted Stock or Stock Awards to be granted. The Committee
shall determine the terms and conditions of, and the amount of payment, if any,
to be made by the Employee for, such Restricted Stock. A grant of Restricted
Stock may, in addition to other conditions, require the Participant to pay for
such Shares of Restricted Stock, but the Committee may establish a price below
Fair Market Value at which the Participant can purchase the Shares of Restricted
Stock. Each grant of Restricted Stock shall be evidenced by an Agreement
containing terms and conditions not inconsistent with the Plan as the Committee
shall determine to be appropriate in its sole discretion.
8.2 RESTRICTED PERIOD; LAPSE OF RESTRICTIONS. At the time a grant of
Restricted Stock is made, the Committee shall establish a period or periods of
time (the "Restricted Period") applicable to such grant which, unless the
Committee otherwise provides, shall not be less than one year. Subject to the
other provisions of this Section 8, at the end of the Restricted Period all
restrictions shall lapse and the Restricted Stock shall vest in the Participant.
At the time a grant is made, the Committee may, in its discretion, prescribe
conditions for the incremental lapse of restrictions during the Restricted
Period and for the lapse or termination of restrictions upon the occurrence of
other conditions in addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the Restricted Stock. Such
conditions may, but need not, include the following:
(a) the death, Disability or Retirement of the Employee to whom
Restricted Stock is granted, or
(b) the occurrence of a Change in Control (as defined in Section
13.1).
The Committee may also, in its discretion, shorten or terminate the
Restricted Period, or waive any conditions for the lapse or termination of
restrictions with respect to all or any portion of the Restricted Stock at any
time after the date the grant is made.
8.3 RIGHTS OF HOLDER; LIMITATIONS THEREON. Upon a grant of Restricted
Stock, a stock certificate (or certificates) representing the number of Shares
of Restricted Stock granted to the Participant shall be registered in the
Participant's name and shall be held in custody by the Company or a bank
selected by the Committee for the Participant's account. Following such
registration, the Participant shall have the rights and privileges of a
shareholder as to such Restricted Stock, including the right to receive
dividends, if and when declared by the Board of Directors, and to vote such
Restricted Stock, except that the right to receive cash dividends shall be the
right to receive such dividends either in cash currently or by payment in
Restricted Stock, as the Committee shall determine, and except further that, the
following restrictions shall apply:
(a) the Participant shall not be entitled to delivery of a certificate
until the expiration or termination of the Restricted Period for the
Shares represented by such certificate and the satisfaction of any and
all other conditions prescribed by the Committee;
(b) none of the Shares of Restricted Stock may be sold, transferred,
assigned, pledged, or otherwise encumbered or disposed of during the
Restricted Period and until the satisfaction of any and all other
conditions prescribed by the Committee; and
(c) all of the Shares of Restricted Stock that have not vested shall
be forfeited and all rights of the Participant to such Shares of
Restricted Stock shall terminate without further obligation on the
part of the Company, unless the Participant has remained an employee
(or non-Employee Director) of the Company or any of its Subsidiaries,
until the expiration or termination of the Restricted Period and the
satisfaction of any and all other conditions prescribed by the
Committee applicable to such Shares of Restricted Stock. Upon the
forfeiture of any shares of Restricted Stock, such forfeited Shares
shall be transferred to the Company without further action by the
Participant and shall, in accordance with Section 4.2, again be
available for grant under the Plan.
With respect to any Shares received as a result of adjustments under
SECTION 4.3 hereof and any Shares received with respect to cash dividends
declared on Restricted Stock, the Participant shall have the same rights and
privileges, and be subject to the same restrictions, as are set forth in this
SECTION 8.
8.4 DELIVERY OF UNRESTRICTED SHARES. Upon the expiration or termination
of the Restricted Period for any Shares of Restricted Stock and the satisfaction
of any and all other conditions prescribed by the Committee, the restrictions
applicable to such Shares of Restricted Stock shall lapse and a stock
certificate for the number of Shares of Restricted Stock with respect to which
the restrictions have lapsed shall be delivered, free of all such restrictions
except any that may be imposed by law, to the holder of the Restricted Stock.
The Company shall not be required to deliver any fractional Shares but will pay,
in lieu thereof, the Fair Market Value (determined as of the date the
restrictions lapse) of such fractional shares to the holders thereof.
Concurrently with the delivery of a certificate for Restricted Stock, the holder
shall be required to pay an amount necessary to satisfy any applicable federal,
state and local tax requirements as set out in ARTICLE 15 below.
8.5 NONASSIGNABILITY OF RESTRICTED STOCK. Unless the Committee provides
otherwise in the Agreement, no grant of, nor any right or interest of a
Participant in or to, any Restricted Stock, or in any instrument evidencing any
grant of Restricted Stock under the Plan, may be assigned, encumbered or
transferred except, in the event of the death of a Participant, by will or the
laws of descent and distribution.
ARTICLE 9. PERFORMANCE SHARE AWARDS
9.1 AWARD. The Committee may designate Participants to whom Performance
Share Awards will be granted from time to time for no consideration and specify
the number of shares of Common Stock covered by the Award. Nothing in this
Article 9 is intended to limit or restrict the imposition by the Committee of
performance criteria upon any Participant as a condition to the receipt of any
other type of award or security granted to such Participant under any other
Section of the Plan.
9.2 EARNING THE AWARD. A Performance Share Award, or portion thereof,
will be earned, and the Participant will be entitled to receive Common Stock, a
cash payment or a combination thereof, only upon the achievement by the
Participant, the Company, or a Subsidiary of such performance objectives as the
Committee, in its discretion, shall prescribe on the date of grant. To the
extent required, the performance objectives applicable to Awards to Named
Executive Officers intended to qualify under Code Section 162(m) shall be
selected from among the following measures: return on equity or assets,
earnings per share, total earnings, earnings growth, return on capital, economic
value added and increase in Fair Market Value of the Shares. The determination
as to whether such objectives have been achieved shall be made by the Committee,
and such determination shall be conclusive; provided, however, that the period
in which such performance is measured shall be at least one year.
9.3 PAYMENT. In the discretion of the Committee, the amount payable when
a Performance Share Award is earned may be settled in cash, by the grant of
Common Stock or a combination of cash and Common Stock. The aggregate Fair
Market Value of the Common Stock received by the Participant pursuant to a
Performance Share Award, together with any cash paid to the Participant, shall
be equal to the aggregate Fair Market Value, on the date the Performance Shares
are earned, of the number of shares of Common Stock equal to each Performance
Share earned. A fractional share will not be deliverable when a Performance
Share Award is earned, but a cash payment will be made in lieu thereof.
9.4 SHAREHOLDER RIGHTS. No Participant shall have, as a result of
receiving a Performance Share Award, any rights as a shareholder until and to
the extent that the Performance Shares are earned and Common Stock is
transferred to such Participant. If the Agreement so provides, a Participant
may receive a cash payment equal to the dividends that would have been payable
with respect to the number of shares of Common Stock covered by the Award
between (a) the date that the Performance Shares are awarded and (b) the date
that a transfer of Common Stock to the Participant, cash settlement, or
combination thereof is made pursuant to the Performance Share Award. A
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of a Performance Share Award or the right to receive Common Stock
thereunder other than by will or the laws of descent and distribution. After a
Performance Share Award is earned and paid in Common Stock, a Participant will
have all the rights of a shareholder with respect to the Common Stock so
awarded.
ARTICLE 10. BENEFICIARY DESIGNATION
To the extent applicable, each Participant under the Plan may, from time to
time, name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of his or
her death before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Company and shall be effective only when filed by
the Participant, in writing, with the Company during the Participant's lifetime.
In the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
If required, the spouse of a married Participant domiciled in a community
property jurisdiction shall join in any designation of a beneficiary or
beneficiaries other than the spouse.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to defer to another plan or program
such Participant's receipt of Shares or cash that would otherwise be due to such
Participant by virtue of the exercise of an Option, the vesting of Restricted
Stock, or the earning of a Performance Share Award. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company or a Subsidiary to terminate any Participant's
employment by, or performance of services for, the Company at any time, nor
confer upon any Participant any right to continue in the employ or service of
the Company or a Subsidiary. For purposes of the Plan, transfer of employment
of a Participant between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.
12.2 PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 13. CHANGE IN CONTROL
13.1 DEFINITION. For purposes of the Plan, a "Change in Control" shall be
deemed to have occurred if:
(a) An acquisition by any Person of Beneficial Ownership of the shares
of Common Stock of the Company then outstanding (the "Company Common
Stock Outstanding") or the voting securities of the Company then
outstanding entitled to vote generally in the election of directors
(the "Company Voting Securities Outstanding"), if such acquisition of
Beneficial Ownership results in the Person beneficially owning (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
twenty-five percent (25%) or more of the Company Common Stock
Outstanding or twenty-five percent (25%) or more of the combined
voting power of the Company Voting Securities Outstanding; provided,
that immediately prior to such acquisition such Person was not a
direct or indirect Beneficial Owner of twenty-five percent (25%) or
more of the Company Common Stock Outstanding or twenty-five percent
(25%) or more of the combined voting power of Company Voting
Securities Outstanding, as the case may be; or
(b) The approval by the shareholders of the Company of a
reorganization, merger, consolidation, complete liquidation or
dissolution of the Company, the sale or disposition of all or
substantially all of the assets of the Company or similar corporate
transaction (in each case referred to in this Section 13 as a
"Corporate Transaction") or, if consummation of such Corporate
Transaction is subject, at the time of such approval by shareholders,
to the consent of any government or governmental agency, the obtaining
of such consent (either explicitly or implicitly); or
(c) A change in the composition of the Board such that the individuals
who, as of the Effective Date, constitute the Board (such Board shall
be hereinafter referred to as the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, for purposes of this Section 13 that any individual who
becomes a member of the Board subsequent to the Effective Date whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent
Board; but, provided, further, that any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, including any
successor to such Rule), or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board,
shall not be so considered as a member of the Incumbent Board.
Notwithstanding the provisions set forth in subsections (a) and (b), the
following shall not constitute a Change in Control for purposes of this Plan:
(1) any acquisition of shares of Common Stock by, or consummation of a
Corporate Transaction with, any Subsidiary or any employee benefit
plan (or related trust) sponsored or maintained by the Company or an
affiliate; or
(2) any acquisition of shares of Common Stock, or consummation of a
Corporate Transaction, following which more than fifty percent (50%)
of, respectively, the shares then outstanding of common stock of the
corporation resulting from such acquisition or Corporate Transaction
and the combined voting power of the voting securities then
outstanding of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were Beneficial Owners, respectively, of the Company
Common Stock Outstanding and Company Voting Securities Outstanding
immediately prior to such acquisition or Corporate Transaction in
substantially the same proportions as their ownership, immediately
prior to such acquisition or Corporate Transaction, of the Company
Common Stock Outstanding and Company Voting Securities Outstanding, as
the case may be.
13.2 LIMITATION OF AWARDS. Notwithstanding any other provisions of the
Plan, if the right to receive or benefit from any Award under this Plan, either
alone or together with payments that a Participant has the right to receive from
the Company or a Subsidiary, would constitute a "parachute payment" (as defined
in Section 280G of the Code), all such payments shall be reduced to the largest
amount that will result in no portion being subject to the excise tax imposed by
Section 4999 of the Code.
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION
14.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board may, at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; provided, that, unless approved by the holders of a majority of the
total number of Shares of the Company represented and voted at a meeting at
which a quorum is present, no amendment shall be made to the Plan if such
amendment would (a) materially modify the eligibility requirements provided in
ARTICLE 5; (b) increase the total number of Shares (except as provided in
Section 4.3) which may be granted under the Plan, as provided in Section 4.1;
(c) extend the term of the Plan; or (d) amend the Plan in any other manner which
the Board, in its discretion, determines should become effective only if
approved by the shareholders even though such shareholder approval is not
expressly required by the Plan or by law.
14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award. The Committee shall, with the written consent of the Participant
holding such Award, have the authority to cancel Awards outstanding and grant
replacement Awards therefor.
14.3 COMPLIANCE WITH CODE SECTION 162(m). At all times when the Committee
determines that compliance with Code Section 162(m) is required or desired, all
Awards granted under this Plan to Named Executive Officers shall comply with the
requirements of Code Section 162(m). In addition, in the event that changes are
made to Code Section 162(m) to permit greater flexibility with respect to any
Award or Awards under the Plan, the Committee may, subject to this Article 14,
make any adjustments it deem appropriate.
ARTICLE 15. WITHHOLDING
15.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising in connection with an Award under this Plan.
15.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, or upon any other taxable event arising as a result of
Awards granted hereunder which are to be paid in the form of Shares,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All elections shall be irrevocable, made in writing, signed by the Participant,
and elections by Insiders shall additionally comply with all legal requirements
applicable to Share transactions by such Participants.
ARTICLE 16. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him in satisfaction of any judgment in
any such action, suit or proceeding against him, provided he shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall be in addition to any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
ARTICLE 17. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 18. LEGAL CONSTRUCTION
18.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
18.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
18.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
18.4 REGULATORY APPROVALS AND LISTING. The Company shall not be required
to issue any certificate or certificates for Shares under the Plan prior to (i)
obtaining any approval from any governmental agency which the Company shall, in
its discretion, determine to be necessary or advisable, (ii) the admission of
such shares to listing on any national securities exchange or Nasdaq on which
the Company's Shares may be listed, and (iii) the completion of any registration
or other qualification of such Shares under any state or federal law or ruling
or regulations of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
Notwithstanding any other provision set forth in the Plan, if required by
the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current Rule 16(a) under the Exchange Act.
18.5 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provisions of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
18.6 GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Nevada.
AS APPROVED BY THE BOARD OF DIRECTORS OF ADSOUTH PARTNERS, INC. ON JANUARY
23, 2004.
ADSOUTH PARTNERS, INC.
By: /s/ John P. Acunto, Jr.
----------------------------
John P. Acunto, Jr.
Chairman of the Board
EXHIBIT C
---------
ADSOUTH PARTNERS, INC.
AMENDED AND RESTATED
MANAGEMENT INCENTIVE PROGRAM
1. ESTABLISHMENT AND EFFECTIVE DATE OF PLAN
Zenith Technology, Inc., a Nevada corporation (hereinafter referred to as
the "Company"), previously established a management incentive award program
known as the Zenith Technology, Inc. Management Incentive Program (the "Plan")
Subsequently, the Company filed an amendment to its Articles of Incorporation
with the Nevada Secretary of State changing its corporate name to Adsouth
Partners, Inc. The Zenith Technology, Inc. Management Incentive Program is
hereby being amended and restated and shall hereafter be known as the "Adsouth,
Inc. Amended and Restated Management Incentive Program" or the "Program", as set
forth in this document.
The Plan shall become effective on the date it is approved by the Board of
Directors (the "Effective Date"), subject to approval of the Plan by the
Company's stockholders within the 12-month period immediately thereafter, and
shall remain in effect, subject to the rights of amendment and termination in
Section 15 of this Program. Payments under the Plan shall only be made to Named
Executive Officers after the Plan is approved by the stockholders of the
Company, unless the Board of Directors determines otherwise.
2. PURPOSE OF THE PLAN
The purpose of the Plan is to reward certain key management personnel of
the Company and its Business Units for achieving performance goals relating to,
among other things, increasing operating income and return on investment,
increasing shareholder value, promoting growth and efficient use of resources
and achieving specific individual goals.
3. DEFINITIONS
(a) "Additional Shares" has the meaning given to it in Section
6(A)(C) hereof.
(b) "Base Annual Salary" means the base salary established for a
Participant during the applicable Plan Year, as determined by the Committee
(which shall include the amount of any pre-tax deferrals or other pre-tax
payments made by the Participant to the Company's deferred compensation or
welfare plans, whether qualified or non-qualified).
(c) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(d) "Business Unit" means a separate business operating unit of the
Company with respect to which separate performance goals may be established
hereunder.
(e) "Change in Control" means any of the following events:
(i) The acquisition (other than from the Company) by any "Person"
(as the term person is used for purposes of Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of twenty percent (20%) or more of the combined
voting power of the Company's then outstanding voting securities; or
(ii) The individuals who, as of the Effective Date, are members
of the Board of Directors (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board of Directors;
provided, however, that if the election, or nomination for election by
the Company's stockholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; or
(iii) Approval by stockholders of the Company of (1) a merger or
consolidation involving the Company if the stockholders of the
Company, immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the then
outstanding voting securities of the corporation resulting from such
merger or consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities of the
Company outstanding immediately before such merger or consolidation,
or (2) a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially
all of the assets of the Company.
Notwithstanding the foregoing, for purposes of subsection (i) above,
"person" shall not include any person who on the date hereof owns 100% or more
of the Company's outstanding securities, and a Change in Control shall not be
deemed to occur solely because twenty percent (20%) or more of the combined
voting power of the Company's then outstanding securities is acquired by (i) a
trustee or other fiduciary holding securities under one or more employee benefit
plans maintained by the Company or any of its subsidiaries, or (ii) any
corporation, which, immediately prior to such acquisition, is owned directly or
indirectly by the stockholders of the Company in the same proportion as their
ownership of stock in the Company immediately prior to such acquisition.
(f) "Chief Executive Officer" means the chief executive officer of the
Company, unless otherwise specified.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the Compensation Committee of the Board of
Directors or any other committee designated by the Board of Directors which is
responsible for administering the Plan.
(i) "Common Stock" means the common stock of the Company, par value
$.0001 per share.
(j) "Company" means Adsouth Partners, Inc., a Nevada corporation, or
any successor thereto as provided in Section 14 hereof.
(k) "Effective Date" has the meaning given to it in Section 1 above.
(l) "Estimated Earnings" means the Company's estimated earnings for
the fiscal year based upon the consensus estimate forecasted by analysts and
market makers for the fiscal year, as adjusted by the Committee in its
discretion.
(m) "Incentive Award" or "Award" means the cash and, if applicable,
Shares or restricted Shares awarded to Participants under the terms of the Plan.
(n) "Maximum Award" means the maximum percentage of Base Annual
Salary which may be paid based upon the Company's or Business Unit's Relative
Performance during the Plan Year.
(o) "Named Executive Officer" means a Participant who as of the date
of payment of an Incentive Award is one of the group of "covered employees"
under Code Section 162(m) and the regulations thereunder.
(p) "Participant" means an executive of the Company, a Business Unit
or an affiliate who is designated by the Committee (or its designee) to
participate in the Plan.
(q) "Personal Performance Goals" means the goals established for each
Participant each year to improve the effectiveness of the Participant's area of
responsibility as well as the Company as a whole.
(r) "Plan Year" means the twelve month period which is the same as
the Company's fiscal year. The initial Plan Year shall be January 1 through
December 31, 2004.
(s) "Program Rules" means the eligible Participants, performance
measures, Incentive Award amounts, and other rules and conditions established
annually by the Committee pursuant to Section 4 of this Program, subject to
ratification by the Board of Directors. The Program Rules for Participants other
than Named Executive Officers may be established by a designee of the Committee.
(t) "Relative Performance" means the extent to which the Company, or
designated Business Unit, as applicable, achieves the performance measurement
criteria set forth in the Program Rules.
(u) "Shares" means the shares of Common Stock of the Company
(including any new, additional or different stock or securities resulting from
the changes described in Section 7 hereof).
(v) "Target Award" means the percentage (which may vary among
Participants and from Plan Year to Plan Year) of Base Annual Salary which will
be paid to a Participant as an Incentive Award if the performance measurement
criteria applicable to the Participant for the Plan Year is achieved, as
reflected in the Program Rules for such Plan Year.
(w) "Threshold Award" means the minimum percentage of Base Annual
Salary which may be paid based on the Company's Relative Performance during the
Plan Year.
4. ADMINISTRATION OF THE PLAN
The Plan will be administered by the Committee; provided, however, the
Committee shall have the right to delegate as it may deem necessary or
appropriate to the Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer or the Chief Financial Officer its authority and
responsibility for administration of parts of the Plan as it applies to
Participants other than Named Executive Officers. Subject to the right of the
Board of Directors to ratify such Program Rules, the Committee (or its designee)
will have the authority, from time to time, to determine the Program Rules for
the following matters:
(a) the executives who are eligible to participate in the Plan;
(b) the types of Awards to grant under the Plan, such as the use of a
performance matrix or bonus pool, which may vary among Participants and from
year to year;
(c) the Target Award, Maximum Award and Threshold Award that can be
granted to each Participant and the method for determining such award, which the
Committee may amend from time to time;
(d) the performance targets and the measurement criteria to be used in
determining the Company's or a Business Unit's Relative Performance, which will
include one or more of the following, as determined by the Committee each year:
operating income, return on investment, Estimated Earnings, net income, earnings
per share, return on equity, return on assets (or net assets), profit before
taxes, market value of the Company's stock, and total shareholder return;
(e) the time or times and the conditions (such as continuing
employment requirements) subject to which any Incentive Award may become
payable; and
(f) the form in which the Award will be paid, such as cash, Shares
or restricted Shares or any combination of the foregoing.
The Program Rules will be adopted by the Committee prior to, or as soon as
practical after, the commencement of each Plan Year. Subject to the provisions
of the Plan and its right to delegate its responsibilities, the Committee will
also have the discretionary authority to interpret the Plan and the Incentive
Awards issued under the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan and the Awards; and to make all other
determinations deemed necessary or advisable in administering the Plan. The
determinations of the Committee on the matters referred to in paragraphs (a)
through (f) of this Section 4 shall be submitted at least annually to the Board
of Directors for its consideration and ratification. For Participants who are
not Named Executive Officers, the Committee may in its discretion establish
performance measures not listed in this Section 4 without obtaining shareholder
approval.
5. PARTICIPATION
Eligibility for participation in the Plan is limited to the Presidents and
certain other executives of the Company's Business Units or affiliates thereof
who hold key management and staff positions. From among those eligible and based
upon the recommendations of the Chairman of the Board and/or the Chief Executive
Officer and other designees, the Committee will designate by name or position
the Participants each Plan Year. Any employee who is a Participant in one Plan
Year may be excluded from participation in any other Plan Year. If, during the
Plan Year, a Participant other than a Named Executive Officer, changes
employment positions to a new position which corresponds to a different award
level, the Committee may, in its discretion adjust the Participant's award level
for such Plan Year. The Committee may, in its discretion, designate employees
who are hired after the beginning of the Plan Year as Participants for such Plan
Year and as eligible to receive full or partial Incentive Awards for such year.
6. INCENTIVE AWARDS
(A) DETERMINATION OF THE AMOUNT OF INCENTIVE AWARDS
As soon as administratively practical after the end of each Plan Year, the
Committee, in its sole discretion, shall determine the extent to which the
performance targets and measurement criteria established pursuant to Section 4
above have been achieved for such Plan Year based upon information prepared by
the Company's Chief Financial Officer. Subject to the right to decrease an award
as described in the next paragraph, the Participant's Incentive Award shall be
computed by the Committee based upon the achievement of the established
performance targets, measurement criteria and the requirements of the Plan. The
Committee, in determining whether performance targets have been met, may adjust
the Company's financial results to exclude the effect of unusual charges or
income items or other events, including acquisitions or dispositions of
businesses or assets, restructurings, reductions in force, currency fluctuations
or changes in accounting, which are distortive of financial results (either on a
segment or consolidated basis); provided, that for purposes of determining the
Incentive Awards of Named Executive Officers, the Committee shall exclude
unusual items whose exclusion has the effect of increasing income, earnings, or
other measurements if such items constitute "extraordinary items" under
generally accepted accounting principles or are significant unusual items. In
addition, the Committee will adjust its calculations to exclude the effect on
financial results of changes in the Code or other tax laws, or the regulations
relating thereto.
The Committee may, in its sole discretion, decrease the amount of a
Participant's Incentive Award for a Plan Year based upon such factors as it may
determine, including the failure of the Company or a Business Unit to meet
certain performance goals or of a Participant to meet his Personal Performance
Goals. The factors to be used in reducing an Incentive Award may be established
at the beginning of a Plan Year and may vary among Participants.
In the event that the Company's or a Business Unit's performance is below
the performance thresholds for the Plan Year and the Incentive Awards are
reduced or canceled, the Committee may in its discretion grant Incentive Awards
to deserving Participants, except for Participants who are Named Executive
Officers.
The Program Rules and Incentive Awards under the Plan shall be administered
in a manner to qualify payments under the Plan to the Named Executive Officers
for the performance based exception under Code Section 162(m) and the
regulations thereunder, except where the Board of Directors determines such
compliance is not necessary or desirable. The maximum Incentive Award that may
be paid to an individual Participant for a Plan Year shall not exceed $1.0
million.
(B) ELIGIBILITY FOR PAYMENT OF INCENTIVE AWARD
No Participant will have any vested right to receive any Incentive Award
until such date as the Board of Directors has ratified the Committee's (or its
designee's) recommendation with respect to the payment of individual Incentive
Awards, except where the Committee determines such ratification is not
necessary. No Incentive Award will be paid to any Participant who is not an
active employee of the Company or an affiliate on the date the Board of
Directors has ratified the payment of such Incentive Awards; provided, however,
at the discretion of the Committee or its designee (subject to ratification by
the Board of Directors, where required), a partial Incentive Award may be
authorized by the Committee to be paid to Participants (or their beneficiaries)
who are terminated by the Company without cause or who retire, die or become
permanently and totally disabled during the Plan Year or prior to payment of the
Incentive Award. No Participant entitled to receive an Incentive Award shall
have any interest in any specific asset of the Company, and such Participant's
rights shall be equivalent to that of a general unsecured creditor of the
Company.
(C) PAYMENTS OF AWARDS
The Awards will be payable in cash, provided that the Committee shall have
the authority to provide in the Program Rules that all or a portion of the Award
will be paid in Shares and/or that the Participant may elect to receive all or a
portion of his Award in Shares. For this purpose, the Shares will be valued at
the closing price of the Shares on the primary securities exchange on which they
are traded on the last trading day of the fiscal year, unless the Committee
provides otherwise. The Committee may elect to place transferability, vesting
and resale restrictions on the Shares.
The Committee may also provide in the Program Rules that if the Participant
elects to receive a portion of the Award in Shares, the Participant will receive
an additional number of Shares ("Additional Shares") equal to a certain
percentage (not to exceed 100%) of the number of Shares received by reason of
his election, plus an additional cash bonus equal to the fair market value
(determined as of the last trading day of the fiscal year) of the Additional
Shares received multiplied by a percentage amount to help offset income tax
liability. The Committee may elect to place restrictions, such as a vesting
schedule related to continuing employment, transferability, and resale
restrictions, on the Additional Shares. Subject to adjustment as provided in
Section 7, the maximum number of Shares available for grant under the Program
shall not exceed an aggregate of twenty five million (25,000,000) Shares, unless
and until such amount is increased in accordance with the program.
Payment of the Awards shall be made within ninety (90) days after the close
of the Company's fiscal year, or such other period as may be specified by the
Committee in the Program Rules.
7. RECAPITALIZATION OF THE COMPANY
In the event of a recapitalization of the Company or its merger into or
consolidation with another corporation, a Participant shall be entitled to
receive such securities which he or she would have been entitled to receive had
he or she been a shareholder of the Company holding Shares pursuant to the Plan
at the time of such recapitalization, merger or consolidation. In the event of a
stock split, stock dividend or combination of shares with respect to the Common
Stock of the Company after the determination of the number of Shares to which a
Participant is entitled but before delivery of such Shares to the Participant,
then the number of Shares that such Participant shall be entitled to receive
shall be proportionately adjusted.
8. INVESTMENT REPRESENTATION AND RESTRICTIONS ON THE STOCK
Any Shares to be issued to a Participant pursuant to the Plan may be
unregistered and, at the option of the Company, the Participant may be required
to execute an investment letter in form satisfactory to the Company. The Shares
shall bear a legend reflecting the investment representation and the
unregistered status of the Shares.
9. CHANGE IN CONTROL
The Committee may provide in the Program Rules or in the Award agreement
that upon the occurrence of a Change in Control, the Participant's Incentive
Award for the Plan Year, determined at the Target Award level (without any
reductions under Section 6(a)) shall be deemed to have been fully earned for the
Plan Year. The Committee may also provide that the Participant shall only be
entitled to a pro rata portion of his Incentive Award based upon the number of
days within the Plan Year that had elapsed as of the effective date of the
Change in Control. The Award agreement may also provide for accelerated payments
of Incentive Awards upon the occurrence of a Change in Control.
10. DEFERRAL
The Committee may permit a Participant to defer to another plan or program
such Participant's receipt of Shares or cash that would otherwise be due to such
Participant by virtue of earning an Award under this Plan. If any such deferral
election is required or permitted, the Committee shall, in its discretion,
establish rules and procedures for such payment deferral.
11. BENEFICIARY
Each Participant will designate a person or persons to receive, in the
event of death, any Incentive Award to which he or she would then be entitled
under Section 6(b). Such designation will be made in the manner determined by
the Committee and may be revoked by the Participant in writing. If a Participant
fails effectively to designate a beneficiary, then his or her estate will be
deemed to be the beneficiary.
12. WITHHOLDING OF TAXES
The Company shall deduct from each Incentive Award the amount of any taxes
required to be withheld by any governmental authority.
13. EMPLOYMENT
Nothing in the Plan or in any Incentive Award shall confer (or be deemed to
confer) upon any Participant the right to continue in the employ of the Company,
a Business Unit or an affiliate, or interfere with or restrict in any way the
rights of the Company, a Business Unit or an affiliate to discharge any
Participant at any time for any reason whatsoever, with or without cause.
14. SUCCESSORS
All obligations of the Company under the Plan with respect to Incentive
Awards granted hereunder shall be binding upon any successor to the Company,
whether such successor is the result of an acquisition of stock or assets of the
Company, a merger, a consolidation or otherwise.
15. TERMINATION AND AMENDMENT OF THE PLAN; GOVERNING LAW
The Committee, subject to the ratification rights of the Board of
Directors, has the right to suspend or terminate the Plan at any time, or to
amend the Plan in any respect, provided that no such action will, without the
consent of a Participant, adversely affect his or her rights under an Incentive
Award approved under Section 6(b).
The Plan shall be interpreted and construed under the laws of the State of
California.
The Plan is intended to comply with Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, and the Committee shall interpret
and administer the provisions of the Plan and any Award agreement in a manner
consistent therewith. Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan.
In the event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award under the Plan, the Committee may, subject
to this Section 15, make any adjustments it deems appropriate in such Award.
AS APPROVED BY THE BOARD OF DIRECTORS OF ADSOUTH PARTNERS, INC. ON FEBRUARY
27, 2004.
ADSOUTH PARTNERS, INC.
By: /s/ John P. Acunto, Jr.
--------------------------------
John P. Acunto, Jr.
Chairman of the Board