As filed with the Securities and Exchange Commission on May 28, 1998
Registration No. 333-5530
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
GENETIC VECTORS, INC.
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA
(State or Other Jurisdiction of Incorporation or Organization)
65-0324710
(I.R.S. Employer Identification No.)
5201 N.W. 77TH AVENUE, SUITE 100
MIAMI, FLORIDA 33166
(Address of Principal Executive Offices)
GENETIC VECTORS, INC. 1996 INCENTIVE PLAN
JAMES A. JOYCE CONSULTING AGREEMENT
(Full Title of the Plan)
MEAD M. MCCABE, JR.
5201 N.W. 77TH AVENUE, SUITE 100
MIAMI, FLORIDA 33166
(Name and Address of Agent For Service)
(305) 716-0000
(Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Clayton E. Parker, Esq.
Kirkpatrick & Lockhart LLP
201 South Biscayne Boulevard, 20th Floor
Miami, Florida 33131
CALCULATION OF REGISTRATION FEE
-------------------------------
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
Proposed Proposed
Title Of Maximum Maximum
Securities Amount Offering Aggregate Amount Of
To Be To Be Price Per Offering Registration
Registered Registered Share (1)(2) Price (1)(2) Fee (1)(2)
- -------------------------------------------------------------------------------------------------------------------
Common Stock, $0.001 375,000 shares $9.3125 $3,492,187.50 $1,030.20
par value per share
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, options to purchase or acquire the shares of
Common Stock covered by the Prospectus.
(2) Pursuant to Rule 457(h)(1) of the Securities Exchange Act of 1934, the
proposed maximum offering price per share, proposed maximum aggregate
offering price and amount of registration fee were computed based upon the
average of the bid and ask price of the shares of Common Stock on
May 26, 1998.
<PAGE>
PART I
------
INFORMATION REQUIRED IN THIS
SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
employees as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Act"). Such documents need not be filed with the Securities and
Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents,
which include the statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Act.
PART II
-------
INFORMATION REQUIRED IN THIS
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The following documents have been previously filed by Genetic Vectors,
Inc. (the "Company") with the Securities and Exchange Commission and are hereby
incorporated by reference into this Registration Statement as of their
respective dates:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by the registrant document referred to in (a) above.
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A as filed with the Securities and Exchange
Commission on November 15, 1996, as amended, pursuant to the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company with the Securities and
Exchange Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, after the date of this Registration
Statement, but prior to the filing of a post-effective amendment to this
Registration Statement that indicates that all securities offered by this
Registration Statement have been sold or which deregisters all such securities
then remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement. Each document incorporated by reference into this
Registration Statement shall be deemed to be a part of this Registration
Statement from the date of the filing of such document with the Securities and
Exchange Commission until the information contained therein is superseded or
updated by any subsequently filed document that is incorporated by reference
into this Registration Statement or by any document that constitutes part of the
prospectus relating to the Genetic Vectors, Inc. 1996 Incentive Plan or the
James A. Joyce Consulting Agreement that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
Not Applicable
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
The Florida Business Corporation Act ("FBCA") provides that in certain
cases, each officer and director of the Company shall be indemnified by the
Company against certain costs, expenses and liabilities which he or she may
incur in his or her capacity as such. FBCA ss. 607.0850 ("Indemnification of
officers, directors, employees and agents") provides:
(1) A corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or
is a party to any proceeding by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsection (1) or subsection (2), or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in which
directors who are parties may participate) consisting solely of two or more
directors not at the time parties to the proceeding;
(c) By independent legal counsel;
1. Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
2. If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designated under paragraph (b),
selected by majority vote of the full board of directors (in which directors who
are parties may participate); or
3
<PAGE>
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such proceeding or, if no
such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and a corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee,
or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of ss. 607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person, unless otherwise provided when authorized or ratified.
(9) Unless the corporation's articles of incorporation provide
otherwise, notwithstanding the failure of a corporation to provide
indemnification, and despite any contrary determination of the board or of the
shareholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case the court shall
also order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the exercise
by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether such person met
4
<PAGE>
the standard of conduct set forth in subsection (1), subsection (2), or
subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(11) For purposes of this section;
(a) The term "other enterprises" includes employee benefit
plans;
(b) The term "expenses" includes counsel fees, including those
for appeal;
(c) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation"
includes any service as a director, officer, employee, or agent of the
corporation that imposes duties on such persons, including duties relating to an
employee benefit plan and its participants or benefices; and
(g) The term "not opposed to the best interest of the
corporation" describes the actions of a person who acts in good faith and in a
manner he reasonably believes to be in the best interests of the participants
and beneficiaries of an employee benefit plan.
(12) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
The Company maintains an insurance policy that provides protection,
within the maximum liability limits of the policy and subject to a deductible
amount for each claim, to the Company under its indemnification obligations and
to the directors and officers of the Company with respect to certain matters
that are not covered by the Company's indemnification obligations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not applicable.
5
<PAGE>
ITEM 8. EXHIBITS.
--------
EXHIBIT NO. DESCRIPTION LOCATION
---------- ----------- --------
4.1 Genetic Vectors, Inc. 1996 Provided herewith
Incentive Plan
4.2 Consulting Agreement, dated June Provided herewith
1996, by and between the
Company and James A. Joyce
5.1 Opinion of Kirkpatrick & Provided herewith
Lockhart LLP re: legality
23.1 Consent of Kirkpatrick & Provided herewith
Lockhart LLP (contained in
Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP Provided herewith
24.1 Power of Attorney Provided herewith
ITEM 9. UNDERTAKINGS.
------------
(a) The undersigned registrant will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Act;
(ii) Reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii)Include any additional or changed material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) For purposes of determining any liability under the Securities Act,
treat each post-effective amendment as a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Miami, State of Florida on this 27th day of
May, 1998.
GENETIC VECTORS, INC.
By: /s/ Mead M. McCabe, Jr.
--------------------------------------
Printed Name: Mead M. McCabe, Jr.
Title: President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mead M. McCabe, Jr. his true and lawful
attorney-in-fact and agent, with full power of substitution and revocation, for
him and in his name, place and stead, in any and all capacities (until revoked
in writing), to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully for all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, which together constitute a majority of the board of
directors of the Company.
Date: May 27, 1998 By: /s/ Mead M. McCabe, Sr., Ph.D.
-------------------------------------------
Printed Name: Mead M. McCabe, Sr., Ph.D.
Title: Chairman of the Board of Directors
(Principal Executive Officer)
Date: May 27, 1998 By: /s/ Mead M. McCabe, Jr.
-------------------------------------------
Printed Name: Mead M. McCabe, Jr.
Title: President and Director (Principal
Financial and Accounting Officer)
Date: May 27, 1998 By: /s/ Jack Fell, Ph.D.
-------------------------------------------
Printed Name: Jack Fell, Ph.D.
Title: Director
Date: May 27, 1998 By: /s/ Mark E. Burroughs
-------------------------------------------
Printed Name: Mark E. Burroughs
Title: Director
Date: May 27, 1998 By: /s/ James A. Joyce
-------------------------------------------
Printed Name: James A. Joyce
Title: Director
Date: May 27, 1998 By: /s/ Allyn Golub, Ph.D
-------------------------------------------
Printed Name: Allyn Golub, Ph.D.
Title: Director
Date: May 27, 1998 By: /s/ Michael C. Foley
-------------------------------------------
Printed Name: Michael C. Foley
Title: Director
7
<PAGE>
EXHIBIT LIST
------------
EXHIBIT NO. DESCRIPTION LOCATION
- ---------- ----------- --------
4.1 Genetic Vectors, Inc. 1996 Incentive Provided herewith
Plan
4.2 Consulting Agreement, dated June 1996, Provided herewith
by and between the Company and James
A. Joyce
5.1 Opinion of Kirkpatrick & Lockhart LLP Provided herewith
re: Legality
23.1 Consent of Kirkpatrick & Lockhart LLP Provided herewith
(contained in
Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP Provided herewith
24.1 Power of Attorney Provided herewith
8
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mead M. McCabe, Jr. his true and lawful
attorney-in-fact and agent, with full power of substitution and revocation, for
him and in his name, place and stead, in any and all capacities (until revoked
in writing), to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully for all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
9
EXHIBIT 4.1
-----------
GENETIC VECTORS, INC.
1996 INCENTIVE PLAN
ARTICLE 1
PURPOSE AND ADOPTION OF THE PLAN
1.1 PURPOSE. The purpose of the Genetic Vectors, Inc. 1996 Incentive
Plan (the "PLAN") is to increase the proprietary and vested interest of the
Non-Employee Directors of Genetic Vectors, Inc. in the growth and performance of
Genetic Vectors, Inc., to assist in attracting and retaining highly competent
employees, to act as an incentive in motivating selected officers and other key
employees of Genetic Vectors, Inc. and its Subsidiaries, to achieve long-term
corporate objectives and to enable cash incentive awards to qualify as
performance-based for purposes of the tax deduction limitations under Section
162(m) of the Code.
1.2 ADOPTION AND TERM. The Plan has been approved by the Board of
Directors of Genetic Vectors, Inc., to be effective as of
___________________________ (the "EFFECTIVE DATE"); PROVIDED, HOWEVER, that no
Incentive Stock Option may be granted hereunder unless and until the Plan has
been approved by the shareholders of the Company within 12 months before or
after the date the Plan is adopted by the Board. The Plan shall remain in effect
until terminated by action of the Board; PROVIDED, HOWEVER, that no Incentive
Stock Option may be granted hereunder after the tenth anniversary of the
Effective Date and the provisions of Articles 7, 8, 9 and 10 with respect to
performance-based awards to "covered employees" under Section 162(m) of the Code
(as defined herein) shall expire as of the fifth anniversary of the Effective
Date.
ARTICLE 2
DEFINITIONS
For the purpose of this Plan, capitalized terms shall have the
following meanings:
2.1 AWARD means any one or a combination of Non-Qualified Stock Options
or Incentive Stock Options described in Article 6, Stock Appreciation Rights
described in Article 6, Restricted Shares described in Article 7, Performance
Awards described in Article 8, Awards of cash or any other Award made under the
terms of the Plan.
2.2 AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.
2.3 AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.4 BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
-1-
<PAGE>
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.
2.5 BOARD means the full Board of Directors of the Company.
2.6 CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
a. The acquisition in one or more transactions, other than
from the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of Company Voting Securities in excess of 15% of the Company Voting
Securities unless such acquisition has been approved by the Board;
b. Any election of persons to the Board that causes majority
of the Board to consist of persons other than (i) persons who were members of
the Board on the Effective Date and (ii) persons who were nominated for
elections as members of the Board at a time when a majority of the Board
consisted of persons who were members of the Board on the Effective Date;
PROVIDED, HOWEVER, that any person nominated for election by a Board at least a
majority of whom constituted persons described in clauses (i) and/or (ii) or by
persons who were themselves nominated by such Board shall, for this purpose, be
deemed to have been nominated by a Board composed of persons described in clause
(i);
c. Approval by the shareholders of the Company of a
reorganization, merger or consolidation, unless, following such reorganization,
merger or consolidation, all or substantially all of the individuals and
entities who were the respective beneficial owners of the Outstanding Common
Stock and Company Voting Securities immediately prior to such reorganization,
merger or consolidation, following such reorganization, merger or consolidation
beneficially own, directly or indirectly, more than 80% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors or trustees, as the case may be, of the entity resulting from such
reorganization, merger or consolidation in substantially the same proportion as
their ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation, as the case
may be; or
d. Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) a sale or other
disposition of all or substantially all the assets of the Company.
2.7 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes such section.
2.8 COMMITTEE means a compensation committee of the Board which shall
be comprised of 2 or more members, all of which shall be Outside/Non-Employee
Directors.
2.9 COMPANY means Genetic Vectors, Inc., a Florida corporation, and its
successors.
2.10 COMMON STOCK means Common Stock of the Company, par value $.001
per share.
-2-
<PAGE>
2.11 COMPANY VOTING SECURITIES means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.
2.12 DATE OF GRANT means the date designated by the Plan Administrator
as the date as of which it grants an Award, which shall not be earlier than the
date on which the Plan Administrator approves the granting of such Award.
2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.14 EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Plan Administrator in the Award Agreement which is
to be subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.2.b.
2.15 FAIR MARKET VALUE means, on any date, the average of the high and
low quoted sales prices of a share of Common Stock, as reported on the Nasdaq
SmallCap Market or any national securities exchange on which the Common Stock is
then listed, as published in the Wall Street Journal or any other newspaper of
general circulation, on such date or, if there were no sales on such date, on
the last date preceding such date on which a sale was reported. If the Common
Stock is not listed on the Nasdaq SmallCap Market or a national securities
exchange, then Fair Market Value shall be determined in good faith by the Plan
Administrator without regard to any restriction other than a restriction which
by its terms will never lapse.
2.16 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.17 MERGER means any merger, reorganization, consolidation, exchange,
transfer of assets or other transaction having similar effect involving the
Company.
2.18 NON-EMPLOYEE DIRECTOR means a member of the Board who i) is not
currently an officer or otherwise employed by the Company or a parent or a
subsidiary of the Company, ii) does not receive compensation directly or
indirectly from the Company or a parent or a subsidiary of the Company for
services rendered as a consultant or in any capacity other than as a director,
except for an amount for which disclosure would not be required pursuant to Item
404(a) of Regulation S-K, iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K, and iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K.
2.19 NON-EMPLOYEE DIRECTOR OPTION means a stock option granted to a
Non-Employee Director in accordance with Section 6.1.a.
2.20 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.21 OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.22 OUTSIDE DIRECTOR means a member of the Board who qualifies as an
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"outside director" for purposes of Section 162(m) of the Code.
2.23 OUTSIDE/NON-EMPLOYEE DIRECTOR means a member of the Board who
qualifies as both an Outside Director and a Non-Employee Director.
2.24 OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.25 PARTICIPANT means a person designated to receive an Award under
the Plan in accordance with Article 5.
2.26 PERFORMANCE AWARDS means Awards granted in accordance with Article
8.
2.27 PLAN means the Genetic Vectors, Inc. 1996 Incentive Plan as
described herein, as the same may be amended from time to time.
2.28 PLAN ADMINISTRATOR means either the Board or such committees,
officers and/or employees of the Company that may be so designated under Article
3.
2.29 PURCHASE PRICE, with respect to Options, shall have the meaning
set forth in Section 6.1.b.
2.30 RESTORATION OPTION means a Non-Qualified Stock Option granted
pursuant to Section 6.1.f.
2.31 RESTRICTED SHARES means Common Stock subject to restrictions
imposed in connection with Awards granted under Article 7.
2.32 RETIREMENT means early or normal retirement under a pension plan
or arrangement of the Company or one of its Subsidiaries in which the
Participant participates.
2.33 RULE 16B-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.
2.34 STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article 6.
2.35 SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code
2.36 TEN PERCENT HOLDER means any person who owns (within the meaning
of Section 424(d) of the Code) more than 10 percent of the total combined voting
power of all classes of stock of the Company and its Subsidiaries.
2.37 TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment or service as a director of the
Company or a Subsidiary for any reason, including death, disability, retirement
or as the result of the divestiture of the Participant's employer or any similar
transaction in which the Participant's employer ceases to be the Company or one
of its Subsidiaries. Whether entering military or other government service shall
constitute Termination of Employment, or whether a Termination of Employment
shall occur as a result of disability, shall be determined in each case by the
Plan Administrator in its sole discretion.
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ARTICLE 3
ADMINISTRATION
3.1 PLAN ADMINISTRATOR; SCOPE; AUTHORITY. The Plan shall be
administered by the Plan Administrator. The Plan Administrator shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Plan Administrator shall
have the sole discretionary authority to interpret the Plan, to establish and
modify administrative rules for the Plan, to impose such conditions and
restrictions on Awards as it determines appropriate, to cancel Awards (including
those made pursuant to other plans of the Company) and to substitute new Options
for previously awarded Options which, at the time of such substitution, have an
exercise price in excess of the Fair Market Value of the underlying Common Stock
(including options granted under other incentive compensation programs of the
Company) with the consent of the recipient, and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable. The Plan Administrator shall not, however, have or exercise any
discretion that would disqualify amounts payable under Articles 8 or 10 as
performance-based compensation for purposes of Section 162(m) of the Code.
3.2 DELEGATION OF AUTHORITY. The Plan Administrator may, in the case of
performance-based awards to "covered employees" within the meaning of Section
162(m) of the Code, delegate such of its powers and authority under the Plan as
it deems appropriate to the Committee and, in the case of Awards to Participants
who are not subject to Section 16(b) of the Exchange Act, delegate such of its
powers and authority under the Plan as it deems appropriate to designated
officers or employees of the Company. In the event of any such delegation of
authority, references in the Plan to the Plan Administrator shall be deemed to
refer to the delegate of the Plan Administrator.
ARTICLE 4
SHARES
4.1 NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan shall be 300,000 shares of Common Stock.
The number of shares available for issuance under the Plan shall be further
subject to adjustment in accordance with Section 11.7. The shares to be offered
under the Plan shall be authorized and unissued Common Stock, or issued Common
Stock which shall have been reacquired by the Company.
4.2 SHARES SUBJECT TO TERMINATED AWARDS. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article 6, Common Stock forfeited as provided in Section 7.2.a. and Common
Stock subject to any Awards which are otherwise surrendered by the Participant
may again be subject to new Awards under the Plan. Common Stock subject to
Options, or portions thereof, which have been surrendered in connection with the
exercise of Stock Appreciation Rights shall not be available for subsequent
Awards under the Plan, but Common Stock issued in payment of such Stock
Appreciation Rights shall not be charged against the number of shares of Common
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Stock available for the grant of Awards hereunder.
ARTICLE 5
PARTICIPATION
5.1 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
officers and other key employees of the Company and its Subsidiaries, whether or
not members of the Board, as the Plan Administrator, in its sole discretion, may
designate from time to time. In addition, Participants in the Plan shall include
such Non-Employee Directors as are granted Options under Section 6.1.a. The Plan
Administrator's designation of a Participant in any year shall not require the
Plan Administrator to designate such person to receive Awards or grants in any
other year. The designation of a Participant to receive awards or grants under
one portion of the Plan does not require the Plan Administrator to include such
Participant under other portions of the Plan. The Plan Administrator shall
consider such factors as it deems pertinent in selecting Participants and in
determining the type and amount of their respective Awards. Notwithstanding any
provision herein to the contrary, the Plan Administrator may grant Awards under
the Plan, other than Incentive Stock Options, to non-employees who, in the
judgment of the Plan Administrator, render significant services to the Company
or any of its Subsidiaries, on such terms and conditions as the Plan
Administrator deems appropriate and consistent with the intent of the Plan.
Subject to adjustment in accordance with Section 11.7, during the term of this
Plan, no Participant shall be granted Awards in respect of more than 100,000
shares of Common Stock (whether through grants of Options or Stock Appreciation
Rights or other grants of Common Stock or rights with respect thereto) and
$3,000,000 in cash in any calendar year.
ARTICLE 6
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.1 OPTION AWARDS.
a. GRANTS. The Plan Administrator may grant, to such
Participants as the Plan Administrator may select, Options entitling such
Participants to purchase shares of Common Stock from the Company in such number,
at such price, and on such terms and subject to such conditions, not
inconsistent with the terms of this Plan, as may be established by the Plan
Administrator. In addition, the Plan Administrator shall grant, to each director
who is a Non-Employee Director on the Effective Date and to each person who is
elected, appointed or otherwise becomes a Non-Employee Director after the
Effective Date, Non-Qualified Stock Options entitling such Non-Employee
Directors to purchase 5,000 shares of Common Stock from the Company as of the
Effective Date or, in the case of a person who is elected, appointed or
otherwise becomes a Non-Employee Director after the Effective Date, on the date
in which such person is elected, appointed or otherwise becomes a Non-Employee
Director, at such price, and on such terms and subject to such conditions, not
inconsistent with the terms of this Plan, as may be established by the Plan
Administrator. The Plan Administrator shall also grant, to each Non-Employee
Director on each 5th year anniversary (i.e., the 5th anniversary, the 10th
anniversary, the 15th anniversary, etc.) of the date of such Non-Employee
Director's initial grant pursuant to this Section 6.1.a., Non-Qualified Stock
Options entitling such Non-Employee Director to purchase 5,000 shares of Common
Stock from the Company at such price, and on such terms and subject to such
conditions, not inconsistent with the terms of this Plan, as may be established
by the Plan Administrator, PROVIDED THAT such Non-Employee Director is
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continuing in office after such anniversary date. Except as otherwise provided
in Sections 6.3.c. and 6.5, Non-Employee Director Options shall not be
exercisable prior to the first anniversary of the Date of Grant, at which time
they will be immediately exercisable, in whole or in part. The terms of any
Option granted under this Plan shall be set forth in an Award Agreement.
b. PURCHASE PRICE OF OPTIONS. The Purchase Price of each share
of Common Stock which may be purchased upon exercise of any Option granted under
the Plan shall be determined by the Plan Administrator; PROVIDED, HOWEVER, that
i) the Purchase Price of the Common Stock purchased pursuant to Options
designated by the Plan Administrator as Incentive Stock Options shall be equal
to or greater than the Fair Market Value of the Common Stock on the Date of
Grant as required under Section 422 of the Code and, in the case of Options
granted to Ten Percent Holders and designated by the Plan Administrator as
Incentive Stock Options, the Purchase Price of the Common Stock purchased
pursuant to such Options shall be equal to or greater than 110% of the Fair
Market Value of the Common Stock on the Date of Grant as required under Section
422 of the Code, and ii) the Purchase Price of the Common Stock purchased
pursuant to Non-Employee Director Options shall be equal to or greater than the
Fair Market Value of the Common Stock on the Date of Grant.
c. DESIGNATION OF OPTIONS. Except as otherwise expressly
provided in the Plan, the Plan Administrator may designate, at the time of the
grant of each Option, the Option as an Incentive Stock Option or a Non-Qualified
Stock Option.
d. INCENTIVE STOCK OPTION SHARE LIMITATION. To the extent that
the aggregate Fair Market Value of Common Stock with respect to which Incentive
Stock Options (determined without regard to this Section 6.1.d.) are exercisable
for the 1st time by any Participant during any calendar year (under all plans of
the Company and its Subsidiaries) exceeds $100,000, such options shall be
treated as options which are not Incentive stock Options.
e. RIGHTS AS A SHAREHOLDER. A Participant or a transferee of
an Option pursuant to Section 11.4 shall have no rights as a shareholder with
respect to Common Stock covered by an Option until the Participant or transferee
shall have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distributions or other
rights with respect to any such Common Stock for which the record date is prior
to the date on which the Participant or a transferee of the Option shall have
become the holder of record of any such shares covered by the Option; PROVIDED,
HOWEVER, that such Participants are entitled to share adjustments to reflect
capital changes under Section 11.7.
f. RESTORATION OPTIONS UPON THE EXERCISE OF A NON-QUALIFIED
STOCK OPTION. In the event that any Participant delivers to the Company, or has
withheld from the shares otherwise issuable upon the exercise of a Non-Qualified
Stock Option, shares of Common Stock in payment of the Purchase Price of any
Non-Qualified Stock Option granted hereunder in accordance with Section 6.4, the
Plan Administrator shall have the authority to grant or provide for the
automatic grant of a Restoration Option to such Participant. The grant of a
Restoration Option shall be subject to the satisfaction of such conditions or
criteria as the Plan Administrator in its sole discretion shall establish from
time to time. A Restoration Option shall entitle the holder thereof to purchase
a number of shares of Common Stock equal to the number of such shares so
delivered or withheld upon exercise of the original Option and, in the
discretion of the Plan Administrator, the number of shares, if any, delivered to
or withheld by the Corporation to satisfy any withholding tax liability arising
in connection with the exercise of the original Option. A Restoration Option
shall have a per share Purchase Price of not less than 100% of the per share
Fair Market Value of the Common Stock on the date of grant of such Restoration
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Option, a term not longer than the remaining term of the original Option at the
time of exercise thereof, and such other terms and conditions as the Plan
Administrator in its sole discretion shall determine.
6.2 STOCK APPRECIATION RIGHTS.
a. STOCK APPRECIATION RIGHT AWARDS. The Plan Administrator is
authorized to grant to any Participant one or more Stock Appreciation Rights.
Such Stock Appreciation Rights may be granted either independent of, or in
tandem with, Options granted to the same Participant. Stock Appreciation Rights
granted in tandem with Options may be granted simultaneously with, or, in the
case of Non-Qualified Stock Options, subsequent to, the grant to such
Participant of the related Option; PROVIDED, HOWEVER, that: (i) any Option
covering any share of Common Stock shall expire and not be exercisable upon the
exercise of any Stock Appreciation Right with respect to the same share, (ii)
any Stock Appreciation Right covering any share of Common Stock shall expire and
not be exercisable upon the exercise of any related Option with respect to the
same share, and (iii) any Option and Stock Appreciation Right covering the same
share of Common Stock may not be exercised simultaneously. Upon exercise of a
Stock Appreciation Right with respect to a share of Common Stock, the
Participant shall be entitled to receive an amount equal to the excess, if any,
of (A) the Fair Market Value of a share of Common Stock on the date of exercise
over (B) the Exercise Price of such Stock Appreciation Right established in the
Award Agreement, which amount shall be payable as provided in Section 6.2.c.
b. EXERCISE PRICE. The Exercise Price established under any
Stock Appreciation Right granted under this Plan shall be determined by the Plan
Administrator, but in the case of Stock Appreciation Rights granted in tandem
with Options shall not be less than the Purchase Price of the related Option.
Upon exercise of Stock Appreciation Rights, the number of shares subject to
exercise under any related Option shall automatically be reduced by the number
of shares of Common Stock represented by the Option or portion thereof which are
surrendered as a result of the exercise of such Stock Appreciation Rights.
c. PAYMENT OF INCREMENTAL VALUE. Any payment which may become
due from the Company by reason of a Participant's exercise of a Stock
Appreciation Right may be paid to the Participant as determined by the Plan
Administrator (i) all in cash, (ii) all in Common Stock, or (iii) in any
combination of cash and Common Stock. In the event that all or a portion of the
payment is made in Common Stock, the number of shares of Common Stock delivered
in satisfaction of such payment shall be determined by dividing the amount of
such payment or portion thereof by the Fair Market Value of the Common Stock on
the Exercise Date. No fractional share of Common Stock shall be issued to make
any payment in respect of Stock Appreciation Rights; if any fractional share
would be issuable, the combination of cash and Common Stock payable to the
Participant shall be adjusted as directed by the Plan Administrator to avoid the
issuance of any fractional share.
6.3 TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
a. CONDITIONS ON EXERCISE. Award Agreements with respect to
Options and/or Stock Appreciation Rights may contain such waiting periods,
exercise dates and/or restrictions on exercise (including, but not limited to,
periodic installments) as may be determined by the Plan Administrator at the
time of grant.
b. DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options
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and Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(1) Expiration of the Option or Stock Appreciation Right as
provided in the Award Agreement; or
(2) Termination of the Award as provided in Section 6.3.e.,
following the Participant's Termination of Employment;
(3) In the case of an Incentive Stock Option not
granted to a Ten Percent Holder,
10 years from the Date of Grant;
(4) In the case of an Incentive Stock Option granted to a Ten
Percent Holder, 5 years from the Date of Grant;
(5) In the case of a Stock Appreciation Right granted in tandem
with an Option, upon the expiration of the related Option; or
(6) In the case of a Non-Employee Director Option, 10 years from
the Date of Grant.
c. ACCELERATION OF EXERCISE TIME. The Plan Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated),
exercisable at any time after the Date of Grant, to permit the exercise of any
Option or Stock Appreciation Right prior to the time such Option or Stock
Appreciation Right would otherwise become exercisable under the terms of the
Award Agreement.
d. EXTENSION OF EXERCISE TIME. In addition to the extensions permitted
under Section 6.3.e. in the event of Termination of Employment, the Plan
Administrator, in its sole discretion, shall have the right (but shall not in
any case be obligated), exercisable on or at any time after the Date of Grant,
to permit any Option or Stock Appreciation Right granted under this Plan to be
exercised after its expiration date described in Section 6.3.e, subject,
however, to the limitations described in Sections 6.3.b.(1), 6.3.b.(3),
6.3.b.(4),6.3.b(5) and 6.3.b.(6).
e. EXERCISE OF OPTIONS OR STOCK APPRECIATION RIGHTS UPON TERMINATION OF
EMPLOYMENT.
(1) TERMINATION OF VESTED OPTIONS AND STOCK APPRECIATION RIGHTS
UPON TERMINATION OF EMPLOYMENT.
(a) TERMINATION. In the event of Termination of Employment
of a Participant, other than by reason of death, disability or Retirement, the
right of such Participant to exercise the Option or Stock Appreciation Right
under the Plan shall terminate 30 days after the date of such Termination of
Employment, unless the exercise period is extended by the Plan Administrator or
unless otherwise agreed in the Award Agreement.
(b) DISABILITY OR RETIREMENT. In the event of a
Participant's Termination of Employment by reason of disability or Retirement,
the right of such Participant to exercise the Options or Stock Appreciation
Rights which he or she was entitled to exercise upon Termination of Employment
(or which became exercisable at a later date pursuant to Section 6.3.d.) shall
terminate 3 years after the date of such Termination of Employment unless the
exercise period is extended by the Plan Administrator in accordance with Section
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6.3.d. In no event, however, may any Option or Stock Appreciation Right be
exercised later than the date of expiration of the Option determined pursuant to
Section 6.3.b.(1), 6.3.b.(3), 6.3.b.(4),6.3.b(5) and 6.3.b.(6).
(c) DEATH. In the event of the death of a Participant while
employed by, or serving on the Board of, the Company or a Subsidiary, or within
the additional period of time from the date of such Participant's Termination of
Employment, and prior to the expiration of the Option or Stock Appreciation
Right as may be permitted in Section 6.3.e.(1)(b) or Section 6.3.d. above, to
the extent the right to exercise the Option or Stock Appreciation Right accrued
as of the date of such Termination of Employment and did not expire during such
additional period and prior to the Participant's death, the right of such
Participant's Beneficiary to exercise the Option or Stock Appreciation Right
under the Plan shall terminate upon the expiration of 3 years from the date of
such Participant's death (but in no event more than 3 years from the date of the
Participant's Termination of Employment by reason of disability or retirement),
unless the exercise period is extended by the Plan Administrator in accordance
with Section 6.3.d. In no event, however, may any Option or Stock Appreciation
Right be exercised later than the date of expiration of the Option determined
pursuant to Section 6.3.b.(1), 6.3.b.(3), 6.3.b.(4),6.3.b(5) and 6.3.b.(6).
(2) TERMINATION OF UNVESTED OPTIONS OR STOCK APPRECIATION RIGHTS
UPON TERMINATION OF EMPLOYMENT. Subject to Section 6.3.c., to the extent the
right to exercise an Option or a Stock Appreciation Right, or any portion
thereof, has not accrued as of the date of Termination of Employment such right
shall expire on the date of such Termination of Employment. Notwithstanding the
foregoing, the Plan Administrator may, within its discretion and under such
terms as it deems appropriate, permit a Participant who terminates employment or
service as a director by reason of Retirement and who will continue to render
significant services to the Company or one of its Subsidiaries after his or her
Termination of Employment, to continue vesting in his or her Options and Stock
Appreciation Rights during the period in which the individual continues to
render such services.
6.4 EXERCISE PROCEDURES. Each Option and Stock Appreciation Right
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer or employee of the Company designated in the
Award Agreement on or before the close of business on the expiration date of the
Award. The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the
Award Agreement; PROVIDED, HOWEVER, that the Plan Administrator may (but shall
not be required to) permit payment to be made by delivery to the Company of
either (a) Common Stock (which may include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Plan Administrator deems appropriate) or (b) any combination of cash and
Common Stock, or (c) such other consideration as the Plan Administrator deems
appropriate and in compliance with applicable law (including payment in
accordance with a cashless exercise program under which, if so instructed by the
Participant, Common Stock may be issued directly to the Participant's broker or
dealer upon receipt of an irrevocable written notice of exercise from the
Participant). In the event that any Common Stock shall be transferred to the
Company to satisfy all or any part of the Purchase Price, the part of the
Purchase Price deemed to have been satisfied by such transfer of Common Stock
shall be equal to the product derived by multiplying the Fair Market Value as of
the date of exercise times the number of shares of Common Stock transferred to
the Company. The Participant may not transfer to the Company in satisfaction of
the Purchase Price any fractional share of Common Stock. Any part of the
Purchase Price paid in cash upon the exercise of any Option shall be added to
the general funds of the Company and may be used for any proper corporate
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purpose. Unless the Plan Administrator shall otherwise determine, any Common
Stock transferred to the Company as payment of all or part of the Purchase Price
upon the exercise of any Option shall be held as treasury shares.
6.5 CHANGE IN CONTROL. Unless otherwise provided by the Plan
Administrator in the applicable Award Agreement, in the event of a Change in
Control, all Options outstanding on the date of such Change in Control, and all
Stock Appreciation Rights shall become immediately and fully exercisable. The
provisions of this Section 6.5 shall not be applicable to any Options or Stock
Appreciation Rights granted to a Participant if any Change in Control results
from such Participant's beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of Common Stock or Company Voting Securities.
ARTICLE 7
RESTRICTED SHARES
7.1 RESTRICTED SHARE AWARDS. The Plan Administrator may grant to any
Participant an Award of Common Stock in such number of shares, and on such
terms, conditions and restrictions, whether based on performance standards,
periods of service, retention by the Participant of ownership of purchased or
designated shares of Common Stock or other criteria, as the Plan Administrator
shall establish. With respect to performance-based Awards of Restricted Shares
intended to qualify for deductibility under Section 162(m) of the Code,
performance targets will include specified levels of one or more of operating
income, earnings per share, return on investment, return on shareholders' equity
and/or objective measures of individual performance. The terms of any Restricted
Share Award granted under this Plan shall be set forth in an Award Agreement
which shall contain provisions determined by the Plan Administrator and not
inconsistent with this Plan.
a. ISSUANCE OF RESTRICTED SHARES. As soon as practicable after
the Date of Grant of a Restricted Share Award by the Plan Administrator, the
Company shall cause to be transferred on the books of the Company, or its agent,
Common Stock, registered on behalf of the Participant, evidencing the Restricted
shares covered by the Award, but subject to forfeiture to the Company as of the
Date of Grant if an Award Agreement with respect to the Restricted Shares
covered by the Award is not duly executed by the Participant and timely returned
to the Company. All Common Stock covered by Awards under this Article VII shall
be subject to the restrictions terms and conditions contained in the Plan and
the Award Agreement entered into by the Participant. Until the lapse or release
of all restrictions applicable to an Award of Restricted Shares the share
certificates representing such Restricted Shares may be held in custody by the
Company, its designee, or, if the certificates bear a restrictive legend, by the
Participant. Upon the lapse or release of all restrictions with respect to an
Award as described in Section 7.1.d., one or more share certificates, registered
in the name of the Participant, for an appropriate number of shares as provided
in Section 7.1.d., free of any restrictions set forth in the Plan and the Award
Agreement shall be delivered to the Participant.
b. SHAREHOLDER RIGHTS. Beginning on the Date of Grant of the
Restricted Share Award and subject to execution of the Award Agreement as
provided in Section 7.1.a., the Participant shall become a shareholder of the
Company with respect to all shares subject to the Award Agreement and shall have
all of the rights of a shareholder, including, but not limited to, the right to
vote such shares and the right to receive dividends; PROVIDED, HOWEVER, that any
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be
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subject to the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.1.a.
c. RESTRICTION ON TRANSFERABILITY. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws of descent
and distribution, or, in the case of Participants not subject to Section 16 of
the Exchange Act, to an INTER VIVOS trust with respect to which the Participant
is treated as the owner under Sections 671 through 677 of the Code), pledged or
sold prior to lapse of the restrictions applicable thereto.
d. DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier
termination of the forfeiture period without a forfeiture and the satisfaction
of or release from any other conditions prescribed by the Plan Administrator, or
at such earlier time as provided under the provisions of Section 7.3, the
restrictions applicable to the Restricted Shares shall lapse. As promptly as
administratively feasible thereafter, subject to the requirements of Section
11.5, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's Beneficiary, one or more share
certificates for the appropriate number of shares of Common Stock, free of all
such restrictions, except for any restrictions that may be imposed by law.
7.2 TERMS OF RESTRICTED SHARES.
a. FORFEITURE OF RESTRICTED SHARES. Subject to Sections 7.2.b.
and 7.3, all Restricted Shares shall be forfeited and returned to the Company
and all rights of the Participant with respect to such Restricted Shares shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary as an employee until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set forth in the
Award Agreement. The Plan Administrator shall determine the forfeiture period
(which may, but need not, lapse in installments) and any other terms and
conditions applicable with respect to any Restricted Share Award.
b. WAIVER OF FORFEITURE PERIOD. Notwithstanding anything
contained in this Article 7 to the contrary, the Plan Administrator may, in its
sole discretion, waive the forfeiture period and any other conditions set forth
in any Award Agreement under appropriate circumstances (including the death,
disability or Retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted
Shares) as the Plan Administrator shall deem appropriate.
7.3 CHANGE IN CONTROL. Unless otherwise provided by the Plan
Administrator in the applicable Award Agreement, in the event of a Change in
Control, all restrictions applicable to the Restricted Share Award shall
terminate fully and the Participant shall immediately have the right to the
delivery of share certificate or certificates for such shares in accordance with
Section 7.1.d.
ARTICLE 8
PERFORMANCE AWARDS
8.1 PERFORMANCE AWARDS.
a. AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE
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AMOUNTS. The Plan Administrator may grant Performance Awards to Participants. A
Performance Award shall consist of the right to receive a payment (measured by
the Fair Market Value of a specified number of shares of Common Stock, increases
in such Fair Market Value during the Award Period and/or a fixed cash amount)
contingent upon the extent to which certain predetermined performance targets
have been met during an Award Period. Performance Awards may be made in
conjunction with, or in addition to, Restricted Share Awards made under Article
7. The Award Period shall be two or more fiscal or calendar years as determined
by the Plan Administrator. The Plan Administrator, in its discretion and under
such terms as it deems appropriate, may permit newly eligible employees, such as
those who are promoted or newly hired, to receive Performance Awards after an
Award Period has commenced.
b. PERFORMANCE TARGETS. The performance targets may include
such goals related to the performance of the Company and/or the performance of a
Participant as may be established by the Plan Administrator in its discretion.
In the case of Performance Awards intended to qualify for deductibility under
Section 162(m) of the Code, the targets will include specified levels of one or
more of operating income, earnings per share, return on investment, return on
shareholders' equity and/or objective measures of individual performance. The
performance targets established by the Plan Administrator may vary for different
Award Periods and need not be the same for each Participant receiving a
Performance Award in an Award Period. Except to the extent inconsistent with the
performance-based compensation exception under Section 162(m) of the Code, in
the case of Performance Awards granted to employees to whom such section is
applicable, the Plan Administrator, in its discretion, but only under
extraordinary circumstances as determined by the Plan Administrator, may change
any prior determination of performance targets for any Award Period at any time
prior to the final determination of the Award when events or transactions occur
to cause the performance targets to be an inappropriate measure of achievement.
c. SHAREHOLDER APPROVAL. In the case of Performance Awards
intended to qualify for deductibility under Section 162(m) of the Code, the
material terms under which the remuneration is to be paid, including the
performance goals, will be, to the extent required under Section 162(m) of the
Code, disclosed to the shareholders of the Company and approved by a majority
vote (in a separate shareholder vote) of the shareholders before payment of such
remuneration is made pursuant to Section 8.1.e.
d. EARNING PERFORMANCE AWARDS. The Plan Administrator, at or
as soon as practicable after the Date of Grant, shall prescribe a formula to
determine the percentage of the Performance Award to be earned based upon the
degree of attainment of performance targets.
e. PAYMENT OF EARNED PERFORMANCE AWARDS. Payments of earned
Performance Awards shall be made in cash or Common Stock, or a combination of
cash and Common Stock, in the discretion of the Plan Administrator. In the case
of Performance Awards intended to qualify for deductibility under Section 162(m)
of the Code, such payments of earned Performance Awards will be conditioned, to
the extent required under Section 162(m) of the Code, upon prior written
certification by the Plan Administrator of attainment of the specified
performance targets. The Plan Administrator, in its sole discretion, may define
such terms and conditions with respect to the payment of earned Performance
Awards as it may deem desirable.
8.2 TERMS OF PERFORMANCE AWARDS.
a. TERMINATION OF EMPLOYMENT. Unless otherwise provided below
or in Section 8.3, in the case of a Participant's Termination of Employment
prior to the end of an Award Period, the Participant will not have earned any
Performance Awards.
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b. RETIREMENT. If a Participant's Termination of Employment is
because of Retirement prior to the end of an Award Period, the Participant will
not be paid any Performance Awards, unless the Plan Administrator, in its sole
and exclusive discretion, determines that an Award should be paid. In such a
case, the Participant shall be entitled to receive a pro-rata portion of his or
her Award as determined under Section 8.2.d.
c. DEATH OR DISABILITY. If a Participant's Termination of
Employment is due to death or disability (as determined in the sole and
exclusive discretion of the Plan Administrator) prior to the end of an Award
Period, the Participant or the Participant's personal representative shall be
entitled to receive a pro-rata share of his or her Award as determined under
Section 8.2.d.
d. PRO-RATA PAYMENT. The amount of any payment made to a
Participant whose employment is terminated by retirement, death or disability
(under circumstances described in Sections 8.2.b and 8.2.c.) will be the amount
determined by multiplying the amount of the Performance Award which would have
been earned, determined at the end of the Award Period, had such employment not
been terminated, by a fraction, the numerator of which is the number of whole
months such Participant was employed during the Award Period, and the
denominator of which is the total number of months of the Award Period. Any such
payment made to a Participant whose employment is terminated prior to the end of
an Award Period under this Section 8.2 shall be made at the end of the
respective Award Period, unless otherwise determined by the Plan Administrator
in its sole discretion. Any partial payment previously made or credited to a
deferred account for the benefit of a Participant as provided under Section
8.1.e. of the Plan shall be subtracted from the amount otherwise determined as
payable as provided in this Section 8.2.d.
e. OTHER EVENTS. Notwithstanding anything to the contrary in
this Article 8, the Plan Administrator may, in its sole and exclusive
discretion, determine to pay all or any portion of a Performance Award to a
Participant who has terminated employment prior to the end of an Award Period
under certain circumstances (including the death, disability or retirement of
the Participant or a material change in circumstances arising after the Date of
Grant) and subject to such terms and conditions as the Plan Administrator shall
deem appropriate.
8.3 CHANGE IN CONTROL. Unless otherwise provided by the Plan
Administrator in the applicable Award Agreement, in the event of a Change in
Control, all Performance Awards for all Award Periods shall immediately become
fully payable to all Participants and shall be paid to Participants within 30
days after such Change in Control.
ARTICLE 9
OTHER STOCK-BASED AWARDS
9.1 GRANT OF OTHER STOCK-BASED AWARDS. Other stock-based Awards,
consisting of Awards of stock purchase rights (with or without loans to
Participants by the Company containing such terms as the Plan Administrator
shall determine), Awards of cash, Awards of Common Stock, and Awards valued in
whole or in part by reference to, or otherwise based on, Common Stock, may be
granted either alone or in addition to or in conjunction with other Awards under
the Plan. Subject to the provisions of the Plan, the Plan Administrator shall
have sole and complete authority to determine the persons to whom and the time
or times at which such Awards shall be made, the number of shares of Common
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Stock to be granted pursuant to such Awards, and all other conditions of the
Awards. Any such Award shall be confirmed by an Award Agreement executed by the
Plan Administrator and the Participant, which Award Agreement shall contain such
provisions as the Plan Administrator determines to be necessary or appropriate
to carry out the intent of this Plan with respect to such Award.
9.2 TERMS OF OTHER STOCK-BASED AWARDS. In addition to the terms and
conditions specified in the Award Agreement, Awards made pursuant to this
Article 9 shall be subject to the following:
a. RESTRICTION ON TRANSFERABILITY. Any Common Stock subject to
Awards made under this Article 9 may not be sold, assigned, transferred, pledged
or otherwise encumbered prior to the date on which the shares are issued, or, if
later, the date on which any applicable restriction, performance or deferral
period lapses; and
b. RECIPIENTS' RIGHTS. If specified by the Plan Administrator
in the Award Agreement, the recipient of an Award under this Article 9 shall be
entitled to receive, currently or on a deferred basis, interest or dividends or
dividend equivalents with respect to the Common Stock or other securities
covered by the Award; and
c. ADDITIONAL PROVISIONS. The Award Agreement with respect to
any Award shall contain provisions dealing with the disposition of such Award in
the event of a Termination of Employment prior to the exercise, realization or
payment of such Award, whether such termination occurs because of retirement,
disability, death or other reason, with such provisions to take account of the
specific nature and purpose of the Award.
9.3 FOREIGN QUALIFIED AWARDS. Awards under the Plan may be granted to
such employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Plan Administrator in its sole discretion may determine
from time to time. The Plan Administrator may adopt such supplements to the Plan
as may be necessary or appropriate to comply with the applicable laws of such
foreign jurisdictions and to afford Participants favorable treatment under such
laws; PROVIDED, HOWEVER, that no Award shall be granted under any such
supplement with terms or conditions inconsistent with the provision set forth in
the Plan.
ARTICLE 10
SHORT-TERM CASH INCENTIVE AWARDS
10.1 ELIGIBILITY. Executive officers of the Company who are from time
to time determined by the Plan Administrator to be "covered employees" for
purposes of Section 162(m) of the Code will be eligible to receive short-term
cash incentive awards under this Article 10.
10.2 AWARDS.
a. PERFORMANCE TARGETS. For each fiscal year of the Company
after fiscal year 1996, the Plan Administrator shall establish objective
performance targets based on one or more of the following: economic value added
(the amount, if any, by which net operating profit after tax exceeds a reference
cost of capital of no less than 7%), operating profit, return on investment or
working capital, reductions in inventory, inventory turns and delivery
performance, any one of which may be measured with respect to the Company or any
one or more of its Subsidiaries and either in absolute terms or as compared to
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<PAGE>
another company or companies, and objective measures of individual performance.
Such performance targets shall be established by the Plan Administrator on a
timely basis to ensure that the targets are considered "preestablished" for
purposes of Section 162(m) of the Code.
b. SHAREHOLDER APPROVAL. In the case of Awards intended to
qualify for deductibility under Section 162(m) of the Code, the material terms
under which the remuneration is to be paid, including the performance goals,
will be, to the extent required under Section 162(m) of the Code, disclosed to
the shareholders of the Company and approved by a majority vote (in a separate
shareholder vote) of the shareholders before payment of such remuneration is
made pursuant to Section 10.2.d.
c. AMOUNTS OF AWARDS. In conjunction with the establishment of
performance targets for a fiscal year, the Plan Administrator shall adopt an
objective formula (on the basis of percentages of Participants' salaries, shares
in a bonus pool or otherwise) for computing the respective amounts payable under
the Plan to Participants if and to the extent that the performance targets are
attained. Such formula shall comply with the requirements applicable to
performance-based compensation plans under Section 162(m) of the Code.
d. PAYMENT OF AWARDS. Awards will be payable to Participants
in cash each year upon prior written certification by the Plan Administrator of
attainment of the specified performance targets for the preceding fiscal year.
e. NEGATIVE DISCRETION. Notwithstanding the attainment by the
Company of the specified performance targets, the Plan Administrator shall have
the discretion, which need not be exercised uniformly among the Participants, to
reduce or eliminate the award that would be otherwise paid.
f. GUIDELINES. The Plan Administrator shall adopt from time to
time written policies for its implementation of this Article 10. Such guidelines
shall reflect the intention of the Company that all payments hereunder qualify
as performance-based compensation under Section 162(m) of the Code.
g. NON-EXCLUSIVE ARRANGEMENT. The adoption and operation of
this Article 10 shall not preclude the Plan Administrator from approving other
short-term incentive compensation arrangements for the benefit of individuals
who are Participants hereunder as the Plan Administrator deems appropriate and
in the best interests of the Company.
ARTICLE 11
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
11.1 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Plan
Administrator have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 11.3
and Section 11.7, the terms of any Award granted under the Plan may not be
changed after the Date of Grant of such Award so as to materially decrease the
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value of the Award without the express written approval of the holder.
11.2 AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Plan
Administrator expressly granting the Award to such person and containing
provisions setting forth the terms of the Award.
11.3 MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Plan Administrator.
11.4 LIMITATION ON TRANSFER. Except as provided in Section 7.1.c. in
the case of Restricted Shares, a Participant's rights and interest under the
Plan may not be assigned or transferred other than by will or the laws of
descent and distribution, and during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Plan
Administrator may grant Non-Qualified Stock Options that are transferable,
without payment of consideration, to immediate family members of the Participant
or to trusts or partnerships for such family members, and the Plan Administrator
may also amend outstanding Non-Qualified Stock Options to provide for such
transferability.
11.5 TAXES. The Company shall be entitled, if the Plan Administrator
deems it necessary or desirable, to withhold (or secure payment from the
Participant in lieu of withholding) the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any amount
payable and/or shares issuable under such Participant's Award, or with respect
to any income recognized upon a disqualifying disposition of shares received
pursuant to the exercise of an Incentive Stock Option, and the Company may defer
payment or issuance of the cash or shares upon exercise or vesting of an Award
unless indemnified to its satisfaction against any liability for any such tax.
The amount of such withholding or tax payment shall be determined by the Plan
Administrator and shall be payable by the Participant at such time as the Plan
Administrator determines in accordance with the following rules:
a. The Participant shall have the right to elect to meet his
or her withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, whose Fair Market Value is equal to the amount of withholding taxes
due, (ii) by direct payment to the Company in cash of the amount of any taxes
required to be withheld with respect to such Award or (iii) by a combination of
shares and cash.
b. The Plan Administrator shall have the discretion as to any
Award, to cause the Company to pay to tax authorities for the benefit of any
Participant, or to reimburse such Participant for the individual taxes which are
due on the grant, exercise or vesting of any share Award, or the lapse of any
restriction on any share Award (whether by reason of a Participant's filing of
an election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise
tax under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.
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<PAGE>
c. In the case of Participants who are subject to Section 16
of the Exchange Act, the Plan Administrator may impose such limitations and
restrictions as it deems necessary or appropriate with respect to the delivery
or withholding of shares of Common Stock to meet tax withholding obligations.
11.6 SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Plan
Administrator and the holder approve.
11.7 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
a. RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares, the
number and kind of shares available for Awards subsequently granted under the
Plan and the maximum number of shares in respect of which Awards can be made to
any Participant in any calendar year shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Plan
Administrator shall have the power and sole discretion to determine the amount
of the adjustment to be made in each case.
b. MERGER. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of an Option or receipt of another Award to receive,
subject to any required action by shareholders, in lieu of the number of shares
of Common Stock receivable or exercisable pursuant to such Award, the number and
class of shares or other securities to which such Participant would have been
entitled pursuant to the terms of the Merger if, at the time of the Merger, such
Participant had been the holder of record of a number of shares equal to the
number of shares receivable or exercisable pursuant to such Award. Comparable
rights shall accrue to each Participant in the event of successive Mergers of
the character described above. In the event of a Merger in which the Company is
not the surviving corporation, the surviving, continuing, successor, or
purchasing corporation, as the case may be (the "ACQUIRING CORPORATION"), shall
either assume the Company's rights and obligations under outstanding Award
Agreements or substitute awards in respect of the Acquiring Corporation's stock
for such outstanding Awards. In the event the Acquiring Corporation elects not
to assume or substitute for such outstanding Awards, the Board shall provide
that any unexercisable and/or unvested portion of the outstanding Awards shall
be immediately exercisable and vested as of a date prior to such merger or
consolidation, as the Board so determines. The exercise and/or vesting of any
Award that was permissible solely by reason of this Section 11.7.b. shall be
conditioned upon the consummation of the merger or consolidation. Any Options
which are neither assumed by the Acquiring Corporation nor exercised as of the
date of the Merger shall terminate effective as of the effective date of the
Merger.
c. OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES.
After any merger in which the Company or a Subsidiary shall be a surviving
corporation, the Plan Administrator may grant substituted options under the
provisions of the Plan, pursuant to Section 424 of the Code, replacing old
options granted under a plan of another party to the merger whose shares or
stock subject to the old options may no longer be issued following the merger.
The foregoing adjustments and manner of application of the foregoing provisions
shall be determined by the Plan Administrator in its sole discretion. Any such
adjustments may provide for the elimination of any fractional shares which might
otherwise become subject to any Options.
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<PAGE>
11.8 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under this Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
11.9 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
11.10 GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Florida and construed
in accordance therewith.
11.11 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Plan Administrator, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Plan Administrator.
11.12 COMPLIANCE WITH RULE 16B-3. It is intended that the Plan be
applied and administered in compliance with Rule 16b-3. If any provision of the
Plan would be in violation of Rule 16b-3 if applied as written, such provision
shall not have effect as written and shall be given effect so as to comply with
Rule 16b-3, as determined by the Plan Administrator. The Board is authorized to
amend the Plan and to make any such modifications to Award Agreements to comply
with Rule 16b-3, as it may be amended from time to time, and to make any other
such amendments or modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to Rule
16b-3.
11.13 CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions have
been used in the Plan.
11.14 SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
11.15 AMENDMENT AND TERMINATION.
a. AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time; PROVIDED, HOWEVER, that the Board shall
not, without the requisite affirmative approval of shareholders of the Company,
make any amendment which requires shareholder approval under Rule 16b-3 or the
Code, unless such compliance is no longer desired under Rule 16b-3, the Code or
under any other applicable law or rule of any stock exchange which lists Common
Stock or Company Voting Securities. No termination or amendment of the Plan may,
without the consent of the Participant to whom any Award shall theretofore have
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been granted under the Plan, adversely affect the right of such individual under
such Award.
b. TERMINATION. The Board shall have the right and the power
to terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall not
have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not terminated.
* * *
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EXHIBIT 4.2
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into on
June __, 1996, by and between GENETIC VECTORS, INC., a Florida corporation (the
"Corporation"), and JAMES A. JOYCE (the "Consultant").
RECITALS:
--------
WHEREAS, the Corporation desires to engage the Consultant, and the
Consultant desires to be engaged by the Corporation, to provide the consulting
services described herein upon the terms and conditions and for the
consideration set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. SERVICES TO BE PROVIDED. The Corporation hereby retains the
Consultant to perform certain business consulting services as described on
Schedule "A" hereto.
2. COMPENSATION. As compensation for his services, the Corporation
shall pay the Consultant $5,000.00 per month (the "Consulting Fee") during the
term hereof. This Consulting Fee shall begin to accrue on the date of this
Agreement, and all accrued Consulting Fees shall be payable ten (10) days after
the closing of the Corporation's proposed private placement bridge financing
transaction. Thereafter, the Corporation shall pay the Consulting Fee to the
Consultant by the fifteenth (15th) business day of each month for all services
to be performed in the succeeding month.
3. OPTIONS. Subject to the vesting schedule described below, the
Consultant is hereby granted options (the "Options") to purchase a total of
75,000 shares of the Corporation's $0.10 par value per share common stock (the
"Common Stock") at an exercise price of $5.00 per share. One third of the
Options shall become exercisable upon the execution of this Agreement by both
parties, one third of the Options shall become exercisable upon the closing of
an initial public offering of the Common Stock by the Corporation, and one third
of the Options shall become exercisable if the Corporation enters into an
employment relationship (as evidenced by the execution of an employment
agreement) with a senior-level officer who has been introduced to the
Corporation by the Consultant. The Options may be exercised by delivery of
written notice of such exercise to the Corporation. Notwithstanding any other
provision of this Agreement, all unexercised Options shall terminate on the
fourth anniversary of this Agreement.
4. DEVOTION OF TIME. The Consultant shall devote as much of his time as
reasonably required to perform his duties hereunder.
5. TERM; TERMINATION. The term of this Agreement shall commence on the
date hereof and shall terminate one hundred eighty (180) days after the date
hereof. After the termination of this 180 day term, this Agreement shall
continue on a month to month basis on the same terms and conditions as the
initial term, and either party may then terminate this Agreement at the end of
any month by written notice to the other party. Notwithstanding any other
provision of this Agreement, if the Corporation (a) closes an initial public
offering within six (6) months after the termination or expiration hereof, or
<PAGE>
(b) enters into an employment relationship (as evidenced by the execution of an
employment agreement) within two (2) years after the expiration or termination
hereof with a senior-level officer who was introduced to the Corporation by the
Consultant, the Consultant's applicable rights to exercise the Options as
granted in Section 3 hereof shall survive the expiration or termination hereof
for such periods of time.
6. INDEPENDENT CONTRACTOR. The parties hereto acknowledge and agree
that the Consultant is an independent contractor and that nothing in this
Agreement is intended to cause the Consultant to be an employee, fiduciary,
agent, legal representative, partner or servant of the Corporation for any
purpose whatsoever. The Corporation shall in no event assume liability for or be
deemed liable hereunder as a result of any contract, agreement, understanding,
debt or obligation entered into by the Consultant on the Corporation's behalf
without the Corporation's prior written consent.
7. CONFIDENTIALITY. By virtue of the services performed hereunder, the
Consultant may obtain confidential or proprietary information belonging or
relating to the Corporation, regardless of whether any such information, data or
documents qualify as "trade secrets" under applicable law (collectively, the
"Confidential Information"). Because the secrecy of the Confidential Information
gives the Corporation a significant competitive business advantage, the
Consultant agrees that he shall not directly or indirectly disclose, use or
cause or aid in the disclosure or use of any Confidential Information during or
after the term of this Agreement, for whatever reason, except as required by
law, with the prior written consent of the Corporation, or when such
Confidential Information is otherwise generally available to the public. The
Consultant agrees that any violation or breach of any provision of this Section
7 will cause irreparable harm to the Corporation and cannot be adequately
compensated for by money damages. The Consultant therefore agrees that any such
violation or breach may be enjoined by any court of competent jurisdiction
without the posting of a bond, without waiving or affecting the Corporation's
claims for money damages resulting from such violation or breach.
8. NONCOMPETITION PROVISION. During the term of this Agreement
(including any monthly extension of the initial term as contemplated in Section
5) and for ninety (90) days thereafter, the Consultant shall not, except with
the prior written consent of the Corporation, which may be withheld in the
Corporation's sole discretion, engage, as an employee, consultant, equity owner
or partner, in any business activities anywhere in the world which are directly
competitive with those of the Corporation. Notwithstanding this restriction, the
Consultant shall not be prohibited from engaging in any business activities in
which his sole connection to such business activities is the passive ownership
of less than 10% of the outstanding equity interests of the entity involved, and
he may exceed this 10% ownership threshold with the written consent of the
Corporation. This provision shall not affect the Consultant's ownership or
service as an officer or director of James Joyce & Associates, Inc., but the
Consultant's activities as a shareholder, officer and director of James Joyce &
Associates, Inc. shall not be exempt from the provisions of this Section 8.
9. INDEMNIFICATION; SURVIVAL. The Consultant shall indemnify and hold
the Corporation harmless for any damages the Corporation incurs as a result of
the Consultant's breach of Sections 6, 7 or 8 hereof. Sections 3, 6, 7, 8, 9, 13
and 14 hereof shall survive the expiration or termination of this Agreement for
any reason.
10. NOTICES. Any notices given under this Agreement shall be deemed
duly given if delivered in person or mailed by registered or certified mail, if
to the Corporation to:
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<PAGE>
Genetic Vectors, Inc.
4181 Malaga Avenue
Coconut Grove, Florida 33133
Attn: Mead McCabe, Jr., President
or if to the Consultant to: James A. Joyce
James Joyce & Associates, Inc.
835 5th Avenue, Suite 202
San Diego, California 92101
or to such other address as either party may from time to time designate in
writing. The date of any such notice shall be deemed to be the date delivered in
person or the date so mailed.
11. ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW AND DISPUTE RESOLUTION.
This Agreement contains the entire agreement between the parties regarding the
matters contained herein, and supersedes all prior agreements and
understandings, whether oral or written, between the Corporation and the
Consultant. This Agreement may not be amended or modified in any respect except
by a writing executed by both of the parties hereto. This Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of Florida. Any dispute or controversy which arises between the parties
hereto in connection with this Agreement shall be conclusively resolved by
binding arbitration (by an arbitrator mutually agreeable to both parties) in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect unless the parties hereto otherwise mutually agree in
writing. Such arbitration shall take place in Miami, Florida. The judgment of
the arbitrator or arbitrators shall be final and binding on the parties and
judgment upon the arbitration award may be entered in any court of competent
jurisdiction. The arbitrator or arbitrators shall determine the allocation, if
any, of all costs and expenses of such arbitration, including, without
limitation, attorneys' fees.
12. EXPENSES. Upon the submission of appropriate supporting
documentation, the Corporation shall reimburse the Consultant for all reasonable
expenses incurred by him in connection with the provision of his services
hereunder; provided, however, that the Consultant shall obtain the Corporation's
prior written approval, which may be withheld in its sole discretion, for any
expenses which exceed an aggregate of $500.00 during any month.
13. PIGGYBACK REGISTRATION RIGHTS.
a. NOTICE REQUIREMENT. If at any time during the period
(the "Registration Rights Period") beginning on the first anniversary of the
date of this Agreement and ending on the fifth anniversary of the date of this
Agreement the Corporation proposes to register any shares (the "Shares") of
Common Stock under the Securities Act of 1933 (as amended) or any applicable
state securities laws (collectively referred to as the "Securities Laws") in
connection with an offering (an "Offering") of the Common Stock, the Corporation
shall deliver to the Consultant notice of its intention to register such Shares
(the "Registration Notice") at least thirty (30) days prior to any filing of a
registration statement.
b. REGISTRATION OBLIGATION. If the Consultant delivers
written notice of his intent to exercise his registration rights hereunder to
the Corporation no later than thirty (30) days after the Consultant receives the
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<PAGE>
Registration Notice, the Corporation shall, subject to the terms and conditions
of this Section 13, use its best efforts to register under the Securities Laws
the number of Shares that the Consultant requests by inclusion of such Shares in
the applicable registration statement. The Consultant's notice to the
Corporation shall include the number of Shares that he intends to register along
with any other information that the Corporation may request in the Registration
Notice.
c. REGISTRATION EXPENSES. The Corporation shall pay all
expenses related to each registration of Shares hereunder.
d. EXCLUSIONS FROM REGISTRATION OBLIGATIONS. The
Corporation shall not be obligated to register any of the Consultant's Shares
pursuant to this Section 13 if (i) in the judgment of the lead underwriter or
underwriters (collectively, the "Underwriters") for an Offering, such inclusion
of the Consultant's Shares in that Offering would jeopardize the success of the
Offering, (ii) the Consultant does not provide the information described in
Sections 13(b) or 13(e) hereof in a timely manner, or (iii) an Offering is to be
effected on a form that is not appropriate for the inclusion of the Consultant's
Shares.
e. INFORMATION; INDEMNIFICATION. In connection with any
registrations of Shares hereunder, the Consultant shall promptly provide all
information requested by the Corporation. The Consultant shall indemnify and
hold the Corporation and the Underwriters harmless for any liability that any of
them suffers as a result of (i) erroneous information supplied by the
Consultant, or (ii) the omission of any information by the Consultant.
f. MISCELLANEOUS. The Consultant shall have no right to
dictate any of the terms or conditions of any Offering, including, without
limitation, the acceleration or delay of the timing of the Offering, the
jurisdictions in which the Offering will be made or the price of the Shares
offered thereby. All of these terms and conditions shall be determined by the
Corporation and the Underwriters. The Consultant agrees and acknowledges that
the Corporation is under no obligation to, and makes no representation that it
will, effect any Offerings during the Registration Rights Period.
Notwithstanding any other provision of this Agreement, the Consultant shall only
be entitled to participate in a total of two (2) Offerings during the
Registration Rights Period.
14. REGISTRATION ON FORM S-8. Except as otherwise provided herein, the
Consultant shall be entitled to have his Options registered on any registration
statement on Securities and Exchange Commission Form S-8 ("Form S-8") that is
filed by the Company within the five (5) year period following the date of this
Agreement. The rights granted in this Section 14 shall not be available to the
Consultant if, in the Company's reasonable discretion, the Consultant is not
eligible to utilize Form S-8 under applicable SEC rules. The Company makes no
representation or guarantee to the Consultant that he will be eligible to use
Form S-8. The Company shall use its best efforts to have a registration
statement on Form S-8 in place on or before the second anniversary of the date
hereof.
15. SEVERABILITY. If any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and all such other
provisions shall remain in full force and effect.
16. ASSIGNMENT. This Agreement is personal in nature and the Consultant
shall not assign or transfer this Agreement or any rights or obligations
hereunder without the prior written consent of the Corporation.
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17. WAIVER. The failure of either party hereto at any time or times to
require performance hereunder shall in no way affect such party's right at a
later time to require such performance. No waiver by either party of any
condition, or of the breach of any term contained herein, by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or breach of any other term of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
as of the date first above written.
GENETIC VECTORS, INC.
By: /s/ Mead M. McCabe, Jr.
--------------------------
Mead M. McCabe, Jr.
Its: President
------------------------
/s/ James A. Joyce
-----------------------------
James A. Joyce
<PAGE>
EXHIBIT "A"
-----------
DESCRIPTION OF CONSULTING SERVICES
----------------------------------
General management consulting services, including, without limitation,
business development, corporate planning and employee recruitment.
Kirkpatrick & Lockhart LLP
Miami Center
201 South Biscayne Blvd.
Miami, Florida 33131-2399
May 28, 1998
Genetic Vectors, Inc.
5201 N.W. 77th Avenue, Suite 100
Miami, Florida 33166
RE: GENETIC VECTORS, INC.
REGISTRATION STATEMENT ON FORM S-8
FILE NO. 333-5530 (THE "REGISTRATION STATEMENT")
OPINION RE: LEGALITY
Gentlemen:
We have acted as counsel to Genetic Vectors, Inc., a Florida
corporation (the "CORPORATION"), in connection with the preparation of the
above-referenced Registration Statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "1933 ACT"),
relating to the offering of up to 300,000 shares of the Corporation's Common
Stock, par value $0.01 per share (the "COMMON STOCK"), pursuant to the Genetic
Vectors, Inc. 1996 Incentive Plan (the "INCENTIVE PLAN") and up to 75,000 shares
of Common Stock pursuant to that certain Consulting Agreement, dated June 1996,
by and between the Corporation and James A. Joyce (the "CONSULTING AGREEMENT").
We are furnishing this opinion to you in accordance with Item
601(b)(5) of Regulation S-K promulgated under the 1933 Act for filing as Exhibit
5.1 to the Registration Statement.
We are familiar with the Registration Statement, and we have
examined the Corporation's Articles of Incorporation, as amended to date, the
Corporation's Bylaws, as amended to date, and minutes and resolutions of the
Corporation's Board of Directors and shareholders. We have also examined such
other documents, certificates, instruments and corporate records, and such
statutes, decisions and questions of law as we have deemed necessary or
appropriate for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that the
shares of Common Stock to be issued by the Corporation under each of the
Incentive Plan and the Consulting Agreement, when issued and sold in the manner
<PAGE>
Genetic Vectors, Inc.
May 28, 1998
Page 2
described in the Registration Statement (as amended), will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement and to the use of our name in the Prospectus
constituting a part thereof in connection with the matters referred to under the
caption "Legal Matters."
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
--------------------------------
Kirkpatrick & Lockhart LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Genetic Vectors, Inc.
Miami, Florida
We hereby consent to the use in the Prospectus constituting a part of
this Registration Statement of our report dated March 19, 1998, relating to the
financial statements of Genetic Vectors, Inc., which is contained in Part II of
the Registration Statement. Our report contains an explanatory paragraph
regarding the Company's ability to continue as a going concern.
/s/ BDO Seidman, LLP
--------------------------
BDO Seidman, LLP
Miami, Florida
May 21, 1998
