EXHIBIT 4.1
<P>
TIDALWAVE HOLDINGS INC.
2000 EMPLOYEE STOCK OPTION PLAN
<P>
1. Purposes.
<P>
The purpose of the Tidalwave Holdings Inc. 2000 Employee
Stock Option Plan (the "Plan") is to foster and promote the
long term financial success of the Company and materially
increase shareholder value by (a) motivating superior
performance by means of performance-related incentives, (b)
encouraging and providing for the acquisition of an
ownership interest in the Company by Employees and (c)
enabling the Company to attract and retain the services of
an outstanding management team upon whose judgment, interest
and special effort the successful conduct of its operations
is largely dependent. The Company shall also utilize this
plan to pay employee bonuses, past due salary and current
salary.
<P>
2. Definitions.
<P>
(a) Certain Definitions. Capitalized terms used herein
without definition shall have the respective meanings set
forth below:
<P>
"Act" means the Securities Exchange Act of 1934, as amended.
<P>
"Board" means the Board of Directors of the Company.
<P>
"Cause" means (i) the willful failure by the Participant
(other than due to physical or mental illness) to perform
substantially his duties as an employee of the Company or
any Subsidiary after reasonable notice to the Participant of
such failure, (ii) the Participant's engaging in serious
misconduct that is injurious to the Company or any
Subsidiary, (iii) the Participant's having been convicted
of, or entered a plea of nolo contendere to, a crime that
constitutes a felony or (iv) the breach by the Participant
of any written covenant or agreement with the Company or any
Subsidiary not to disclose any information pertaining to the
Company or any Subsidiary or not to compete or interfere
with the Company or any Subsidiary.
<P>
"Change in Control" means the occurrence of any of the
following events:
<P>
(1) the members of the Board at the beginning of any
consecutive twenty-four calendar month period (the
"Incumbent Directors") cease for any reason to constitute at
least a majority of the members of the Board, provided that
any director whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at
least a majority of the members of the Board then still in
office who were members of the Board at the beginning of
such twenty-four calendar month period other than as a
result of a proxy contest, or any agreement arising out of
an actual or threatened proxy contest, shall be treated as
an Incumbent Director; or
<P>
(2) any "person," including a "group" (as such terms are
used in Sections 13(d) and 14(d)(2) of the Act), the
Company, any Subsidiary or any employee benefit plan of the
Company or any Subsidiary is or becomes the "beneficial
owner" (as defined in Rule 13(d)(3) under the Act), directly
or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then
outstanding securities; or
<P>
(3) the stockholders of the Company shall approve a
definitive agreement (A) for the merger or other business
combination of the Company with or into another corporation,
a majority of the directors of which were not directors of
the Company immediately prior to the merger and in which the
stockholders of the Company immediately prior to the
effective date of such merger own a percentage of the voting
power in such corporation that is less than one-half of the
percentage of the voting power they owned in the Company
immediately prior to such transaction or (B) for the sale or
other disposition of all or substantially all of the assets
of the Company to any other entity; provided, in each case,
that such transaction shall have been consummated; or
<P>
(4) the purchase of Stock pursuant to any tender or
exchange offer made by any "person," including a "group" (as
such terms are used in Sections 13(d) and 14(d)(2) of the
Act), the Company, any Subsidiary, or an employee benefit
plan of the Company or any Subsidiary, for 20% or more of
the Stock of the Company.
<P>
Notwithstanding the foregoing, a "Change in Control" shall
not be deemed to occur in the event the Company files for
bankruptcy, liquidation or reorganization under the United
States Bankruptcy Code.
<P>
"Change in Control Price" means the highest price per share
of Stock offered in conjunction with any transaction
resulting in a Change in Control (as determined in good
faith by the Committee if any part of the offered price is
payable other than in cash) or, in the case of a Change in
Control occurring solely by reason of a change in the
composition of the Board, the highest Fair Market Value of
the Stock on any of the 30 trading days immediately
preceding the date on which a Change in Control occurs.
<P>
"Code" means the Internal Revenue Code of 1986, as amended.
<P>
"Committee" means the Compensation Committee of the Board,
the Board if it does not designate a Committee or such other
committee as the Board may from time to time designate to
administer the Plan (or in the absence of any such
designation, the Board), provided that following the IPO, if
an IPO is undertaken, any such committee shall consist of
two or more members, each of whom shall be a "Non-Employee
Director" within the meaning of Rule 16b-3, as promulgated
under the Act.
<P>
"Company" means Tidalwave Holdings Inc., a Florida
corporation, and any successor thereto.
<P>
"Disability" means, unless otherwise determined by the
Committee with respect to a particular Option, disability of
the Participant within the meaning of any long-term
disability plan maintained by the Company.
<P>
"Employee" means any employee of the Company or any
Subsidiary.
<P>
"Fair Market Value" means, on any date, the closing price of
the Stock on a national securities exchange (or on such
other recognized quotation system on which the trading
prices of the Stock are quoted at the relevant time) on such
date, provided that in the event that there are no Stock
transactions reported on such exchange (or such other
system) on such date, Fair Market Value shall mean the
closing price on the immediately preceding date on which
Stock transactions were so reported.
<P>
"IPO" means an initial public offering of the Company's
Stock, if undertaken.
<P>
"Option" means the right to purchase Stock at a stated price
for a specified period of time. For purposes of the Plan,
an Option may be either (i) an "Incentive Stock Option"
(ISO) within the meaning of Section 422 of the Code or (ii)
a "Nonstatutory Stock Option" (NSO). Unless the Committee
shall otherwise specify at the time of grant, any Option
granted hereunder shall be a Nonstatutory Stock Option.
<P>
"Participant" means any Employee designated by the Committee
to receive an Option under the Plan.
"Retirement" means termination of a Participant's employment
on or after the normal retirement date or, with the
Committee's approval, on or after any early retirement date
established under any retirement plan maintained by the
Company, or any Subsidiary in which the Participant
participates.
<P>
"Stock" means the common stock of the Company, par value
$0.001 per share.
<P>
"Subsidiary" means any corporation in which the Company
owns, directly or indirectly, stock representing 50% or more
of the voting power of all classes of stock entitled to vote
and any other business organization, regardless of form, in
which the Company possesses directly or indirectly 50% or
more of the total combined equity interests in such
organization.
<P>
(b) Gender and Number. Except when otherwise indicated
by the context, words in the masculine gender used in the
Plan shall include the feminine gender, the singular shall
include the plural, and the plural shall include the
singular.
<P>
3. Powers of The Committee
<P>
The Committee shall be responsible for the administration of
the Plan, including, without limitation, determining which
Employees receive Options, what kind of Options are granted
under the Plan and for what number of shares, and the other
terms and conditions of each such Option. The Committee may
establish different terms and conditions for different types
of Options, for different Participants receiving the same
type of Option and for the same Participant for each Option
such Participant may receive, whether or not granted at
different times. The Committee shall have the responsibility
of construing and interpreting the Plan and of establishing
and amending such rules and regulations as it may deem
necessary or desirable for the proper administration of the
Plan. Any decision or action taken or to be taken by the
Committee, arising out of or in connection with the
construction, administration, interpretation and effect of
the Plan and of its rules and regulations, shall, to the
maximum extent permitted by applicable law, be within its
absolute discretion (except as otherwise specifically
provided herein) and shall be conclusive and binding upon
the Company, all Participants and any person claiming under
or through any Participant.
<P>
4. Stock Subject to Plan
<P>
(a) Number. Subject to the provisions of Section 4(b) and
(c), the number of shares of Stock subject to Options under
the Plan may not exceed 5,000,000 shares of Stock, plus any
shares which, after the effective date of the Plan, become
available for Options under this Plan in accordance with
Section 4(b) below. Without limiting the generality of the
foregoing, whenever shares are received by the Company in
connection with the exercise of any Option granted under the
Plan, only the net number of shares actually issued shall be
counted against the foregoing limit. The shares to be
delivered under the Plan may consist, in whole or in part,
of treasury stock or authorized but unissued Stock not
reserved for any other purpose.
<P>
(b) Canceled, Terminated, or Forfeited Options. Any shares
of Stock subject to any Option granted hereunder which for
any reason is canceled, terminated or otherwise settled
without the issuance of any Stock shall be available for
further Options under the Plan.
<P>
(c) Adjustment in Capitalization. In the event of any
Stock dividend or Stock split, recapitalization (including,
without limitation, the payment of an extraordinary cash
dividend), merger, consolidation, combination, spin-off,
distribution of assets to stockholders, exchange of shares,
or other similar corporate change or other similar event
that affects the Stock such that an adjustment is required
to preserve, or to prevent enlargement of, the benefits or
potential benefits made available under this Plan, then the
Committee shall, in such manner as the Committee shall deem
equitable, adjust any or all of (i) the number and kind of
shares which thereafter may be optioned and sold under the
Plan (including, without termination, adjusting the limits
on the number and types of Options that may be made under
the Plan), (ii) the number and kinds of shares subject to
outstanding Options and (iii) the exercise price with
respect to any of the foregoing. Additionally, the Committee
may make provisions for a cash payment to a Participant or a
person who has an outstanding Option. However, the number of
shares subject to any Option shall always be a whole number.
<P>
5. Stock Options
<P>
(a) Grant of Options. Options may be granted to
Participants at such time or times as shall be determined by
the Committee. Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Nonstatutory
Stock Options, provided that no Incentive Stock Option shall
be granted to any Employee who is not eligible to receive
such an Option under Section 422 of the Code and the
regulations thereunder. The Committee shall have complete
discretion in determining the number of Options, if any, to
be granted to a Participant. Without limiting the foregoing,
the Committee may grant Options containing provisions for
the issuance to the Participant, upon exercise of such
Option and payment of the exercise price therefor with
previously owned shares of Stock, of an additional Option
for the number of shares so delivered. Each Option shall be
evidenced by an Option agreement (or contained in an
employment agreement) that shall specify the type of Option
granted, the exercise price, the duration of the Option, the
number of shares of Stock to which the Option pertains, and
such other terms and conditions not inconsistent with the
Plan as the Committee shall determine.
<P>
(b) Option Price. Unless otherwise determined by the
Committee at the time of grant, Options granted pursuant to
the Plan shall have an exercise price which is not less than
the Fair Market Value of a share of Stock on the date the
Option is granted.
<P>
(c) Exercise of Options. Options awarded under the Plan
shall be exercisable at such times and shall be subject to
such restrictions and conditions including the performance
of a minimum period of service or the satisfaction of
performance goals, as the Committee may impose, either at or
after the time of grant of such Options; provided that no
Option shall be exercisable for more than 10 years after the
date on which it is granted.
<P>
(d) Payment. The Committee shall establish procedures
governing the exercise of Options. No shares shall be
delivered pursuant to any exercise of an Option unless
arrangements satisfactory to the Committee have been made to
assure full payment of the option price therefor. Without
limiting the generality of the foregoing, the Committee may
provide, on such terms and conditions as the Committee
determines appropriate, that payment of the option price may
be made (i) in cash or its equivalent, (ii) by exchanging
shares of Stock owned by the optionee (which are not the
subject of any pledge or other security interest), (iii)
through an arrangement with a broker approved by the Company
whereby payment of the exercise price is accomplished with
the proceeds of the sale of Stock or (iv) by any combination
of the foregoing, provided that the combined value of all
cash and cash equivalents paid and the Fair Market Value of
any such Stock so tendered to the Company, valued as of the
date of such tender, is at least equal to such option price.
<P>
(e) Termination of Employment Due to Death, Disability or
Retirement. Unless otherwise determined by the Committee at
the time of grant, in the event a Participant's employment
terminates by reason of death, disability or retirement, any
Options granted to such Participant which are exercisable at
the date of his or her death, disability or retirement may
be exercised at any time prior to the earlier of the
expiration of the term of the Options or within one (1) year
(or such other period as the Committee shall determine at
the time of grant) following the Participant's termination
of employment. Unless otherwise determined by the Committee
at the time of grant, and Options which have not become
exercisable in accordance with the terms thereof shall be
cancelled upon the Participant's termination of employment.
<P>
(f) Termination of Employment for Any Other Reason. Unless
otherwise determined by the Committee at or after the time
of grant, in the event the employment of the Participant
shall terminate for any reason other than those described in
Section 5(e), any Options granted to such Participant which
are exercisable at the date of the Participant's termination
of employment shall be exercisable at any time prior to the
earlier of the expiration of the term of the Options or the
sixtieth day following the Participant's termination of
employment; provided that, if a Participant's employment is
terminated for Cause, all Options granted to such
Participant which are then outstanding shall be immediately
forfeited (whether or not then exercisable).
<P>
(g) Incentive Stock Options. Notwithstanding anything in
the Plan to the contrary, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under
the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code.
<P>
(h) Buyout. The Committee may at any time offer to buy out
an Option previously granted for a payment in cash, based on
such terms and conditions as the Committee shall establish
and communicate to the optionee at the time that such offer
is made.
<P>
6. Stock Grants. The Company may issue shares in the
Plan to employees for bonuses, past due salaries and current
salaries. Such shares shall be issued at the Fair Market
Value of the Company's common stock on the date that such
bonus, past due salary or current salary accrues.
<P>
7. Change in Control
<P>
(a) Accelerated Vesting and Payment. Subject to the
provisions of Section 7(b) below, in the event of a Change
in Control, each Option shall be, at the discretion of the
Committee, either canceled in exchange for a payment in cash
of an amount equal to the excess, if any, of the Change in
Control Price over the exercise price for such Option, or
fully exercisable regardless of the exercise schedule
otherwise applicable to such Option.
<P>
(b) Alternative Options. Notwithstanding Section 7(a), no
cancellation, acceleration of exercisability, vesting, cash
settlement or other payment shall occur with respect to any
Option if the Committee reasonably determines in good faith
prior to the occurrence of a Change in Control that such
Option shall be honored or assumed, or new rights
substituted therefor (such honored, assumed or substituted
option hereinafter called an "Alternative Option"), by a
Participant's employer (or the parent or a Subsidiary of
such employer) immediately following the Change in Control,
provided that any such Alternative Option must:
<P>
(i) provide such Participant (or each Participant in a
class of Participants) with rights and entitlements
substantially equivalent to or better than the rights, terms
and conditions applicable under such Option, including, but
not limited to, an identical or better exercise or vesting
schedule and identical or better timing and methods of
payment;
(ii) have substantially equivalent economic value to such
Option (determined at the time of the Change in Control);
<P>
(iii) have terms and conditions which provide that in the
event that the Participant's employment is involuntarily
terminated or constructively terminated, any conditions on a
Participant's rights under, or any restrictions on transfer
or exercisability applicable to, each such Alternative
Option shall be waived or shall lapse, as the case may be.
<P>
For this purpose, a constructive termination shall mean a
termination by a Participant following a material reduction
in the Participant's base salary or a Participant's
incentive compensation opportunity or a material reduction
in the Participant's responsibilities, in any such case,
without the Participant's written consent.
<P>
8. Amendment, Modification, And Termination of Plan
<P>
The Board at any time may terminate or suspend the Plan, and
from time to time may amend or modify the Plan, except that
no amendment, modification, or termination of the Plan shall
in any manner adversely affect any Option theretofore
granted under the Plan, without the consent of the
Participant to whom such Option was granted. Notwithstanding
the foregoing, the Board may not increase the total number
of shares of Stock subject to the Plan without shareholder
approval (except pursuant to Section 4(c)).
<P>
9. Miscellaneous Provisions
<P>
(a) Nontransferability of Options. Unless the Committee
shall permit (on such terms and conditions as it shall
establish) an Option to be transferred to a member of the
Participant's immediate family or to a trust or similar
vehicle for the benefit of such immediate family members
(collectively, the "Permitted Transferees"), no Option shall
be assignable or transferable except by will or the laws of
descent and distribution, and except to the extent required
by law, no right or interest of any Participant shall be
subject to any lien, obligation or liability of the
Participant. All rights with respect to Options granted to a
Participant under the Plan shall be exercisable during his
lifetime only by such Participant or, if applicable, the
Permitted Transferees. The rights of a Permitted Transferee
shall be limited to the rights conveyed to such Transferee,
who shall be subject to and bound by the terms of the
agreement or agreements between the Participant and the
Company.
<P>
(b) Beneficiary Designation. Each Participant under the
Plan may from time to time name any beneficiary or
beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be
paid or by whom any right under the Plan is to be exercised
in case of his death. Each designation will revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when
filed by the Participant in writing with the Committee
during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall
be paid to or exercised by the Participant's surviving
spouse, if any, or otherwise to or by his or her estate.
<P>
(c) No Guarantee of Employment or Participation. Nothing
in the Plan shall interfere with or limit in any way the
right of the Company, or any Subsidiary to terminate any
Participant's employment at any time, nor to confer upon any
Participant any right to continue in the employ of the
Company, or any Subsidiary. No Employee shall have a right
to be selected as a Participant, or, having been so
selected, to receive any future Options.
<P>
(d) Tax Withholding. The Company shall have the right to
deduct from all amounts paid to a Participant in cash
(whether under this Plan or otherwise) any taxes required by
law to be withheld in respect of Options under this Plan.
No shares shall be issued pursuant to any Option unless and
until arrangements satisfactory to the Committee shall have
been made to satisfy any withholding tax obligations
applicable with respect to such Option. Without limiting the
generality of the foregoing, the Company shall have the
right to retain, or the Committee may, subject to such terms
and conditions as it may establish from time to time, permit
Participants to elect to tender, Stock (including Stock
issuable in respect of an Option) to satisfy, in whole or in
part, the amount required to be withheld.
<P>
(e) Compliance with Legal and Exchange Requirements. The
Plan, the granting and exercising of Options thereunder, and
the other obligations of the Company under the Plan, shall
be subject to all applicable Federal and State laws, rules,
and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its
discretion, may postpone the granting and exercising of
Options, the issuance or delivery of Stock under any Option
or any other action permitted under the Plan to permit the
Company, with reasonable diligence, to complete such stock
exchange listing or registration or qualification of such
Stock or other required action under any Federal or State
law, rule, or regulation and may require any Participant to
make such representations and furnish such information as it
may consider appropriate in connection with the issuance or
delivery of Stock in compliance with applicable laws, rules,
and regulations. The Company shall not be obligated by
virtue of any provision of the Plan to recognize the
exercise of any Option or to otherwise sell or issue Stock
in violation of any such laws, rules, or regulations; and
any postponement of the exercise of any Option under this
provision shall not extend the term of such Options, and
neither the Company nor its directors or officers shall have
any obligation or liability to the Participant with respect
to any Option (or Stock issuable thereunder) that shall
lapse because of such postponement.
<P>
(f) Indemnification. Each person who is or shall have been
a member of the Committee or of the Board shall be
indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or
proceeding to which he may be made a party or in which he
may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts
paid by him in settlement thereof, with the Company's
approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided
he shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes
to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which
such persons may be entitled under the Company's Articles of
Incorporation or By-laws, by contract, as a matter of law,
or otherwise.
<P>
(g) Effective Date. Subject to the approval of the
shareholders of the Company, the Plan shall be effective on
November 1, 2000. No Options may be granted under the Plan
after October 31, 2001. Notwithstanding same, if any
employment agreement or similar agreement grants options to
an employee of the Company prior to filing of an S-8
Registration Statement with the Securities and Exchange
Commission, such options may be issued pursuant to such S-8
filing. In addition, Stock grants issued in accordance with
Section 6 of this Plan may be for bonuses or past due
salaries that accrued prior to November 1, 2000.
<P>
(h) No Limitation on Compensation. Nothing in the Plan
shall be construed to limit the right of the Company to
establish other plans or to pay compensation to its
employees, in cash or property, in a manner which is not
expressly authorized under the Plan.
<P>
(i) Deferrals. The Committee may postpone the exercising
of Options, the issuance or delivery of Stock under any
Option or any action permitted under the Plan to prevent the
Company or any Subsidiary from being denied a Federal income
tax deduction with respect to any Option other than an
Incentive Stock Option.
<P>
(j) Governing Law. The Plan shall be construed in
accordance with and governed by the laws of the State of
Florida, without reference to principles of conflict of laws
which would require application of the law of another
jurisdiction.
<P>
(k) No Impact On Benefits. Except as may otherwise be
specifically stated under any employee benefit plan, policy
or program, no amount payable in respect of any Option shall
be treated as compensation for purposes of calculating an
Employee's right under any such plan, policy or program.
<P>
(l) No Constraint on Corporate Action. Nothing in this
Plan shall be construed (i) to limit, impair or otherwise
affect the Company's right or power to make adjustments,
reclassifications, reorganizations or changes of its capital
or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of
its business or assets or (ii) except as provided in Section
7, to limit the right or power of the Company, or any
Subsidiary to take any action which such entity deems to be
necessary or appropriate.
<P>
