[LOGO]
NOTICE OF SPECIAL MEETING OF THE STOCKHOLDERS
To the Shareholders:
Date of Special Meeting
A Special Meeting of the Shareholders of I-Tech Holdings Group, Inc. (the
"Company") will be held on Wednesday, May 5, 1999 at 9:30 a.m. local time at the
principal offices of the Company at 1000-789 W. Pender Street, Vancouver, B.C.
Canada V6C 1H2 or at any adjournments or postponements thereof (the "Special
Meeting").
Purpose of the Special Meeting
At the Special Meeting, you will be asked to consider and vote upon the
following proposals:
(1) an amendment to the Company's Articles of Amendment and Restatement of
the Articles of Incorporation (the "Articles of Incorporation") deleting
Articles XV of the Articles of Incorporation.
(2) an amendment to the Articles of Incorporation changing the name of the
Corporation from "I-Tech Holdings Group, Inc." to "Stockgroup.com, Inc.";
(3) an amendment to the Company's By-Laws permitting shareholder actions to
be taken by written consent, if all of the Company's shareholders consent
in writing;
(4) the Company's 1999 Incentive Stock Option Plan; and
(5) such other matters as may properly come before the Special Meeting.
Record Date
The Board of Directors of the Company has fixed the close of business on
March 16, 1999 as the record date (the "Record Date") for the determination of
the Company's stockholders entitled to notice of and to vote at the Special
Meeting. Only holders of shares of record at the close of business on the Record
Date will be entitled to notice of and to vote at the Special Meeting or any
adjournments or postponements thereof. You may inspect the list of all the
shareholder entitled to notice of the Special Meeting at the offices of Sierchio
& Albert, P.C. 41 East 57th Street, New York, New York 10022; or at the
principal offices of the Company at 1000-789 W. Pender Street, Vancouver, B.C.
Canada V6C 1H2.
All shareholders are cordially invited to attend the special meeting.
However, we are not asking you for a proxy or written consent and you are
requested not to send us a proxy or written consent.
By Order of the Board of Directors,
-----------------------------------
Marcus New
<PAGE>
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Definitive Information Statement
I-TECH HOLDINGS GROUP, INC.
(Name of Registrant As Specified in Charter)
I-TECH HOLDINGS GROUP, INC.
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form of Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.
(3) Filing Party:
(4) Date Filed:
<PAGE>
I-TECH HOLDINGS GROUP, INC.
----------
Special Meeting of Shareholders
to be held on May 5, 1999
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY OR WRITTEN CONSENT AND YOU ARE REQUESTED
NOT TO SEND US A PROXY OR WRITTEN CONSENT
This Information Statement (the "Information Statement") and the Notice of
a Meeting dated April 16, 1999 (the "Notice of Meeting") are being furnished to
the Shareholders (the "Shareholders") of I-Tech Holdings Group, Inc., a Colorado
corporation (the "Company") in connection with the Special Meeting of the
Shareholders to be held on Wednesday, May 5, 1999 at 9:30 a.m. local time at the
principal offices of the Company at 1000-789 West Pender Street, Vancouver, B.C.
Canada V6C1H2 or at any adjournments or postponements thereof (the "Special
Meeting"). The Company's Board of Directors has fixed the close of business on
March 16, 1999 as the record date (the "Record Date") for determining the
Shareholders entitled to notice of and to vote at the Special Meeting.
At the Special Meeting, the Shareholders will consider and vote upon the
following proposals:
(1) an amendment of the Company's By-Laws permitting shareholder actions to
be taken by written consent if all of the Company's shareholders consent in
writing;
(2) an amendment of the Company's Articles of Amendment and Restatement of
the Articles of Incorporation (the "Articles of Incorporation") deleting
Article XV of the Articles of Incorporation;
(3) an amendment of the Articles of Incorporation changing the name of the
Corporation from "I-Tech Holdings Group, Inc." to "Stockgroup.com, Inc.";
(4) the Company's 1999 Incentive Stock Option Plan; and
(5) such other matters as may properly come before the Special Meeting.
This Information Statement (along with the Notice of Meeting) is being
mailed on April 16, 1999 to the Company's shareholders of record on the Record
Date.
The principal executive offices of the Company are located at 1000-789 W.
Pender Street, Vancouver, British Columbia, Canada V6C 1H2 and its telephone and
facsimile numbers are, respectively (604) 331-0995 and (604) 331-1194.
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Contents
Page
Recent Corporate Developments.................................................3
1. Acquisition of Stock Research Group Inc...................................3
2. Stock Group's Business....................................................4
Dissenter's Rights ...........................................................5
Market for the Company's Common Stock.........................................5
Proposals to be Considered and Voted on at the Special Meeting................7
Proposal No. I Amendment of By-laws - Unanimous Written Consent.........7
Proposal No. II Amendment of the Articles of Incorporation -.............8
...Deletion of Article XV
Proposal No. III Amendment of the Articles of Incorporation -.............9
...Name Change
Proposal No. IV Ratification and Approval of the 1999
...Incentive Stock Option Plan............................9
Other Matters to be Considered at the Special Meeting.........................14
Additional Information........................................................14
Incorporation of Certain Documents by Reference...............................15
The date of this Information Statement is April 16, 1999.
2
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RECENT CORPORATE DEVELOPMENTS
1. Acquisition of Stock Research Group Inc.
Pursuant to a Share Exchange and Share Purchase Agreement dated March 11,
1999 (the "SEA") among the Company, 579818 B.C. Ltd., a British Columbia, Canada
corporation wholly-owned by the Corporation (the "Subsidiary"), Stock Research
Group Inc., a British Columbia, Canada corporation ("Stock Group") and all of
the shareholders of Stock Group, (the "Stock Group Shareholders"), the Company
acquired all of the outstanding shares of Stock Group from the Stock Group
Shareholders in exchange for the issuance:
o by the Subsidiary to the Stock Group Shareholders, on a pro-rata
basis, of 3,900,000 Class A Exchangeable Shares (the "Exchangeable
Shares"); and
o by the Company to Stocktrans, Inc. as trustee for the Stock Group
Shareholders (the "Trustee") of 3,900,000 shares of common stock (the
"Company's Shares") to be held in trust under the terms of the an
Exchange and Voting Agreement dated March 11, 1999 (the "Trust
Agreement") among the Company, the Trustee, the Subsidiary and the
Stock Group Shareholders.
As a result of these transactions, each of the Stock Group Shareholders has
the right to vote (or to direct the Trustee to vote on behalf of such Stock
Group Shareholder) a number of the Company's Shares equal to the number of
Exchangeable Shares owned by such Stock Group Shareholder. Since the Shares
issued to the Trustee represent approximately 56% of all of the Company's
outstanding shares, the Stock Group Stockholders have effective control of the
Company. In addition, five Stock Group Shareholders have the right to vote or
direct the vote of more than 5% of its outstanding shares. These shareholders
are:
Mr. Marcus New (the Company's Chairman of the Board and Chief
Executive Officer) and his wife, Yvonne New, directly and indirectly
through 518464 B.C. Ltd. (a company owned by Mr. New as to 50% and his wife
Yvonne New as to 50%) own a total of 2,745,000 Exchangeable Shares and have
the right to direct the vote of 2,745,000 of the Company's Shares. This
represents approximately 39% of the outstanding common stock; and
Mr. Craig Faulkner (the Company's Chief Technology Officer and a
director) directly and indirectly through 569358 B.C. Ltd. owns a total of
915,000 Exchangeable Shares and thus has the right to direct the vote of
915,000 of the Company's Shares. This represents approximately 13% of the
Company's issued and outstanding common stock.
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Accordingly, Mr. New and his wife, Yvonne New, along with Mr. Faulkner, may
direct the vote of 3,660,000 of the Company's Shares or approximately 52% of the
Company's outstanding shares; and accordingly may exercise control of the
Company.
You should read the section of this Information Statement entitled
"Security Ownership of Certain Beneficial Owners and Management" for additional
information as to share ownership by the Company's officers and directors.
Following the acquisition of Stock Group, Mr. New and Mr. Faulkner were
appointed to the Company's Board of Directors. In addition, Mr. New was elected
to serve as the Company's Chairman of the Board, President and Chief Executive
officer and Mr. Faulkner was elected to serve as the Company's Chief Technology
Officer; Mr. John Dawe was elected to serve as the Company's Vice President of
Finance, Secretary and Treasurer and Mr. Les Landes was elected to serve as the
Company's Chief Operating Officer.
The Company's current directors and officers are set forth in the following
table:
NAME POSITION
Marcus New Chairman of the Board, President and Chief
Executive Officer
Craig Faulkner Director and Chief Technology Officer
Gerald H. Trumbule, Ph.D Director
Clark Burch Director
Les Landes Chief Operating Officer
John Dawe Vice President of Finance, Secretary and
Treasurer
2. Stock Group's Business
Stock Group is an Internet based provider of comprehensive business and
financial information to the small and micro cap financial markets. Since 1995
Stock Group has focused on small cap companies and currently hosts, creates and
disseminates information to more than 150,000 Internet visitors monthly, which
information includes detailed profiles of companies, industry news, stock
quotes, charts, daily market reports, news releases and other investment tools.
In addition Stock Group, through its own on-line industry focused community of
Internet sites, believes that it has become a primary provider of timely,
accurate investment information in selected industries to small cap investors.
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With over 150,000 viewers and over 70 million "hits" per month, Stock Group
is among the top 1% of internet sites for traffic. With over 200 clients, Stock
Group believes that it hosts the largest small cap company community site in
North America.
Stock Group currently generates its income from three sources; Internet
services, marketing services and corporate advertising. In addition to web site
creation and monthly maintenance for its corporate clients, Stock Group offers
other web services including private label quotes and charts which allow viewers
to see stock information without leaving the public company's investment site.
To assist small cap companies to gain greater exposure, Stock Group markets
the following services:
placement of clients' sites on Stock Group's proprietary financial internet
communities;
access to Stock Group's proprietary E-mail listing of over 21,000 persons.
Stock Group has recently started generating revenue by offering advertising
space on its sites. In addition Stock Group provides advertising management and
design services with respect to the design, hosting and maintenance of investor
relations websites by small cap companies.
NO DISSENTERS' RIGHTS
Under applicable provisions of the Colorado Corporations Code (the
"Colorado Code") shareholders are not entitled to dissenters' rights or
appraisal rights with respect to the matters to be considered and voted upon at
the Special Meeting.
MARKET FOR THE COMPANY'S COMMON STOCK
The Company's common stock has been quoted for trading on the Over the
Counter Bulletin Board (the "OTCBB") since March 17, 1999. Accordingly, there
has been a limited public market for the Company's Common Stock. Since trading
commenced on March 17, 1999 through April 5, 1999, the high and low closing
prices of the Company's common stock on the OTCBB were $10.25 and $5.00
respectively.
SHARE OWNERSHIP
The following table contains certain information regarding the beneficial
ownership of the Company's Common Stock as of March 16, 1999 by:
o each executive officer and director of the Company
o all current directors and executive officers of the Company as a
group, and
o each person who is known by the Company to beneficially own 5% or more
Common Stock.
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Unless otherwise indicated in the footnotes to the table, Common Stock
is owned directly, and the indicated person has sole voting and investment
power. Unless otherwise indicated in the tables, the business address of each
person listed below is c/o Stock Research Group, Inc., 1000-789 W. Pender
Street, Vancouver, British Columbia, Canada V6C 1H2.
<TABLE>
<CAPTION>
Name and Address Position Shares Percentage of
Beneficially Shares
Owned
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Marcus New Chief Executive Officer and Director 2,745,000(1)(3) 39%
Craig Faulker Chief Technology Officer and 915,000(2)(3) 13%
Director
Gerald H. Trumbule, Ph.D Director 1,000 .01%
1629 York Street
Denver, Colorado 80206
Clark Burch Director 1,000 .01%
529 Cherokee Street
Denver, Colorado 80204
Leslie Landes Chief Operating Officer Nil (2) -
John Dawe Chief Financial Officer and Secretary Nil (3) -
Yvonne New (4) 2,745,000(1) 39%
518464 B.C. Ltd. (5) 2,745,000 39%
569358 B.C. Ltd. (6) 650,000 10%
Directors and Officers as a Group (6 3,660,000 52%
Persons)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Mr. Marcus New (the Company's Chairman of the Board, President and Chief
Executive Officer) and his wife, Yvonne New, directly and indirectly through
518464 B.C. Ltd. (a company owned by Mr. New as to 50% and his wife Yvonne New
as to 50%) own a total of 2,745,000 Exchangeable shares and accordingly have the
right to direct the vote of 2,745,000 of the Company's Shares which represent
approximately 39% of the Company's issued and outstanding common stock.
2. Mr. Craig Faulkner (the Company's Chief Technology Officer and a director)
directly and indirectly through 569358 B.C. Ltd. owns a total of 915,000
Exchangeable Shares and accordingly has the right to direct the vote of 915,000
of the Company's Shares which represent approximately 13% of the Company's
issued and outstanding common stock.
3. Mr. New, Mr. Faulkner and Mr. John Dawe, subject to shareholder approval of
the Company's 1999 Incentive Stock Option Plan, have been granted options to
purchase 325,000, 195,000 and 15,000 shares, respectively, of the Company's
common stock at $2.50 US per share. Mr. Les Landes has been granted, subject to
shareholder approval of the Company's 1999 Incentive Stock Option Plan, options
to purchase 745,800 shares of the Company's common stock at a price of $0.01 US
per share as to 105,000 shares and $0.94 US per share as to the balance. The
options have a 5 year term. These options were granted by the Company as of
March 11, 1999 in replacement of options (in equal number and on the same terms
and conditions as options granted by the Company's wholly-owned subsidiary as at
August 1998 as to Mr. Landes and as at January 1, 1999 for all other grantees
(the "date of grant")). Twenty (20%) percent of the options granted by the
Company will commence to vest (and thereafter be exercisable) on each
anniversary of the date of grant. However, as to Mr. Landes, the options may be
exercised, to the extent vested, only after 2 years from the date of grant. In
addition, 106,800 of Mr. Landes' options to purchase shares at a price of $0.94
US will vest and be exercisable only if
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the Company attains certain performance levels in each of the fiscal years
ending December 31, 2000 and 2001. To date none of the options granted have
vested.
4. Yvonne New is Marcus New's wife. Mrs. New owns 250,000 shares directly and
2,245,000 shares indirectly through her 50% ownership of 518464 B.C. Ltd.
5. 518464 B.C. Ltd. is a private company owned 50% by Marcus New and 50% by
Yvonne New, his wife.
6. 569358 B.C. Ltd. is a private company wholly-owned by Craig Faulker.
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<PAGE>
PROPOSALS TO BE CONSIDERED AND VOTED ON
AT THE SPECIAL MEETING
The following proposals will be considered and voted upon by the
Shareholders at the Special Meeting.
PROPOSAL I
Amendment of the By-Laws
Section 9 of the Company's By-Laws reads as follows:
"(a) Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at
any annual or special meeting of such shareholders, may be taken
without a meeting, without prior notice and without a vote, if a
consent in writing, setting for the action so taken, shall be signed
by the holders of outstanding stock having not less than the minimum
number of votes that would [be signed by the holders of outstanding
stock having not less than the minimum number of votes that would] be
necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. If any class
of shares is entitled to vote thereon as a class, such written consent
shall be required of the holders of a majority of the shares of each
class of shares entitled to vote thereon.
(b) Within ten (10) days after obtaining such authorization by written
consent, notice must be given to those shareholders who have not
consented in writing. The notice shall fairly summarize the material
features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters'
rights are provided under the Colorado Business Corporation Act, the
notice shall contain a clear statement of the right of the
shareholders dissenting therefrom to be paid the fair value of their
shares upon compliance with further provisions of the Colorado
Business Corporation Act regarding the rights for dissenting
shareholders."
We believe that Section 9 of the Company's By-laws is not consistent with
the provisions of the Colorado Code permitting any action of the shareholders of
a Colorado corporation to be taken without a meeting of such shareholder if all
of the shareholders entitled to vote on such action thereon consent to such
action in writing.
Accordingly, we have proposed for consideration and approval by the
Shareholders that Section 9 of the Company's By-laws be deleted and the
following substituted in its place:
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"Unless the Articles of Incorporation require that such action be
taken at a shareholders' meeting, any action required or permitted to be
taken at a shareholders meeting may be taken subject to compliance with
applicable law without a meeting if all of the shareholders entitled to
vote thereon consent to such action; anything herein to the contrary
notwithstanding if at any time hereafter the provisions of the Colorado
Corporations Code permit shareholder action to be taken by written consent
of less than all of the Company's shareholders, these By-laws shall be
deemed to permit shareholder action by written consent to be taken by such
lesser number of shareholders."
PROPOSAL II
Amendment to the Articles of Incorporation
deleting Article XV thereof
Article XV of the Articles of Incorporation provides:
"Inasmuch as both the Corporation Business Corporation Act and these
Articles of Incorporation both require shareholder action to amend these
Articles of Incorporation, should the directors of this corporation amend
these Articles whereby the name of this corporation is changed without
actual notice to the shareholders, each officer and each director present
at the meeting whereby such action is taken and voting therefor shall be
personally, jointly and severally liable per se to each shareholder for
breach of fiduciary duty (notwithstanding any language to the contrary
herein). The damages shall accrue as to the date of such action taken, and
shall be computed as follows: each shareholder shall be entitled to recover
an amount equal the highest price per share at which this corporation's
stock is publicly quoted at any time six months prior to such action taken
to six months after such action taken, if this corporation's stock is
publicly traded; and if the corporation's stock is not so publicly traded,
an amount of five dollars ($5.00) per share. Although the purpose of this
Article is to strictly prevent the officers and directors from taking
action to harm any or all of this corporation's shareholders, it shall be
no defense to any shareholder action brought pursuant to this Article that
the shareholder(s) was not harmed by such action."
Generally, under applicable Colorado Code the Company's name (except for
minor changes reflecting changes in corporate designations such as "Inc.,"
"Corp.," or "Corporation" or changes deleting or adding a descriptive geographic
term) may only be changed by action of the Company's shareholders. If such
action is taken by written consent under Colorado Code all shareholders must
consent; if such action is taken at a meeting of the shareholders, notice of
such meeting (including the purpose of the meeting) must be timely given to all
shareholders of record as of the record date set by the Company's Board of
Directors. We believe that Article XV, in its current form
o does not enhance shareholder notice requirements; and
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o creates uncertainty as to its meaning, application and our
responsibility thereunder.
Accordingly, we have adopted a resolution referring to the shareholders for
consideration and vote a proposal to amend the Articles of Incorporation by
deleting Article XV thereof and authorizing the Company's officers to prepare
and file (as soon as practicable after the date of the Special Meeting) a
Certificate of Amendment to the Articles of Incorporation and such other
documentation as is required under the Colorado Code to reflect such action.
PROPOSAL III
Amendment to the Articles of Incorporation -
Name Change
In light of the Company's acquisition of Stock Group and the nature of the
Company's business focus, we believe a change of the Company's name from "I-Tech
Holdings Group, Inc." to "Stockgroup.com, Inc." will better reflect and be more
descriptive of the Company's business activities.
Accordingly, in light of Article XV discussed above we have adopted a
resolution referring to the Shareholders for consideration and approval a
proposal to amend the Articles of Incorporation so as to change the name of the
Company from "I-Tech Holdings Group, Inc." to "Stockgroup.com, Inc."
PROPOSAL IV
1999 Incentive Stock Option Plan
On March 11, 1999 the Board of Directors adopted, subject to Shareholder
approval the Company's ratification of the 1999 Incentive Stock Option Plan and
allocated certain options thereunder. At the Special Meeting, shareholders will
be asked to vote to approve the Company's 1999 Incentive Stock Option Plan and
our initial allocation and grant ofthe options to: Mr. Marcus New in the amount
of 325,000; Mr. Craig Faulker in the amount of 195,000; Mr. Leslie Landes in the
amount of 745,800; and to Mr. John Dawes in the amount of 15,000.
Purpose of the Plan. The purpose of the 1999 Incentive Stock Option Plan is
to enhance the value of the shareholders' investment in the Company by
encouraging key employees, directors and/or consultants, upon whose performance
the Company and its subsidiaries is largely dependent for the successful conduct
of its operations, to acquire and retain a financial interest in the Company. In
addition, the 1999 Incentive Stock Option Plan is intended to enable the Company
and its subsidiaries to compete effectively for and retain the services of such
employees, directors and/or consultants.
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Vote Required. If a majority of the shares of common stock entitled to vote
at the meeting are voted for the Company's 1999 Incentive Stock Option Plan, the
Plan will be ratified and approved.
Summary of the Plan. Here is a summary of the significant terms of the 1999
Incentive Stock Option:
Total Number of Shares Covered ........ 2,000,000
Administration ........................ Board of Directors (or committee
appointed by the Board of Directors)
administers the Plan.
Eligible Persons ...................... Directors, officers and employees and
consultants of the Company.
Exercise Price ........................ Generally the closing price of the
Company's common stock on the date we
grant the option, but could be as low as
75% of the closing price or lower.
Options ............................... We may issue incentive stock options (an
"ISO") under Section 422 of the Internal
Revenue Code or non-qualified options or
both.
Term of Options ....................... Generally 10 years, but could be a
shorter period.
Vesting of Options .................... Options will generally vest over a
five-year period, with 20% of the
options becoming exercisable on each
anniversary of the date the option was
granted. But we can alter this vesting
schedule.
Exercise of Options ................... The holder of an option can choose to
pay the exercise price of the option in
cash, with the Company's common stock
(valued at the closing price of the
common stock on the exercise date) or by
any other legal consideration we may
deem appropriate.
Transferability ....................... Options are not transferable except by
will or by interstate succession.
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Acceleration of
Vesting of Options .................... Generally, if a Change in Control (as
defined in the Plan) occurs, the options
will vest immediately and become
exercisable in full.
Term of Plan .......................... The Plan will expire on March 11, 2009,
unless we terminate it earlier.
Other Terms and Conditions
of Options .......................... We may impose additional terms modifying
the conditions on exercise of incentive
award as we may deem appropriate.
Restricted Stock ...................... We may award restricted stock containing
limitations on sale or transfer of the
shares. Subject to those restrictions
and any other conditions imposed by us,
the Participant enjoys all of the other
rights of a shareholder, including the
right to receive dividends and to vote
the shares.
Upon vesting, previously restricted
stock becomes freely tradable without
restriction by the plan. Upon
termination of employment, the employee
forfeits restricted stock which has not
vested unless the plan or we provide
otherwise. Upon a Change in Control (as
defined in the plan) we can provide for
the restrictions lapse immediately, with
full vesting of the maximum number of
performance-based or other variable
awards as if maximum performance levels
were achieved.
Restrictions on Transfer .............. Officers subject to the short-swing
trading rules, directors and owners of
10% or more of our shares must comply
with restrictions on vesting, the number
of shares which they can buy or sell and
restrictions on trading in shares within
6 months of certain other trades. We
urge you to seek legal guidance before
entering into any transactions involving
shares if you are subject to those
restrictions.
Federal Income Tax Consideration ...... The following summary describes the U.S.
federal income tax consequences of the
plan, based on current statutes,
regulations and interpretations.
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This description is not intended to
address your specific tax consequences
or special rules that may apply to our
directors and executive officers. We
urge you to seek legal and tax guidance
to understand how the tax laws affect
your individual circumstances.
Options ............................... Holders will recognize no income and the
Company will not be entitled to a
deduction when we grant either
non-qualified or incentive stock
options. Non-qualified options are those
that do not qualify as incentive stock
options. On exercise of a non-qualified
option, the holder recognizes as
ordinary income the difference between
the fair market value of the shares on
the exercise date and the market value
of the shares on the exercise date and
the option exercise price. Subject to
reporting requirements and any deduction
limitation under Section 162(m) of the
Internal Revenue Code, we will receive a
deduction for that amount. Disposition
of shares by the holder after exercise
of a non-qualified option ordinarily
results in a capital gain or loss.
On exercise of an ISO, the holder will
not recognize any income, and we will
not receive a deduction, unless the
holder does not satisfy the holding
period requirements discussed in the
next paragraph. The exercise of an ISO,
however, may result in an alternative
minimum tax liability to the holder.
The disposition of shares acquired on
exercise of an ISO will ordinarily
result in capital gain or loss. If the
holder, however, disposes of those
shares within 2 years after the date of
grant or 1 year after the date of
exercise, the holder will recognize
ordinary income for the excess of the
fair market value of the shares on the
exercise date over the option exercise
price, or in certain circumstances the
gain on sale, if less. Any gain not
treated as ordinary income generally
will be capital gain. Subject to
reporting requirements, the Company will
receive a deduction for
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ordinary income recognized by the
holder, unless limited by Section
162(m).
If the holder pays for an option with
previously owned shares, that exercise
generally will not be a taxable sale of
the previously owned shares. The holder
will recognize no gain or loss on the
previously owned shares on exercise of
the option. Instead, the holder retains
a carryover basis in the new shares. If
the previously owned shares were
acquired on the exercise of an ISO or
other tax-qualified stock option, and
the holding requirement for those shares
is not satisfied by that time, that use
will disqualify ISO status of the shares
previously owned. The holder would then
recognize ordinary income on the ISO
shares surrendered, but under proposed
Treasury Regulations not any additional
capital gain, in the amount described
above.
Section 162(m) generally limits
deductibility of any compensation above
$1 million paid to a person who would be
an officer named in the Summary
Compensation Table during a given year,
unless certain exception.
Restricted Stock
Code, a person ........................ Under Section 83(b) of the Internal
Revenue receiving restricted stock may
elect to include in ordinary income, as
compensation at the time restricted
stock is first issued, the excess of the
fair market value of those shares at the
time of issuance over the amount paid,
if any, by the person for the shares.
Subject to reporting and Section 162(m)
limits, the Company will receive a
deduction for that amount. The person
making that election must file copies
with the Internal Revenue Service and
send us a copy of the election form. If
the person makes a Section 83(b)
election, he or she will generally
recognize capital gain or loss when
disposing of those shares.
Unless a Section 83(b) election is made,
the owner of the restricted stock
generally will not
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recognize taxable income until the
shares are no longer subject to the
restrictions or the risk of forfeiture.
When either the restrictions or the risk
of forfeiture lapses, the person will
recognize ordinary income for the excess
of the fair market value of the shares
on the vesting date over the amount
paid, if any, for the shares. Subject to
reporting and Section 162(m) limits, we
will receive a deduction for that
amount. Restricted stock holders are
taxed as receiving ordinary income on
receipt of any cash dividends or other
distributions paid with respect to those
shares before they vest.
Restrictions on Transfer .............. Officers subject to the short-swing
trading rules, directors and owners of
10% or more of our shares must comply
with restrictions on vesting, the number
of shares which they can buy or sell and
restrictions on trading in shares within
6 months of certain other trades. We
urge you to seek legal guidance before
entering into any transactions involving
shares if you are subject to those
restrictions.
Allocations ........................... Subject to shareholder approval of the
plan and our initial allocation of
options, we have granted options to
acquire up to 1,280,800.
Other Matters to be Considered
at the Special Meeting
At the date of mailing of this Information Statement we know of no other
business to be presented at the Special Meeting.
Additional Information
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. information as of particular dates
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interests of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Stockholder and filed
with the Commission.
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Such reports, proxy statements and other information should be available
for inspection at the public reference facilities of the commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional office of the
Commission located at Seven World Trade Center, Suite 1300, New York, N.Y. 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such information should be obtainable by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains
a website on the internet at http://www.sec.gov that contains reports, proxy
statements and other information relating to the Company and Purchaser which
have been filed via the Commission's EDGAR System.
Incorporation of Certain Documents by Reference
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference.
1. The Annual Report of the Company on Form 10-K for its fiscal year ended
December 31, 1998;
2. The Company's Current Reports on Form 8-K, dated March 19, 1999 (filed
March 19, 1999), and March 23, 1999 (filed March 24, 1999).
In addition, all reports and other documents subsequently filed by the
Company with the Commission pursuant to Sections 13(a), 14 or 15(d) of the
Exchange Act prior to the date of the Special Meeting shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Information Statement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Information Statement except as so modified or
superseded.
The Company will provide, without charge, to each person who receives this
Information Statement, upon the written or oral request of such person, a copy
of such documents incorporated herein by reference (not including exhibits to
such information unless the exhibits themselves are specifically incorporated by
reference). Requests for documents should be made as specified above.
By order of the Board of Directors
(SIGNATURE)
Marcus New
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I-TECH HOLDINGS GROUP, INC.
1999 INCENTIVE STOCK OPTION PLAN
1. Purposes of the Plan.
The purposes of this Plan are to (i) attract and retain the best available
personnel for positions of responsibility within I-Tech Holdings Group, Inc.
(the "Company"), (ii) provide additional incentives to Employees of the Company,
(iii) provide "Directors", "Consultants" and "Advisors" of the Company with an
opportunity to acquire a proprietary interest in the Company to encourage their
continued provision of services to the Company, and to provide such persons with
incentives and regards for superior performance more directly linked to the
profitability of the Company's business and increases in shareholder value, and
(iv) generally, to promote the success of the Company's business and the
interests of the Company and all of its stockholders, through the grant of
options to purchase shares of the Company's Common Stock and other incentives.
Incentive benefits granted hereunder may be either Incentive Stock Options,
Non-qualified Stock Options, Stock Appreciation Rights, stock awards, restricted
stock or cash awards, as such terms are hereinafter defined. The types of
options or other incentives granted shall be reflected in the terms of written
agreements.
2. Definitions.
As used herein, the following definitions shall apply:
2.1 "Base Price" means the value determined by the Board or the Committee
to be used as the basis for determining the Spread upon the exercise of a
Free-Standing Stock Appreciation Right, and shall be expressed as the Fair
Market Value per share on the Date of Grant of the Stock Appreciation Right or a
percentage of such Fair Market Value per share.
2.2 "Board" shall mean the Board of Directors of I-Tech Holdings Group,
Inc.
2.3 "Change of Control" means a change in ownership or control of the
Company effected through either of the following transactions:
(a) the direct or indirect acquisition by any person or related group of
persons (other than by the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer
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made directly to the Company's shareholders, or other transaction, in each case
which the Board does not recommend such shareholders to accept; or
(b) a change in the composition of the Board over a period of 24
consecutive months or less such that a majority of the Board members (rounded up
to the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board; or
(c) a Corporate Transaction as defined below.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder.
2.5 "Committee" shall mean the Committee appointed by the Board in
accordance with Section 4.1 of the Plan, if one is appointed.
2.6 "Common Stock" or "Common Shares" shall mean (i) shares of the Common
Stock, no par value, of the Company described in the Company's Articles of
Incorporation, as amended, and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 12 of this Plan.
2.7 "Company" shall mean I-Tech Holdings Group, Inc., a Colorado
corporation, and shall include any parent or subsidiary corporation of the
Company as defined in Sections 424(e) and (f), respectively, of the Code.
2.8 "Consultants" and "Advisors" shall include any third party retained or
engaged by the Company to provide service to the Company, including any employee
of such third party providing such services.
2.9 "Corporate Transaction" means any of the following shareholder-approved
transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(b) the sale, transfer or other disposition of all or substantially all of
the assets of the Company in complete liquidation or dissolution of the Company;
or
(c) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than 50% of the total combined voting power of
the
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Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
merger.
2.10 "Date of Grant" means the date specified by the Board or the Committee
on which a grant of Options, Stock Appreciation Rights, Performance Shares of
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective.
2.11 "Deferral Period" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 10.3 of this Plan.
2.12 "Deferred Shares" means an award pursuant to Section 10 of this Plan
of the right to receive Common Shares at the end of a specified Deferral Period.
2.13 "Director" shall mean a member of the Board.
2.14 "Effective Date" means the effective date of this Plan as provided in
Section 6.
2.15 "Employee" shall mean any person, including officers and directors,
employed by the Company. The payment of a director's fee by the Company shall
not be sufficient to constitute "employment" by the Company.
2.16 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.17 "Fair Market Value" shall mean, with respect to the date a given
Option is granted or exercised, the value of the Common Stock determined by the
Board in such manner as it may deem equitable for Plan purposes but, in the case
of an Incentive Stock Option, no less than is required by applicable laws or
regulations; provided, however, that where there is a public market for the
Common Stock, the fair Market Value per share shall be the average of the bid
and asked prices of the Common Stock on the Date of Grant, as reported in the
Wall Street Journal (or, if not so reported, as otherwise reported by the
National Association of Securities Dealers Automated Quotation System on the
National Association of Security Dealers Over the Counter Bulletin Board).
2.18 "Incentive Agreement" shall mean the written agreement between the
Company and the Participant relating to Incentive Stock Options, Non-qualified
Stock Options, Stock Appreciation Rights, stock awards, restricted stock and
cash awards granted under the Plan, and shall include an Incentive Stock Option
Agreement, Non-qualified Stock Option Agreement or other form of Agreement which
may be approved by the Board.
2.19 "Incentive Award" shall mean the award of one or more Incentives.
2.20 "Incentive Stock Option" shall mean an Option which is intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, or any successor provision thereto.
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2.21 "Incentives" shall mean those incentive benefits which may be granted
from time to time under the terms of the Plan which include Incentive Stock
Options, Non-qualified Stock Options, Stock Appreciation Rights, stock awards,
restricted stock and cash awards.
2.22 "Management Objectives" means the achievement of performance
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares of Performance Units or, when so determined by the
Board of the Committee, Restricted Shares.
2.23 "Non-qualified Stock Option" means an Option that is not intended to
qualify as a Tax-Qualified Option.
2.24 "Option Price" means the purchase price payable upon the exercise of
an Option.
2.25 "Option" means the right to purchase Common Shares from the Company
upon the exercise of a Non-qualified Stock Option or a Tax-Qualified Option
granted pursuant to Section 7 of this Plan.
2.26 "Optioned Stock" shall mean the Common Stock subject to an Option.
2.27 "Optionee" shall mean an Employee, Director, Consultant or Advisor of
the Company who has been granted one or more Options.
2.28 "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
2.29 "Participant" means a person who is selected by the Board or a
Committee to receive benefits under this Plan and (i) is at that time an
officer, including without limitation an officer who may also be a member of the
Board, director, or other key employee of or a Consultant or Advisor to the
Company, or (ii) has agreed to commence serving in any such capacity.
2.30 "Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 10 of this
Plan within which the Management objectives relating thereto are to be achieved.
2.31 "Performance Share" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 10 of this Plan.
2.32 "Performance Unit" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 10 of this Plan.
2.33 "Plan" shall mean this 1999 Stock Incentive Plan, as amended from time
to time in accordance with the terms hereof.
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2.34 "Restricted Shares" means Common Shares granted or sold pursuant to
section 9 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 8.9 hereof has expired.
2.35 "Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Exchange Act, or any
successor rule to the same effect.
2.36 "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
2.37 "Spread" means, in the case of a Free-Standing Stock Appreciation
Right, the amount by which the Fair Market Value per share on the date when the
Stock Appreciation Right is exercised exceeds the Base Price specified therein
or, in the case of a Tandem Stock Appreciation Right, the amount by which the
Fair Market Value per share on the date when the Stock Appreciation Right is
exercised exceeds the Option Price specified in the related Option.
2.38 "Subsidiary" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
2.39 "Tax Date" shall mean the date an Optionee is required to pay the
Company an amount with respect to tax withholding obligations in connection with
the exercise of an option.
2.40 "Tax-Qualified Option" means an Option that is intended to qualify
under particular provisions of the Code, including without limitation an
Incentive Stock Option.
3. Common Stock Subject to the Plan.
Subject to the provisions of Section 12 of the Plan, the maximum aggregate
number of shares which may be optioned and sold or otherwise awarded under the
Plan is Two Million (2,000,000) Common Shares. Any Common Shares available for
grants and awards at the end of any calendar year shall be carried over and
shall be available for grants and awards in the subsequent calendar year. For
the purposes of this Section 3:
3.1 Upon payment in cash of the benefit provided by any award granted under
this Plan, or upon expiration or cancellation of any award granted under this
Plan, any Common Shares that were covered by such award shall again be available
for issuance or transfer hereunder.
3.2 Common Shares covered by any award granted under this Plan shall be
deemed to have been issued or transferred, and shall cease to be available for
future issuance or transfer in respect of any other award granted hereunder, at
the earlier of the time when they are actually
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issued or transferred or the time when dividends or dividend equivalents are
paid thereon; provided, however, that Restricted Shares shall be deemed to have
been issued or transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when dividends are paid
thereon.
3.3 Performance Units that are granted under this Plan and are paid in
Common Shares or are not earned by the Participant at the end of the Performance
Period shall be available for future grants of Performance Units hereunder.
4. Administration of the Plan.
4.1 Procedure.
(a) The Board shall administer the Plan; provided, however, that the
Board may appoint a Committee consisting solely of two (2) or more
"Non-Employee Directors" to administer the Plan on behalf of the Board, in
accordance with Rule 16b-3.
(b) Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove
members (with or without cause), appoint new members in substitution
therefor, and fill vacancies however caused; provided, however, that at no
time may any person serve on the Committee if that person's membership
would cause the committee not to satisfy the requirements of Rule 16b-3.
(c) A majority of the Committee shall constitute a quorum, and the
acts of the members of the Committee who are present at any meeting thereof
at which a quorum is present, or acts unanimously approved by the members
of the Committee in writing, shall be the acts of the Committee.
(d) Any reference herein to the Board shall, where appropriate,
encompass a Committee appointed to administer the Plan in accordance with
this Section 4.
4.2 Power of the Board or the Committee
(a) Subject to the provisions of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Options or Incentive Awards to
Participants; (ii) to determine, upon review of relevant information and in
accordance with Section 2.19 of the Plan, the Fair Market Value of the
Common stock; (iii) to determine the exercise price per share of Options to
be granted, which exercise price shall be determined in accordance with
Section 2.19 of the Plan; (iv) to determine the number of Common Shares to
be represented by each Option or Incentive Award; (v) to determine the
Participants to whom, and the time or times at which, Options and Incentive
Awards shall be granted; (vi) to interpret the Plan; (vii) to prescribe,
amend and rescind rules and regulations relating to the Plan; (viii) to
determine the terms and provisions of each Option and Incentive Award
granted (which need not be identical) and, with the consent
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of the grantee thereof, modify or amend such Option or Incentive Award;
(ix) to accelerate or defer (with the consent of the grantee) the exercise
date of any Option or Incentive Award; (x) to authorize any person to
execute o behalf of the Company any instrument required to effectuate the
grant of an Option or Incentive Award previously granted by the Board; (xi)
to accept or reject the election made by a grantee pursuant to Section 7.5
of the Plan; and (xii) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(b) The Board or a Committee may delegate to an officer of the Company
the authority to make decisions pursuant to this Plan, provided that no
such delegation may be made that would cause any award to other transaction
under the Plan to cease to be exempt from Section 16(b) of the Exchange
Act. A Committee may authorize any one or more of its members or any
officer of the Company to execute and deliver documents on behalf of the
Committee.
4.3 Effect of Board or Committee Decisions. All decisions and
determinations and the interpretation and construction by the Board or a
Committee of any provision of this Plan or any agreement, notification or
document evidencing the grant of Options, Restricted Shares, Deferred Shares,
Performance Shares or Performance Units, and any determination by the Board or a
Committee pursuant to any provision of this plan or any such agreement,
notification or document, shall be final, binding and conclusive with respect to
all grantees and any other holders of any Option or Incentive Award granted
under the Plan. No member of the Board or a Committee shall be liable for any
such action taken or determination made in good faith.
5. Eligibility.
Consistent with the Plan's purposes, Options and Incentive Awards may be
granted only to Employees, Directors, Consultants and Advisors of the Company as
determined by the Board or a Committee. Subject to the terms of the Plan, an
Employee, Director, Consultant or advisor who has been granted an Option or
Incentive Award may, if he is otherwise eligible, be granted an additional
Option or Incentive Award. Incentive Stock Options may be granted only to those
Employees who meet the requirements applicable under Section 422 of the Code.
6. Board Approval; Effective Date.
The Plan shall take effect on March 11, 1999, the date on which the Board
approved the Plan. No Option may be granted after March 11, 2009 (ten (10) years
from the effective date of the Plan); provided, however, that the Plan and all
outstanding Options shall remain in effect until such options have expired or
until such Options are canceled.
7. Stock Options.
The Board or the Committee may from time to time authorize grants to
Participants of
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Options to purchase Common Shares upon such terms and conditions as the Board or
the Committee may determine in accordance with the following provisions:
7.1 Options to be Granted; Terms.
(a) Options granted pursuant to this Section 7 may be Non-qualified
Stock Options or Tax-Qualified Options or combinations thereof. The Board
or the Committee shall determine the specific terms of Options.
(b) Each grant shall specify the period or periods of continuous
employment, or continuous engagement of the consulting or advisory
services, of the Optionee by the Company or any Subsidiary that are
necessary before the Options or installments thereof shall become
exercisable.
(c) Any grant of a Non-qualified Stock Option may provide for the
payment to the Optionee of dividend equivalent thereon in cash or Common
Shares on a current, deferred or contingent basis, or the Board or the
Committee may provide that any dividend equivalents shall be credited
against the Option Price.
7.2 Number of Shares Subject to Options. Each grant shall specify the
number of Common Shares to which it pertains. Successive grants may be made to
the same Optionee regardless of whether any Options previously granted to the
Optionee remain unexercised.
7.3 Term of Option Earlier Termination. Subject to the further provisions
of this Section 7, unless otherwise provided in the Incentive Agreement, the
term of each Option shall be five (5) years from the Date of Grant hereof. In no
case shall the term of any Option exceed ten (10) years from the Date of Grant
thereof. Notwithstanding the above, in the case of an Incentive Stock Option
granted to a Participant who, at the time the Incentive Stock Option is granted,
owns ten percent (10%) or more of the Common Stock as such amount is calculated
under Section 422(b)(6) of the Code ("Ten Percent Stockholder"), the term of the
Incentive Stock Option shall be five (5) years from the Date of Grant thereof or
such shorter time as may be provided in the Incentive Agreement.
7.4 Exercise Price.
(a) Each grant shall specify an Option Price per Common Share for the
Common Share to be issued pursuant to exercise of an Option, which shall be
determined by the Board or the Committee, but in the case of an Incentive
Stock Option shall be no less than one hundred percent (100%) of the Fair
Market Value per share on the Date of Grant, and in the case of a
Non-qualified Stock Option shall be no less than seventy-five percent (75%)
of the Fair Market Value per share on the Date of Grant. Notwithstanding
the foregoing, in the case of an Incentive Stock Option granted to a
Participant who, at the time of the grant of such Incentive Stock Option,
is a Ten Percent Stockholder, the per share exercise price shall be no less
than one hundred ten percent (110%) of the Fair Market Value per share on
the Date of Grant.
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(b) With respect to Incentive Stock Options, the aggregate Fair Market
Value (determined as of the respective Date or Dates of Grant) of the
Common Shares for which one or more options granted to any Optionee under
this Plan may for the first time become exercisable as Incentive Stock
Options under the federal tax laws during any one calendar year (under all
employee benefit plans of the Company) shall not exceed $100,000. To the
extent that the Optionee holds two or more such options which become
exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive Stock Options
under the deferral tax laws shall be applied on the basis of the order in
which such options are granted. Should the number of Common Shares for
which any incentive Stock Option first becomes exercisable in any calendar
year for the excess number of Shares as a Non-qualified Stock Option under
the federal tax laws.
7.5 Payment for Shares. The price of an exercised Option and any taxes
attributable to the delivery of Common Stock under the Plan, or portion thereof,
shall be paid as follows:
(a) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of United States
currency or check or other cash equivalent acceptable to the Company, (ii)
nonforfeitable, unrestricted Common Shares, which are already owned by the
Optionee and have a value at the time of exercise that is equal to the
Option Price, (iii) any other legal consideration that the Board or the
Committee may deem appropriate, including without limitation any form of
consideration authorized pursuant to this Section 7 on such basis as the
Board or the Committee may determine in accordance with this Plan, and (iv)
any combination of the foregoing.
(b) Any grant of a Non-qualified Stock Option may provide that payment
of the Option Price may also be made in whole or in part in the form of
Restricted Shares or other Common Shares that are subject to risk of
forfeiture or restrictions on transfer. Unless otherwise determined by the
Board or the Committee on or after the Date of Grant, whenever any Option
Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 7.5, the Common Shares received by
the Optionee upon the exercise of the Non-qualified Stock Option shall be
subject to the same risks of forfeiture or restrictions on transfer as
those that applied to the consideration surrendered by the Optionee;
provided, however, that such risks of forfeiture and restrictions on
transfer shall apply only to the same number of Common Shares received by
the Optionee as applied to the forfeitable or restricted Common Shares
surrendered by the Optionee.
(c) Any grant may allow for deferred payment of the Option Price
through a sale and remittance procedure by which a Participant shall
provide concurrent irrevocable written instructions to (i) a
Company-designated brokerage firm to effect the immediate sale of the
purchased Common Shares and remit to the company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Option Price payable for the purchased Common Share, and (ii) the Company
to deliver the certificates for the purchased Common Shares directly to
such brokerage firm to complete the sale transaction.
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(d) The Board or Committee shall determine acceptable methods for
tendering Common Stock as payment upon exercise of an Option and may impose
such limitations and prohibitions on the use of Common Stock to exercise an
Option as it deems appropriate.
7.6 Rights as a Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Common Shares, no
right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or the right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 14 of the Plan.
7.7 Loans or Installment Payments; Bonuses.
(a) The Board or the Committee may, in its discretion, assist any
Participant in the exercise of one or more awards under the plan, including
the satisfaction of any federal, state, local and foreign income and
employment tax obligations arising therefrom, by (i) authorizing the
extension of a loan from the Company to such Participant; or (ii)
permitting the participant to pay the exercise price or purchase price for
the purchased shares in installments; (iii) a guaranty by the Company of a
loan obtained by the Optionee from a third party, or (iv) granting a cash
bonus to the Participant to enable the Participant to pay federal, state,
local and foreign income and employment tax obligations arising from an
award.
(b) Any loan or installment method of payment (including the interest
rate and terms of repayment) shall be upon such terms as the Board or the
Committee specifies in the applicable Incentive Agreement or otherwise
deems appropriate under the circumstances. Loans or installment payments
may be authorized with or without security or collateral. However, the
maximum credit available to the Participant may not exceed the exercise or
purchase price of the acquired shares (less the par value of such shares)
plus any federal, state and local income and employment tax liability
incurred by the Participant in connection with the acquisition of such
shares. The amount of any bonus shall be determined by the Board or the
Committee in its sole discretion under the circumstances.
(c) The Board or the Committee may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program shall be subject to forgiveness by the Company in whole or in part
upon such terms and conditions as the Board or the Committee may deem
appropriate; provided, however, that the Board or the Committee shall not
forgive that portion of any loan owed to cover the par value of the Common
Shares.
7.8 Exercise of Option.
(a) Procedure for Exercise.
(i) Any Option granted hereunder shall be exercisable at such
times
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and under such conditions as determined by the Board, including
performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan. Unless
otherwise determined by the Board at the time of grant, an Option may
be exercised in whole or in part. An Option may not be exercised for a
fraction of a share.
(ii) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance
with the terms of the Option by the person entitled to exercise the
Option and full payment for the Common Shares with respect to which
the Option is exercised has been received by the Company. Full payment
may, as authorized by the Board, consist of any consideration and
method of payment allowable under Section 7.5 of the Plan.
(iii) Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available,
both for purposes of the Plan and for sale under the Option, by the
number of Common Shares as to which the Option is exercised.
(b) Termination of Status as an Employee. Unless otherwise provided in
an Incentive Agreement, if an Employee's employment by the Company is
terminated, except if such termination is voluntary or occurs due to
retirement with the consent of the Board or due to death or disability,
then the Option, to the extent not exercised, shall cease on the date on
which the Employee's employment by the company is terminated. If an
Employee's termination is voluntary or occurs due to retirement with the
consent of the Board, then the Employee may after the date such Employee
ceases to be an employee of the Company, exercise his Option at any time
within three (3) months after the date he ceases to be an Employee of the
Company, but only to the extent that he was entitled to exercise it on the
date of such termination. To the extent that he was not entitled to
exercise the Option at the date of such termination, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate. In no event may the period of
exercise in the case of Incentive Stock Options extend more than three (3)
months beyond termination of employment.
(c) Disability. Unless otherwise provided in the Incentive Agreement,
notwithstanding the provisions of Section 7.8(b) above, in the event an
Employee is unable to continue his employment with the Company as a result
of his permanent and total disability (as defined in Section 22(e)(3) of
the Code), he may exercise his Option at any time within twelve (12) months
from the date of termination, but only to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does
not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate. In no event may the
period of exercise in the case of an Incentive Stock Option extend more
than six (6) months beyond the date the Employee is unable to continue
employment due to such disability.
(d) Death. Unless otherwise provided in the Incentive Agreement, if an
Optionee dies during the term of the Option and is at the time of his death
an Employee who shall have been in continuous status as an Employee since
the date of Grant of the Option, the
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Option may be exercised at any time within six (6) months following the date of
death by the Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent that an Optionee
was entitled to exercise the Option on the date of death, or if the Optionee's
estate, or person who acquired the right to exercise the Option by bequest or
inheritance, does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate. In no event may
the period of exercise in the case of an Incentive Stock Option extent more than
six (6) months beyond the date of the employee's death.
7.9 Option Reissuance. The Board or the Committee shall have the authority
to effect, at any time and from time to time, with the consent of the affected
Participant, the cancellation of any or all outstanding Options under this
Section 7 and grant in substitution new Options under the plan covering the same
or a different number of Common Shares but with an exercise price not less than
(i) 75% of the Fair Market Value per share on the new Date of Grant or (ii) 100%
of the Fair Market Value per share in the case of Incentive Stock Options.
7.10 Incentive Stock Options - Disposition of Shares. In the case of an
Incentive Stock Option, a Participant who disposes of Common Shares acquired
upon exercise of such Incentive Stock Option by sale or exchange (i) within two
(2) years after the Date of Grant of the Option, or (ii) within one (1) year
after the exercise of the Option, shall notify the Company of such disposition
and the amount realized upon such disposition.
7.11 Option Agreement. Each grant shall be evidenced by an agreement, which
shall be executed on behalf of the Company by any officer thereof and delivered
to and accepted by the Optionee and shall contain such terms and provisions as
the Board or the Committee may determine consistent with this Plan.
8. Restricted Shares.
Restricted Shares are Shares of Common Stock which are sold or transferred
by the Company to a Participant at a price which may be below their Fair Market
Value, or for no payment, but subject to restrictions on their sale or other
transfer by the Participant. The transfer of Restricted Shares and the transfer
and sale of Restricted Shares shall be subject to the following terms and
conditions:
8.1 Number of Shares. The number of Restricted Shares to be transferred or
sold by the Company to a Participant shall be determined by the Board.
8.2 Sale Price. The Board shall determine the prices, if any, at which
Restricted Shares shall be sold to Participant, which may vary from time to time
and among Participants, and which may be below the Fair Market Value of such
shares of Common Stock on the date of sale.
8.3 Restrictions. All Restricted Shares transferred or sold hereunder shall
be subject
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to such restrictions as the Board may determine, including, without limitation,
any or all of the following:
(a) a prohibition against the sale, transfer, pledge or other
encumbrance of the Restricted Shares, such prohibition to lapse at such
time or times as the Board or the Committee shall determine (whether in
annual or more frequent installments, at the time of the death, disability
or retirement of the holder of such Restricted Shares, or otherwise);
(b) a requirement that the holder of Restricted shares forfeit or
resell back to the Company, at his cost, all or a part of such Restricted
Shares in the event of termination of his employment during any period in
which such Restricted Shares are subject to restrictions; and
(c) a prohibition against employment of the holder of such Restricted
Shares by any competitor of the Company or a subsidiary of the Company, or
against such holder's dissemination of any secret or confidential
information belonging to the Company or a subsidiary of the Company.
8.4 Escrow. In order to enforce the restrictions imposed by the Board
pursuant to Section 8.3 above, the Participant receiving Restricted Shares shall
enter into an agreement with the Company setting forth the conditions of the
grant. Restricted Shares shall be registered in the name of the Participant and
deposited, together with a stock power endorsed in blank, with the Company.
8.5 End of Restrictions. Subject to Section 8.3, at the end of any time
period during which the Restricted Shares are subject to forfeiture and
restrictions on transfer, such Restricted Shares will be delivered, free of all
restrictions, to the Participant or to the Participant's legal representative,
beneficiary or heir.
8.6 Stockholder. Subject to the terms and conditions of the Plan, each
Participant receiving Restricted Shares shall have all the rights of a
stockholder with respect to such shares of stock during any period which such
shares are subject to forfeiture and restrictions on transfer, including,
without limitation, the right to vote such shares. Dividends paid in cash or
property other than Common Stock with respect to the Restricted Shares shall be
paid to the Participant currently.
8.7 Ownership of Restricted Shares. Each grant or sale shall constitute an
immediate transfer of the ownership of the Restricted Shares to the Participant
in consideration of the performance of services, entitling such Participant to
dividend, voting and other ownership rights, subject to the "substantial risk of
forfeiture" and restrictions on transfer referred to hereinafter.
8.8 Additional Consideration. Each grant or sale may be made without
additional consideration from the Participant or in consideration of a payment
by the Participant that is less
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than the Fair Market Value per share on the Date of Grant.
8.9 Substantial Risk of Forfeiture.
(a) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined
by the Board or the Committee on the Date of Grant.
(b) Each grant or sale shall provide that, during the period for which
substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to
the extent prescribed by the Board or the Committee on the Date or Grant.
Such restrictions may include without limitation rights of repurchase or
first refusal in the Company or provisions subjecting the Restricted Shares
to a continuing substantial risk of forfeiture in the hands of any
transferee.
8.10 Dividends. Any grant or sale may require that any or all dividends or
other distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the Board of
the Committee may determine.
8.11 Additional Grants Successive grants or sales may be made to the same
Participant regardless of whether any Restricted Shares previously granted or
sold to a Participant remain restricted.
9. Deferred Shares.
The Board or the Committee may authorize grants or sales of Deferred Shares
to Participants upon such terms and conditions as the Board or the Committee may
determine in accordance with the following provisions:
9.1 Performance Conditions. Each grant or sale shall constitute the
agreement by the Company to issue or transfer Common Shares to the Participant
in the future in consideration of the performance of services, subject to the
fulfillment during the Deferral Period of such conditions as the Board or the
Committee may specify.
9.2 Additional Consideration. Each grant or sale may be made without
additional consideration from the Participant or in consideration of a payment
by the participant that is less than the Fair Market Value per shares on the
Date of Grant.
9.3 Deferral Period. Each grant or sale shall provide that the Deferred
Shares covered thereby shall be subject to a Deferral Period, which shall be
fixed by the Board or the Committee on the Date of Grant.
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9.4 Ownership of Shares. During the Deferral Period, the Participant shall
not have any right to transfer any rights under the subject award, shall not
have any rights of ownership in the Deferred Shares and shall not have any right
to vote the Deferred Shares, but the Board or the Committee may on or after the
Date of Grant authorize the payment of dividend equivalents on the Deferred
Shares in cash or additional Common Shares on a current, deferred or contingent
basis.
9.5 Additional Grants. Successive grants or sales may be made to the same
Participant regardless of whether any Deferred Shares previously granted or sold
to a Participant have vested.
9.6 Agreement. Each grant or sale shall be evidenced by an agreement, which
shall be executed on behalf of the Company by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and provisions
as the Board or the Committee may determine consistent with this Plan.
10. Performance Shares and Performance Units.
The Board or the Committee may authorize grants of Performance Shares and
Performance Units, which shall become payable to the Participant upon the
achievement of specified Management Objectives, upon such terms and conditions
as the Board or the Committee may determine in accordance with the following
provisions:
10.1 Number. Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.
10.2 Performance Period. The Performance Period with respect to each
Performance Share or Performance Unit shall be determined by the Board or the
Committee on the Date of Grant.
10.3 Management Objectives.
(a) Each grant shall specify the Management Objectives that are to be
achieved by the Participant, which may be described in terms of
Company-wide objectives or objectives that are related to the performance
of the individual Participant or the Subsidiary, division, department or
function within the Company or Subsidiary in which the Participant is
employed or with respect to which the participant provides consulting
services.
(b) Each grant shall specify in respect of the specified Management
Objectives a minimum acceptable level of achievement below which no payment
will be made and shall set forth a formula for determining the amount of
any payment to be made if performance is at or above the minimum acceptable
level but falls short of full achievement of the specified Management
Objectives.
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(c) The Board or the Committee may adjust Management Objectives and
the related minimum acceptable level of achievement if, in the sole
judgment of the Board or the Committee, events or transactions have
occurred after the Date of Grant that are unrelated to the performance of
the Participant and result in distortion of the Management Objectives or
the related minimum acceptable level of achievement.
10.4 Payment.
(a) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and
any grant may specify that any such amount may be paid by the Company in
cash, Common Shares or any combination thereof and may either grant to the
Participant or reserve to the Board or the Committee the right to elect
among those alternatives; provided, however, that no form of consideration
or manner of payment that would cause Rule 16b-3 to cease to apply to this
Plan shall be permitted.
(b) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the
Board or the Committee on the Date of Grant. Any grant of Performance Units
may specify that the amount payable, on the number of Common Shares issued,
with respect thereto may not exceed maximums specified by the Board or the
Committee Shares issued, with respect thereto may not exceed maximums
specified by the Board or the Committee on the Date of Grant.
10.5 Dividends. On or after the Date of Grant of Performance Shares, the
Board or the Committee may provide for the payment to the Participant of
dividend equivalents thereon in cash or additional Common Shares on a current,
deferred or contingent basis.
10.6 Additional Grants. Successive grants may be made to the same
Participant regardless of whether any Performance Shares or Performance Units
granted to any Participant have vested.
10.7 Agreement. Each grant shall be evidenced by an agreement, which shall
be executed on behalf of the Company by any officer thereof and delivered to and
accepted by the Participant and shall contain such terms and provisions as the
Board or the Committee may determine consistent with this Plan.
11. Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Option or Incentive
Award, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options nor Incentive Awards have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Incentive Award, as well as the price per share of
Common Stock covered by each such outstanding Option or Incentive Award, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common
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stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof, shall be made with respect to
the number or price of shares of Common Stock subject to an Option or Incentive
Award.
In the event of the proposed dissolution or liquidation of the Company, all
Options and Incentive Awards will terminate immediately prior to the
consummation of such proposed action unless otherwise provided by the Board. The
Board may, in the exercise of its sole discretion in such instances, declare
that any Option or Incentive Award shall terminate as of a date fixed by the
Board and give each holder the right to exercise of its sole discretion in such
instances, declare that any Option or Incentive Award shall terminate as of a
date fixed by the Board and give each holder the right to exercise his Option or
Incentive Award as to all or any part thereof, including Shares as to which the
Option or Incentive Award would not otherwise be exercisable. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the Option or Incentive
Award shall be assumed or an equivalent Option or Incentive Award shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the holder shall
have the right to exercise the Option or Incentive Award as to all of the
Shares, including Shares as to which the Incentive would not otherwise be
exercisable. If the Board makes an Incentive exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Board shall
notify the holder that the Option or Incentive Award shall be fully exercisable
for a period of sixty (60) days from the date of such notice (but not later than
the expiration of the term of the Option or Incentive Award), and the Option or
Incentive Award will terminate upon the expiration of such period.
12. Transferability.
Except to the extent otherwise expressly provided in the Plan, the right to
acquire Common Shares or other assets under the Plan may not be assigned,
encumbered or otherwise transferred by a Participant and any attempt by a
Participant to do so will be null and void. No Option or Incentive Award granted
under this Plan may be transferred by a participant except by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security
Act, as amended, or the rules thereunder. Options and other awards granted under
this Plan may not be exercised during a Participant's lifetime except by the
Participant or, in the event of the Participant's legal incapacity, by his
guardian or legal representative acting in a fiduciary capacity on behalf of the
Participant under state law and court supervision.
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13. Time of Granting Incentives.
The Date of Grant of an Option or Incentive Award shall, for all purposes,
be the date on which the Board or Committee makes the determination granting
such Option or Incentive Award. Notice of the determination shall be given to
each Participant to whom an Option or Incentive Award is so granted within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
14.1 The Board may amend or terminate the Plan from time to time in such
respects as the Board may deem advisable; provided, however, that the following
revisions or amendments shall require approval of the holders of a majority of
the outstanding Shares of the Company entitled to vote thereon, to the extent
required by law, rule or regulation:
(a) Any increase in the number of Shares subject to the Plan, other
than in connection with an adjustment under Section 11 of the Plan;
(b) Any change in the designation of the persons eligible (or any
change in the class of Employees eligible, in the case of Incentive Stock
Options) to be granted Options or Incentive Awards involving Shares; or
(c) If the Company has a class of equity security registered under
Section 12 of the Exchange Act at the time of such revision or amendment,
any material increase in the benefits accruing to participants under the
Plan.
14.2 Notwithstanding the foregoing, stockholder approval under this Section
14 shall only be required at such time as (A) any rules of the National
Association of Securities Dealers' Automated Quotation System-National Market
System shall require stockholder approval of a plan or arrangement pursuant to
which Common Stock may be acquired by officers or directors of the Company,
and/or (B) Rule 16b-3, as promulgated by the Securities and Exchange Commission
under the Exchange Act, and as such Rule may be amended from time to time, shall
require the approval of stockholders of a company of any material amendment to
any employee benefit plan of such company, or (C) Section 422 of the Code shall
require shareholder approval of an amendment to the Plan.
14.3 Any such amendment or termination of the Plan shall not affect options
already granted and such Options shall remain in full force and effect as if
this plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.
14.4 Notwithstanding the foregoing, this Plan shall terminate upon the
earlier of (i) March 11, 2009 or such earlier date as the Board shall determine,
or (ii) the date on which all awards available for issuance in the last year of
the Plan shall have been issued or canceled. Upon termination of the Plan, no
further awards may be granted, but all grants outstanding on
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such date shall thereafter continue to have force and effect in accordance with
the provisions of the agreements evidencing such grants.
15. Withholding Taxes.
15.1 The Company is authorized to withhold income taxes as required under
applicable laws or regulations. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for the withholding are insufficient, it
shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Company for payment of the balance of any taxes required to
be withheld. At the discretion of the Board or the Committee, any such
arrangements may without limitation include relinquishment of a portion of any
such payment or benefit or the surrender of outstanding Common Shares. The
Company and any Participant or such other person may also make similar
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.
15.2 An Optionee who is also an officer or a director of the Company must
make the above described election: (a) at least six months after the Date of
Grant of the Option (except in the event of death or disability); and (b)
either: (i) six months prior to the Tax Date, or (ii) prior to the Tax Date and
during the period beginning on the third business day following the date the
Company releases its quarterly or annual statement of sales and earnings and
ending on the twelfth business day following such date.
16. Corporate Transaction or Change of Control.
The Board or the Committee shall have the right in its sole discretion to
include with respect to any award granted to a Participant hereunder provisions
accelerating the benefits of the award in the event of a Corporate Transaction
or Change of Control, which acceleration rights may be granted in connection
with an award pursuant to the agreement evidencing the same or at any time after
an award has been granted to a Participant.
17. Miscellaneous Provisions.
17.1 Plan Expense. Any expenses of administering this Plan shall be borne
by the Company.
17.2 Construction of Plan. The place of administration of the Plan shall be
in the State of Colorado, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined in accordance with the laws of
the state of Colorado without regard to conflict of law principles and, where
applicable, in accordance with the Code.
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17.3 Other Compensation. The Board or the Committee may condition the grant
of any award or combination of awards authorized under this Plan on the
surrender or deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a Subsidiary to
the Participant.
17.4 Continuation of Employment or Services. This Plan shall not confer
upon any Participant any right with respect to continuance of employment or
other service with the Company or any Subsidiary and shall not interfere in any
way with any right that the Company or any Subsidiary would otherwise have to
terminate any Participant's employment or other service at any time. Nothing
contained in the Plan shall prevent the Company or any Subsidiary from adopting
other or additional compensation arrangements for its employees.
17.5 Tax-Qualified Options. To the extent that any provision of this Plan
would prevent any Option that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect to
any such Option; provided, however, that any such provision shall remain in
effect with respect to other Options, and there shall be no further effect on
any provision of this Plan.
17.6 Certain Terminations of Employment or Consulting Services, Hardship
and Approved Leaves of Absence. Notwithstanding any other provision of this Plan
to the contrary, in the event of termination of employment or consulting
services by reason of death, disability, normal retirement, early retirement
with the consent of the Company, termination of employment or consulting
services to enter public or military service with the consent of the Company or
leave of absence approved by the Company, or in the event of hardship or other
special circumstances, of a Participant who holds an Option or Stock
Appreciation Right that is not immediately and fully exercisable, any Restricted
Shares as to which the substantial risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, any Deferred Shares as to which the
Deferral Period is not complete, any Performance Shares or Performance Units
that have not been fully earned, or any Common Shares that are subject to any
transfer restriction pursuant to Section 15 of this Plan, the Board or the
Committee may take any action that it deems to be equitable under the
circumstances or in the best interest of the Company, including without
limitaiton waiving or modifying any limitation or requirement with respect to
any award under this Plan.
17.7 Binding Effect. The provisions of the Plan shall inure to the benefit
of, and be binding upon, the Company and its successors or assigns, and the
Participants, their legal representatives, their heirs or legacees and their
permitted assignees.
17.8 Exchange Act Compliance. With respect to persons subject to Section 16
of the Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the Exchange
Act. To the extent any provisions of the Plan or action by the Board or the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board or the Committee.
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17.9 Conditions upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an Option
or Incentive Award unless the exercise of such Option or Incentive Award
and the issuance and delivery of such Shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Option or Incentive Award,
the Company may require the person exercising such option or Incentive
Award to represent and warrant at the time of any such exercise that the
Shares are being purchased or otherwise acquired only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company such a representation is required by any
of the aforementioned relevant provisions of law.
(c) Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Share
hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
17.10 Fractional Shares. The Company shall not be required to issued any
fractional Common Shares pursuant to this Plan. The Board or the Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
17.11 Reservation of Shares. The Company will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
17.12 Indemnification. In addition to such other rights of indemnification
as they may have as members of the Board, the members of the Board and of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be party by reason of any action taken or failure
to act under or in connection with the Plan or any Option or Incentive Award,
and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith; provided that
upon the institution of any such action, suit or proceeding a Board member or
Committee member shall, in writing, give the Company notice thereof and an
opportunity, at its own expense, to handle and defend the same before such Board
member or Committee member undertakes to handle and defend it on his own behalf.
17.13 Gender. For purposes of this Plan, words used in the masculine gender
shall
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include the feminine and neuter, and the singular shall include the plural and
vice versa, as appropriate.
17.14 Use of Proceeds. Any cash proceeds received by the Company from the
sale of Common Shares under the Plan shall be used for general corporate
purposes.
17.15 Regulatory Approvals.
(a) The implementation of the Plan, the granting of any awards under
the Plan and the issuance of any Common Shares shall be subject to the
Company's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the awards granted under it
and the Common Shares issued pursuant to it.
(b) No Common Shares or other assets shall be issued or delivered
under this Plan unless and until there shall have been compliance with all
applicable requirements of federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the
Common Shares issuable under the Plan, and all applicable listing
requirements of any securities exchange on which the Common Shares are then
listed for trading.
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