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EXHIBIT 99.1
COMPOSITE SOLUTIONS, INC.
2000 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN. COMPOSITE SOLUTIONS, INC., a Florida corporation
(the "COMPANY"), hereby establishes the 2000 Stock Incentive Plan (the "PLAN").
The purpose of the Plan is to advance the interests of the Company, its
Subsidiaries, if any, and its shareholders by providing persons with substantial
responsibility for the Company's success with an entrepreneurial incentive to:
(a) provide high levels of performance; (b) undertake extraordinary efforts to
increase the earnings of the Company; (c) increase their proprietary interest in
the Company; and (d) remain in the employ of the Company.
2. DEFINITIONS. As set forth in this Plan and any Plan Agreement, the
following terms shall have the meanings set forth below:
2.1 "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 3 of the Plan.
2.2 "AWARD" means an Option or Stock Bonus granted pursuant to this
Plan.
2.3 "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.4 "COMMITTEE" shall mean the Employee Stock Incentive Plan
Committee, which shall be the Board of Directors of the Company, unless the
Board of Directors appoints by resolution, which may be amended from time to
time, a committee of at least two of its members to act as the Committee
pursuant to this Plan.
2.5 "COMMON STOCK" refers to shares of common stock of the Company.
2.6 "COMPANY" shall mean COMPOSITE SOLUTIONS, INC., a Florida
corporation and any corporate successor to all or substantially all of the
assets or voting stock of the Company.
2.7 "CONSULTANT" means any person who is engaged by the Company or
any parent or subsidiary to render consulting or advisory services and is
compensated for such services, which shall not include any member of the
Company's Board of Directors.
2.8 "CONTINUOUS SERVICE" means when a Participant continues to render
periodic services to the Company or any parent or subsidiary corporation as an
Employee or as otherwise provided in a written agreement between the Participant
and the Company.
2.9 "EMPLOYEE" shall mean a full-time employee or officer of the
Company, or any Subsidiary of the Company, or both.
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2.10 "FAIR MARKET VALUE" per share of Common Stock on any relevant
date shall be determined by the Committee in accordance with the following
provisions:
2.10.1 If the Common Stock is at the time traded on the NASDAQ
National Market System or the NASDQ Small Cap Market System, then the fair
market value shall be the 4:00 p.m. closing bid per share of Common Stock on the
date in question, as such price is reported by the National Association of
Securities Dealers. If there is no closing bid price for the Common Stock on the
date in question, then the fair market value shall be the closing bid price on
the last receiving date for which such quotation exists.
2.10.2 If the Company is not so listed and traded on the NASDAQ
National Market System or the NASDQ Small Cap Market System, Fair Market Value
shall be determined by the Committee, in its sole discretion, considering among
other factors it deems relevant, if known, the recent prices at which shares of
the Company traded in arms length transactions within the knowledge of the
Committee; comparable price to book value, price to sale and price to earnings
ratios of other companies which are listed and which are most comparable to the
Company in terms of industry, size, earnings history, and geographic market; any
discount which may be appropriate due to the lack of a liquid public trading
market for shares of the Company; and such other factors as the committee may
deem fair and reasonable.
2.11 "INCENTIVE STOCK OPTION" or "ISO" shall mean an Option granted
pursuant to this Plan which qualifies as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
2.12 "MISCONDUCT" shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure of confidential information or trade secrets of the Company and any
other adverse act that materially affects the Company.
2.13 "NON-QUALIFIED STOCK OPTION" or "NQSO" shall mean any Option
which is not an ISO.
2.14 "OPTION" shall mean a right to purchase Stock, which right is
granted pursuant to this Plan.
2.15 "OPTION PRICE" shall mean the purchase price for Stock under an
Option as determined herein.
2.16 "PARTICIPANT" shall mean an Employee, Consultant or other person
rendering services to the Company to whom an Award is granted under this Plan.
2.17 "PLAN" shall mean this COMPOSITE SOLUTIONS, INC. 2000 Stock
Incentive Plan.
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2.18 "PLAN AGREEMENT" shall mean an agreement with respect to an Award
granted pursuant to this Plan.
2.19 "STOCK BONUS" means a bonus paid in shares of Common Stock of the
Company pursuant to this Plan. "STOCK BONUS PROGRAM" means any issuance of a
Stock Bonus pursuant to this Plan.
2.20 "SUBSIDIARY" shall mean a subsidiary corporation of the Company,
as defined in Section 424(f) of the Code.
3. ADMINISTRATION OF THE PLAN.
3.1 This Plan shall be administered by the Committee. The Committee
shall select one of its members as Chairman, and shall hold meetings at such
times and at such places as it shall deem advisable. A majority of its members
shall constitute a quorum. All determinations of the Committee shall be made, if
at a meeting at which a quorum is present, by not less than a majority of the
members present, or if by written consent to action, by not less than a majority
of its members. The Committee may appoint a Secretary to keep minutes of its
meetings and, subject to the Bylaws of the Company and resolutions of the Board
of Directors, shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
3.2 Subject to the provisions of the Plan, the Committee shall have
plenary authority, in its discretion to: (a) determine the Employees, Directors
and Consultants of the Company and its Subsidiaries who shall be Participants
and to whom Awards may be granted; (b) determine the time or times at which
Awards shall be granted; (c) determine the Fair Market Value of the shares of
Common Stock subject to each Award; (d) determine the time or times when each
Option shall become exercisable and the duration of the exercise period; (e)
determine the types of Options, whether they be ISO's or NQSO's, to be granted;
(f) determine the number of shares of Common Stock to be subject to each Award;
(g) to determine any conditions or restrictions imposed on Common Stock acquired
pursuant to any Award (including, but not limited to, repurchase rights,
forfeiture restrictions and restrictions on transferability); (h) interpret the
Plan and prescribe, amend and rescind rules and regulations relating to the Plan
(the Committee, in the exercise of this power, may correct any defect, omission
or inconsistency in the Plan or any Plan Agreement in a manner and to the extent
it shall deem necessary or expedient to make the Plan fully effective); (i)
determine the terms and provisions, and amendments thereto, of each Plan
Agreement (which need not be the same as any other Plan Agreement), including
such terms and provisions as may be necessary to conform to any changes in the
law applicable thereto; and (j) make all determinations necessary or advisable
for the administration of the Plan. The Committee's determinations on the
foregoing matters shall be final and binding on all parties who have an interest
in the Plan or any outstanding Option thereunder.
3.3 The Committee shall use its best efforts to cause the Plan to
comply with the provisions of Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934, as
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amended (the "1934 Act") and the rules of the California Commissioner of
Corporations as in effect from time to time, to the extent applicable to the
Plan. To the extent applicable, all of the members of the Committee shall be
"disinterested persons" as provided in Rule 16b-3 promulgated pursuant to the
1934 Act, as amended from time to time, and/or "outside directors" as defined
under Section 162(m) of the Code and the regulations thereunder, as amended from
time to time.
4. ELIGIBILITY OF PARTICIPANTS. The Committee may grant Awards to any
Employee, Director or Consultant; provided, however, no Director shall be a
Participant if Sections 16(a) and 16(b) of the 1934 Act apply to grants under
the Plan and inclusion of such Director would cause the Plan not to comply with
the provisions of Rule 16b-3, as amended from time to time. Awards may be
awarded by the Committee at any time and from time to time to new Participants,
previous Participants and/or present Participants, or to a greater or lesser
number of Participants, and may include or exclude previous Participants. In
selecting Participants, the Committee may take into account the nature of the
services rendered by each person, his or her present and potential contributions
to the Company's success, and such other factors as the Committee shall from
time to time in its sole discretion deem relevant. At the time of the grant of
each Option under this Plan, the Committee shall determine whether such Option
is to be designated as an ISO or as an NQSO. Each such designation shall be
specified in the Plan Agreement relating thereto. If an Option is designated as
an ISO, then the provisions of Section 8 herein below shall be applicable to
such Option and the eligibility of each Participant therein.
5. SHARES OF STOCK SUBJECT TO THE PLAN.
5.1 Shares of Common Stock shall be available for issuance under the
Plan and shall be drawn from either the Company's authorized but unissued shares
of Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Company on the open market. The maximum number of shares of
Common Stock reserved for issuance over the term of the Plan shall be limited to
One Million (1,000,000), subject to adjustment from time to time in accordance
with the provisions of this Section 5.
5.2 Should one or more outstanding Options under this Plan expire or
terminate for any reason prior to exercise in full (including any Option
cancelled in accordance with the cancellation-regrant provisions of Section 12),
then the shares subject to the portion of each Option not so exercised shall be
available for subsequent issuance under the Plan. Should the exercise price of
an outstanding Option under the Plan be paid with shares of Common Stock, the
number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the Option is exercised, and not
by the net number of shares of Common Stock actually issued to the holder of
such Option.
5.3 Should any change be made to the Common Stock issueable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change effecting the outstanding Common
Stock as a class without the Company's receipt of consideration, then
appropriate adjustments shall be made to: (i) the maximum number and/or class of
securities issueable under the Plan; and (ii) the number and/or class of
securities and price per share in effect under each Option outstanding under the
Plan. Such adjustments to the outstanding Options are to be effected in a manner
which shall preclude
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the enlargement or dilution of rights and benefits under such Options. The
adjustments determined by the Committee shall be final, binding and conclusive.
6. AWARD TERMS. Awards granted under the Plan shall be authorized by
action of the Committee and shall be evidenced by one or more instruments in the
form approved by the Committee consistent with this Plan.
7. OPTION AWARDS
7.1 OPTION PRICES. The Fair Market Value of Common Stock subject to
an Award granted under the Plan and the Option Price for each Option shall be
determined by the Board of Directors or the Committee and specified in the
respective Plan Agreement, but in no event for any ISO shall the Option Price be
less than Fair Market Value of the Company's Common Stock on the date such
Option is granted. Fair Market Value as determined by the Board of Directors or
the Committee shall be binding on the Company and upon each Participant.
7.2 PAYMENT TERMS. Full payment of the exercise price shall become
immediately due upon exercise of the Option and shall be payable in one or more
of the forms specified below:
7.2.1 Cash or check made payable to the Company's order;
7.2.2 Shares of Common Stock held for the requisite period
necessary to avoid a charge to the Company's earnings for financial reporting
purposes and valued at Fair Market Value on the exercise date;
7.2.3 Through a special sale and remittance procedure pursuant to
which the Participant shall concurrently provide irrevocable instructions to:
(i) a Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Company in connection
with such purchase; and (ii) the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale
transaction; or
7.2.4 Such other payments as may be approved by the Board of
Directors or Committee.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
exercise date.
7.3 EXERCISE AND TERM OF OPTIONS. Each Option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Committee and set forth in the documents evidencing such
Award. No Option shall have a maximum term in excess of ten (10) years.
Incentive Stock Options are not transferable, except by the will or by the laws
of descent and distribution, and are exercisable only during the life of the
Participant. With the Company's prior written approval, other Awards granted
under the Plan
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may be assigned in whole or in part during the Participant's lifetime to one or
more members of the Participant's family or to a trust established exclusively
for one or more such family members or to Participant's former spouse, to the
extent such assignment is in connection with the Participant's estate plan or
pursuant to a domestic relations order. The assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the
Award pursuant to the assignment. The terms applicable to the assigned portion
shall be the same as those in effect for the Award immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Committee may deem appropriate. Awards granted under the Plan shall also be
assignable or transferable by will or the law of inheritance following the
Participant's death. Notwithstanding the foregoing, the Participant may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding Awards under the Plan, and those Awards shall, in accordance with
such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Participant's death while holding those Awards. Such
beneficiary or beneficiaries shall take the transferred Awards subject to all
the terms and conditions of the applicable agreement evidencing each such
transferred Award, including, without limitation, the limited time period during
which the Award may be exercised following the Participant's death.
7.4 EFFECT OF TERMINATION OF SERVICE.
7.4.1 The following provisions shall govern the exercise of any
Option held by the Participant at the time of cessation of Continuous Service or
death:
(a) Any Award outstanding at the time of the Participant's
cessation of Continuous Service for any reason shall remain exercisable for such
limited period of time thereafter as shall be determined by the Committee and
set forth in the documents evidencing the Award, but no such Award shall be
exercisable after the expiration of the Award term and in no event shall an ISO
be exercisable more than ninety (90) days after the date of termination of
Continuous Service.
(b) Any Award exercisable in whole or in part by the
Participant at the time of death may be subsequently exercised by the personal
representative of the Participant's estate or by the person or persons to whom
the Award is transferred pursuant to the Participant's will or in accordance
with the laws of descent and distribution; provided in no event shall an ISO be
exercisable more than ninety (90) days after the date of termination of
Continuous Service.
(c) During the applicable post-service exercise period, the
Award may not be exercised in the aggregate for more than the number of shares
for which the Award is exercisable on the date of the Participant's cessation of
Continuous Service. Upon the expiration of the applicable post-Service exercise
period or (if earlier) upon the expiration of the Award term, the Award shall
terminate and cease to be outstanding for any otherwise exercisable shares for
which the Award has not been exercised. However, the Award shall, immediately
upon the Participant's cessation of Continuous Service, terminate and cease to
be outstanding for any and all shares for which the Award is not otherwise at
that time exercisable.
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(d) Should the Participant's Continuous Service be
terminated for Misconduct, then all outstanding Awards held by the Participant
shall terminate immediately and cease to be outstanding.
7.4.2. The Committee shall have the discretion, exercisable
either at the time an Award is granted or at any time while the Award remains
outstanding to:
(a) Extend the period of time for which the Award is to
remain exercisable following Participant's cessation of Continuous Service or
death from the limited period otherwise in effect for that Award to such greater
period of time as the Committee shall deem appropriate, but in no event beyond
the expiration of the Award term; and/or
(b) Permit the Award to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of shares of
Common Stock for which such Award is exercisable at the time of the
Participant's cessation of Continuous Service but also with respect to one or
more additional installments for which the Award would have become exercisable
had the Participant continued in Continuous Service.
7.5 SHAREHOLDER RIGHTS. A Participant shall have none of the rights
of shareholder with respect to any Option shares until such person shall have
exercised the Option and paid the Option Price for the purchased shares.
7.6 REPURCHASE RIGHTS. The Committee shall have the discretion to
grant Options which are exercisable for unvested shares of Common Stock. Should
the Participant cease Continuous Service while holding such unvested shares, the
Company shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Committee and set forth in the documents evidencing such repurchase
right.
8. ISO's.
8.1 ELIGIBILITY. An ISO may only be granted to a full-time Employee.
8.2 TEN PERCENT SHAREHOLDER. No ISO may be granted to an Employee
who, at the time of such grant, owns capital stock constituting more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, unless at the time of such grant the Option
Price is fixed at not less than one hundred ten percent (110%) of the Fair
Market Value of the Company's Common Stock and exercise of such Option is
prohibited by its terms after the expiration of five (5) years from the date
such Option is granted.
8.3 DOLLAR LIMITATION. The aggregate Fair Market Value (determined at
the time of grant) of the Company's Common Stock for which any Participant may
be granted Options designated as ISO's, which are exercisable for the first time
by a Participant during any calendar year, shall not exceed One Hundred Thousand
Dollars ($100,000). In the event that a Participant has been granted Options to
acquire the Company's Common Stock with an
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aggregate Fair Market Value of One Hundred Thousand Dollars ($100,000)
exercisable for the first time in any calendar year, any further Options granted
to such Participant that are also first exercisable by his or her in such year
shall be NQSO's.
9. STOCK BONUS AWARDS. Shares of Common Stock may be issued under a Stock
Bonus Program through direct and immediate issuances without any intervening
Option grants. Each such stock issuance shall be evidenced by a Stock Bonus
Agreement which complies with the terms specified below. Shares of Common Stock
may also be issued under the Stock Bonus Program pursuant to share right awards
which entitle the recipients to receive those shares upon the attainment of
designated performance goals.
9.1 PURCHASE PRICE. The stipulated purchase price per share for
purposes of determining compensation attributable to a Stock Bonus shall be
fixed by the Committee, but shall not be less than one hundred percent (100%) of
the Fair Market Value per share of Common Stock on the issuance date.
9.2 VESTING PROVISIONS.
9.2.1 Shares of Common Stock issued under the Stock Bonus Program
may, in the discretion of the Committee, be fully and immediately vested upon
issuance or may vest in one or more installments over the Participant's period
of service or upon attainment of specified performance objectives. The elements
of the vesting schedule applicable to any unvested shares of Common Stock issued
under the Stock Bonus Program shall be determined by the Committee and
incorporated into the Stock Bonus Agreement. Shares of Common Stock may also be
issued under the Stock Bonus Program pursuant to share right awards which
entitle the recipients to receive those shares upon the attainment of designated
performance goals determined by the Committee. Upon the attainment of such
performance goals, fully vested shares of Common Stock shall be issued in
satisfaction of those share right awards.
9.2.2 Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Company's receipt
of consideration shall be issued subject to (i) the same vesting requirements
applicable to the Participant's unvested shares of Common Stock and (ii) such
escrow arrangements as the Committee shall deem appropriate.
9.2.3 The Participant shall have full shareholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Bonus Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
9.2.4 Should the Participant cease to remain in Continuous
Service while holding one or more unvested shares of Common Stock issued under
the Stock Bonus Program or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the
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Company for cancellation, and the Participant shall have no further shareholder
rights with respect to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in cash or cash
equivalent (including the Participant's purchase-money indebtedness), the
Company shall repay to the Participant the cash consideration paid for the
surrendered shares and shall cancel the unpaid principal balance of the
outstanding purchase-money note of the Participant attributable to the
surrendered shares.
9.2.5 The Committee may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock which would
otherwise occur upon the cessation of the Participant's Continuous Service or
the non-attainment of the performance objectives applicable to those shares.
Such waiver shall result in the immediate vesting of the Participant's interest
in the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Continuous Service or the attainment of non-attainment of the applicable
performance objectives.
9.2.6 Outstanding share right awards under the Stock Bonus
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those awards, if the performance goals
established for such awards are not attained. The Committee, however, shall have
the discretionary authority to issue shares of Common Stock under one or more
outstanding share right awards as to which the designated performance goals have
not been attained.
10. RELOAD OPTION GRANT PROGRAM.
10.1 The Committee shall have full power and authority, exercisable in
its sole discretion at any time while any Option remains outstanding to
incorporate a reload feature into that Option. To the extent an Option with such
a reload feature is subsequently exercised through the delivery of
previously-acquired shares of Common Stock in payment of the exercise price for
the shares purchased under that Option, the Participant shall automatically be
granted, at the time of such exercise, a new option (the "RELOAD OPTION") to
purchase the number of shares of Common Stock so delivered. For purposes of this
Agreement, the underlying Option with such a reload feature shall be referred to
as the "ORIGINAL OPTION."
10.2 The Committee may, in its sole discretion, provide in the
instrument evidencing the reload feature that no Reload Option shall be granted
in the event the Original Option with such feature is exercised before a
specified period of time has elapsed after the grant date of that Original
Option.
10.3 The reload feature and each Reload Option shall each be evidenced
by instruments in such form as the Committee shall from time to time deem
appropriate. However, the terms and provisions of each Reload Option shall be
exactly the same as the terms and provisions of the Original Option to which
such Reload Option relates, except to the extent otherwise indicated below.
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10.4 Unless the Committee specifies otherwise in the instrument
evidencing the reload feature, the exercise price per share of the Common Stock
purchasable under the Reload Option shall be equal to the Fair Market Value per
share of Common Stock on the date the Reload Option is granted. The Committee
shall specify in the instrument evidencing the reload feature the period of time
which must elapse following the exercise of the Original Option before the
Reload Option shall become exercisable. Once the period specified by the
Committee has elapsed, the Reload Option shall become immediately exercisable
for all of the shares of Common Stock at the time subject to that Reload Option.
10.5 The exercise price shall become immediately due upon exercise of
the Reload Option and shall be payable in the same form or forms in which the
exercise price may be paid under the Original Option.
10.6 In no event shall any additional Reload Option be granted in
connection with the subsequent exercise of the Reload Option granted with
respect to the Original Option, whether or not shares of Common Stock are
delivered in payment of the exercise price of that Reload Option.
10.7 The Reload Option shall have the same maximum Option term and
expiration date as the Original Option to which it relates, subject to earlier
termination at the same time the Original Option may so terminate.
10.8 The holder of the Reload Option shall have none of the rights of
a shareholder with respect to the shares covered by the Reload Option until such
individual has exercised the Reload Option, paid the exercise price for the
purchased shares and become the holder of record of those shares.
11. MERGER, CONSOLIDATION, LIQUIDATION OR REORGANIZATION OF THE COMPANY.
11.1 In the event of any of the following transactions (a "CORPORATE
TRANSACTION"):
11.1.1 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 of the Company's incorporation;
11.1.2 The sale, transfer or other disposition of all or
substantially all of the assets of the Company in liquidation or dissolution of
the Company;
11.1.3 Any reverse merger in which the Company is the
surviving entity, but in which fifty percent (50%) or more of the Company's
outstanding voting stock is transferred to holders different from those who held
the securities immediately prior to the merger; or
11.1.4 An acquisition by any person or related group of
persons (other than the Company or a person that directly or indirectly
controls, is controlled by or is under common control with, the Company) of
ownership of more than fifty percent (50%) of the
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Company's outstanding Common Stock, pursuant to a tender or exchange offer
(other than a tender or exchange offer approved by the Board of Directors of the
Company and the Board of Directors determines in its sole discretion shall not
be considered a "CORPORATE TRANSACTION");
All outstanding unexercised Awards granted under this Plan shall automatically
and immediately vest and all unexercised Options shall become exercisable
immediately prior to the specified effective date for the Corporate Transaction,
unless, with the approval of the Board of Directors of the Company, the Options
are assumed in connection with such Corporate Transaction or substitute Options
are granted as provided in the Plan or such Award is replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on the shares of Common Stock
for which the Award is not otherwise at that time vested or exercisable and
provides for subsequent payout in accordance with the same vesting applicable to
the Award. Upon consummation of the Corporate Transaction, all outstanding
Options and any other unvested Awards under this Plan shall terminate and cease
to be outstanding, unless assumed by the successor corporation or parent
thereof.
11.2 If an Award is to be assumed in connection with a Corporate
Transaction or is otherwise to continue in effect, then it shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been
issuable, in consummation of such Corporate Transaction, to an actual holder of
the same number of shares of Common Stock as are subject to such Award
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the Option Price payable per share, provided that the aggregate
Option Price payable for such securities shall remain the same.
11.3 The foregoing provisions of this Section 11 to the contrary
notwithstanding, in the event that the Company is subject to a corporate merger,
consolidation, separation, reorganization or liquidation, or by reason of the
acquisition of property or stock of another corporation by the Company, or any
of its Subsidiaries, and such transaction is a transaction pursuant to which
Section 424 of the Code applies, the Board of Directors may grant Options under
the Plan in substitution for Options granted under plans of other employers. The
Board of Directors may impose such terms and conditions upon the grant of any
ISO under this Section as are necessary to ensure that the substitution will
qualify under Section 424(a) of the Code and will not constitute a modification
of the Option under Section 424(h), even though such term or condition would
otherwise be inconsistent with the provisions of this Plan. Options granted
under the provisions of this Section may be granted at prices less than the Fair
Market Value of the Company's Common Stock on the date such Option is granted,
so long as the ratio of that Option Price to the Fair Market Value of the
Company's Common Stock is no more favorable to the Participant than the ratio of
the Option Price to the Fair Market Value of the Company's Common Stock subject
to the old Option immediately before such substitution. Except as otherwise
expressly provided in the agreement setting forth the terms and conditions of
such other Option, the provisions of the Plan shall govern any Options granted
under this Section.
Nothing in this Section shall be deemed or authorized as a grant of Options
under the Plan for a number of shares of the Company's Common Stock in excess of
the number set forth in Section 5 hereinabove.
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12. CANCELLATION AND REGRANT OF OPTIONS. The Committee shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Participants, the cancellation of any or all outstanding Options under
the Plan and to grant in substitution new Options under the Plan covering the
same or different numbers of shares of Common Stock but with an exercise price
per share not less than the Fair Market Value of the Company's Common Stock on
the new grant date.
13. AMENDMENT AND DISCONTINUANCE OF PLAN. The Committee may from time to
time alter or suspend and at any time discontinue the Plan. However, no action
of the Committee may, without the approval of the shareholders of the Company,
increase the maximum number of shares of Common Stock to be issued pursuant to
this Plan (other than adjustment pursuant to the terms of Section 5
hereinabove), materially increase the benefits accruing to Participants under
the Plan, modify the provisions of Section 4 hereof regarding eligibility,
reduce the Option Price at which shares of Common Stock may be offered pursuant
to Options (other than adjustment pursuant to terms of Section 5 hereinabove),
or extend the expiration date of the Plan. No action of the Committee may impair
a Participant's rights under any outstanding Option previously granted under the
Plan, without the consent of the holder of such Option.
14. EFFECTIVE DATE AND TERMINATION DATE. The Plan and any amendment hereto
requiring shareholder approval shall become effective upon the latter of: (a)
adoption by the Board of Directors, or if applicable, the Committee; and (b)
approval by the shareholders of the Company; provided that such shareholder
approval may be obtained within twelve (12) months of its adoption by the Board
of Directors or the Committee, as applicable, and Options may be granted to
Participants prior to shareholder approval of the Plan (provided, however, the
exercisability of all such Options shall be conditioned upon such approval). The
Plan shall remain in effect until terminated by the Board of Directors of the
Company, but not later than ten (10) years after the date the Plan was
originally approved by the Board of Directors.
For reference purposes, this Plan was originally adopted by the Board of
Directors and approved by the Shareholders of the Company on July 31, 2000.
The undersigned Secretary of the Company certifies that the foregoing is a
true and correct copy of the COMPOSITE SOLUTIONS, INC., 2000 Stock Incentive
Plan.
DATED: December 1, 2000
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By: /s/ GILBERT HEGEMIER
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Secretary
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