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EXHIBIT 10.4
VICTORY ENTERTAINMENT CORP.
2000 LONG TERM INCENTIVE AND SHARE AWARD PLAN
1. PURPOSES.
The purposes of the 2000 Long Term Incentive and Share Award Plan are
to advance the interests of Victory Entertainment Corp. and its shareholders by
providing a means to attract, retain, and motivate employees, directors,
consultants and independent contractors of the Company upon whose judgment,
initiative and efforts the continued success, growth and development of the
Company is dependent.
2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a participating
employer under the Plan, provided that the Company directly or indirectly owns
at least 20% of the combined voting power of all classes of stock of such entity
or at least 20% of the ownership interests in such entity.
(b) "Award" means any Option, SAR, Restricted Share, Restricted
Share Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other
Share-Based Award granted to an Eligible Person under the Plan.
c) "Award Agreement" means any written agreement, contract, or
other instrument or document evidencing an Award.
(d) "Beneficiary" means the person, persons, trust or trusts which
have been designated by an Eligible Person in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Eligible Person, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(e) "Board" means the Board of Directors of the Company.
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(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. References to any provision of the Code shall be deemed to
include successor provisions thereto and regulations thereunder.
(g) "Committee" means the Compensation Committee of the Board, or
such other Board committee (which may include the entire Board) as may be
designated by the Board to administer the Plan; PROVIDED, HOWEVER, that unless
otherwise determined by the Board, the Committee shall consist of two or more
directors of the Company, each of whom is a "non-employee director" within the
meaning of Rule 16b-3 under the Exchange Act, to the extent applicable, and each
of whom is an "outside director" within the meaning of Section 162(m) of the
Code, to the extent applicable; and provided further that the mere fact that the
Committee shall fail to qualify under either of the foregoing requirements shall
not invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan.
(h) "Company" means Victory Entertainment Corp., a corporation
organized under the laws of Florida, or any successor corporation.
(i) "Director" means a member of the Board who is not an employee
of the Company, a Subsidiary or an Affiliate.
(j) "Dividend Equivalent" means a right, granted under Section
5(g), to receive cash, Shares, or other property equal in value to dividends
paid with respect to a specified number of Shares. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another Award, and may be
paid currently or on a deferred basis.
(k) "Eligible Person" means (i) an employee, consultant or
independent contractor of the Company, a Subsidiary or an Affiliate, including
any director who is an employee, or (ii) a Director. An Award may be granted to
an employee or consultant, in connection with hiring, retention or otherwise,
prior to the date the employee or consultant first performs services for the
Company, a Subsidiary or an Affiliate, provided that such Awards shall not
become vested prior to the date the employee first performs such services.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and regulations thereunder.
(m) "Fair Market Value" means, with respect to Shares or other
property, the fair market value of such Shares or other property determined by
such methods or procedures as shall be established from time to time by the
Committee. If the Shares are listed on any established stock exchange or a
national market system, unless otherwise determined by the Committee in good
faith, the Fair Market Value of Shares shall mean the mean between
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the high and low selling prices per Share on the immediately preceding date (or,
if the Shares were not traded on that day, the next preceding day that the
Shares were traded) on the principal exchange or market system on which the
Shares are traded, as such prices are officially quoted on such exchange.
(n) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(o) "NQSO" means any Option that is not an ISO.
(p) "Option" means a right, granted under Section 5(b), to
purchase Shares.
(q) "Other Share-Based Award" means a right, granted under Section
5(h), that relates to or is valued by reference to Shares.
(r) "Participant" means an Eligible Person who has been granted an
Award under the Plan.
(s) "Performance Share" means a performance share granted under
Section 5(f).
(t) "Performance Unit" means a performance unit granted under
Section 5(f).
(u) "Plan" means this 2000 Long Term Incentive and Share Award
Plan.
(v) "Restricted Shares" means an Award of Shares under Section
5(d) that may be subject to certain restrictions and to a risk of forfeiture.
(w) "Restricted Share Unit" means a right, granted under Section
5(e), to receive Shares or cash at the end of a specified deferral period.
(x) "Rule 16b-3" means Rule 16b-3, as from time to time in effect
and applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(y) "SAR" or "Share Appreciation Right" means the right, granted
under Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.
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(z) "Shares" means common stock, $.001 par value per share, of the
Company.
(aa) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
3. ADMINISTRATION.
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered by
the Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select Eligible Persons to whom Awards may be granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be granted to each
Eligible Person;
(iv) to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any exercise price,
grant price, or purchase price, and any bases for adjusting such exercise, grant
or purchase price, any restriction or condition, any schedule for lapse of
restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waiver or accelerations thereof,
and waivers of performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;
(v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award may be
paid, in cash, Shares, other Awards, or other property, or an Award may be
canceled, forfeited, exchanged, or surrendered;
(vi) to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with respect
to an Award will be deferred either automatically, at the election of the
Committee, or at the election of the Eligible Person;
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(vii) to prescribe the form of each Award Agreement, which need not
be identical for each Eligible Person;
(viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder;
(x) to accelerate the exercisability or vesting of all or any
portion of any Award or to extend the period during which an Award is
exercisable; and
(xi) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. The Committee shall
have sole discretion in exercising its authority under the Plan. Any action of
the Committee with respect to the Plan shall be final, conclusive, and binding
on all persons, including the Company, Subsidiaries, Affiliates, Eligible
Persons, any person claiming any rights under the Plan from or through any
Eligible Person, and shareholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to other members of the Board or officers or managers of the Company or
any Subsidiary or Affiliate the authority, subject to such terms as the
Committee shall determine, to perform administrative functions and, with respect
to Awards granted to persons not subject to Section 16 of the Exchange Act, to
perform such other functions as the Committee may determine, to the extent
permitted under Rule 16b-3 (if applicable) and applicable law.
(c) LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
Subsidiary or Affiliate, the Company's independent certified public accountants,
or other professional retained by the Company to assist in the administration of
the Plan. No member of the Committee, and no officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.
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(d) LIMITATION ON COMMITTEE'S DISCRETION. Anything in this Plan to
the contrary notwithstanding, in the case of any Award which is intended to
qualify as "performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code, if the Award Agreement so provides, the Committee
shall have no discretion to increase the amount of compensation payable under
the Award to the extent such an increase would cause the Award to lose its
qualification as such performance-based compensation.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to adjustment as provided in Section 4(c) hereof, the
total number of Shares reserved for issuance in connection with Awards under the
Plan shall be 500,000. No Award may be granted if the number of Shares to which
such Award relates, when added to the number of Shares previously issued under
the Plan, exceeds the number of Shares reserved under the preceding sentence. If
any Awards are forfeited, canceled, terminated, exchanged or surrendered or such
Award is settled in cash or otherwise terminates without a distribution of
Shares to the Participant, any Shares counted against the number of Shares
reserved and available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, settlement, termination, cancellation, exchange
or surrender, again be available for Awards under the Plan. Upon the exercise of
any Award granted in tandem with any other Awards, such related Awards shall be
canceled to the extent of the number of Shares as to which the Award is
exercised.
(b) Subject to adjustment as provided in Section 4(c) hereof, the
maximum number of Shares (i) with respect to which Options or SARs may be
granted during a calendar year to any Eligible Person under this Plan shall be
250,000 Shares, and (ii) with respect to Performance Shares, Performance Units,
Restricted Shares or Restricted Share Units intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4)(C) of the
Code shall be the equivalent of 100,000 Shares during a calendar year to any
Eligible Person under this Plan.
(c) In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Eligible Persons under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems appropriate and, in
such manner as it may deem equitable, adjust any or all of (i) the number and
kind of shares which may thereafter be issued under the Plan, (ii) the number
and kind of shares, other securities or other consideration issued or issuable
in respect of outstanding Awards, and (iii) the exercise price, grant price, or
purchase price relating to any Award; PROVIDED, HOWEVER, in each case that, with
respect to ISOs, such adjustment shall be made in accordance with Section 424(a)
of the Code,
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unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives included in, Awards in recognition of unusual or
non-recurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or Affiliate or the
financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles;
PROVIDED, HOWEVER, that, if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as performance-based compensation for purposes of Section
162(m)(4)(C) of the Code and the regulations thereunder.
(d) Any Shares distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Shares or treasury Shares including
Shares acquired by purchase in the open market or in private transactions.
5. SPECIFIC TERMS OF AWARDS.
(a) GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 5. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
8(d)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
regarding forfeiture of Awards or continued exercisability of Awards in the
event of termination of service by the Eligible Person.
(b) OPTIONS. The Committee is authorized to grant Options, which
may be NQSOs or ISOs, to Eligible Persons on the following terms and conditions:
(i) EXERCISE PRICE. The exercise price per Share purchasable under
an Option shall be determined by the Committee, and the Committee may, without
limitation, set an exercise price that is based upon achievement of performance
criteria if deemed appropriate by the Committee.
(ii) OPTION TERM. The term of each Option shall be determined by
the Committee.
(iii) TIME AND METHOD OF EXERCISE. The Committee shall determine at
the date of grant or thereafter the time or times at which an Option may be
exercised in whole or in part (including, without limitation, upon achievement
of performance criteria if deemed appropriate by the Committee), the methods by
which such exercise price may be paid or deemed to be paid (including, without
limitation, broker-assisted exercise arrangements), the form of such payment
(including, without limitation, cash,
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Shares, notes or other property), and the methods by which Shares will be
delivered or deemed to be delivered to Eligible Persons.
(iv) ISOs. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, including but
not limited to the requirement that the ISO shall be granted within ten years
from the earlier of the date of adoption or shareholder approval of the Plan.
ISOs may only be granted to employees of the Company or a Subsidiary.
(c) SARs. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Persons on the following terms and conditions:
(i) RIGHT TO PAYMENT. An SAR shall confer on the Eligible Person
to whom it is granted a right to receive with respect to each Share subject
thereto, upon exercise thereof, the excess of (1) the Fair Market Value of one
Share on the date of exercise (or, if the Committee shall so determine in the
case of any such right, the Fair Market Value of one Share at any time during a
specified period before or after the date of exercise) over (2) the exercise
price of the SAR as determined by the Committee as of the date of grant of the
SAR (which, in the case of an SAR granted in tandem with an Option, shall be
equal to the exercise price of the underlying Option).
(ii) OTHER TERMS. The Committee shall determine, at the time of
grant or thereafter, the time or times at which an SAR may be exercised in whole
or in part, the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Persons, whether or not an SAR shall be in tandem with any
other Award, and any other terms and conditions of any SAR. Unless the Committee
determines otherwise, an SAR (1) granted in tandem with an NQSO may be granted
at the time of grant of the related NQSO or at any time thereafter and (2)
granted in tandem with an ISO may only be granted at the time of grant of the
related ISO.
(d) RESTRICTED SHARES. The Committee is authorized to grant
Restricted Shares to Eligible Persons on the following terms and conditions:
(i) ISSUANCE AND RESTRICTIONS. Restricted Shares shall be subject
to such restrictions on transferability and other restrictions, if any, as the
Committee may impose at the date of grant or thereafter, which restrictions may
lapse separately or in combination at such times, under such circumstances
(including, without limitation, upon achievement of performance criteria if
deemed appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award
Agreement relating to the Restricted Shares, an Eligible Person granted
Restricted Shares shall have all of the rights of a shareholder including,
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without limitation, the right to vote Restricted Shares and the right to receive
dividends thereon. If the lapse of restrictions is conditioned on the
achievement of performance criteria, the Committee shall select the criterion or
criteria from the list of criteria set forth in Section 5(f)(i). The Committee
must certify in writing prior to the lapse of restrictions conditioned on
achievement of performance criteria that such performance criteria were in fact
satisfied.
(ii) FORFEITURE. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon termination of service during the
applicable restriction period, Restricted Shares and any accrued but unpaid
dividends or Dividend Equivalents that are at that time subject to restrictions
shall be forfeited; PROVIDED, HOWEVER, that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Shares
will be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Shares.
(iii) CERTIFICATES FOR SHARES. Restricted Shares granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the name of the
Eligible Person, such certificates shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Shares,
and the Company shall retain physical possession of the certificate.
(iv) DIVIDENDS. Dividends paid on Restricted Shares shall be either
paid at the dividend payment date, or deferred for payment to such date as
determined by the Committee, in cash or in unrestricted Shares having a Fair
Market Value equal to the amount of such dividends. Shares distributed in
connection with a Share split or dividend in Shares, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to which
such Shares or other property has been distributed.
(e) RESTRICTED SHARE UNITS. The Committee is authorized to grant
Restricted Share Units to Eligible Persons, subject to the following terms and
conditions:
(i) AWARD AND RESTRICTIONS. Delivery of Shares or cash, as the
case may be, will occur upon expiration of the deferral period specified for
Restricted Share Units by the Committee (or, if permitted by the Committee, as
elected by the Eligible Person). In addition, Restricted Share Units shall be
subject to such restrictions as the Committee may impose, if any (including,
without limitation, the achievement of performance criteria if deemed
appropriate by the Committee), at the date of grant or thereafter, which
restrictions may lapse at the expiration of the deferral period or at
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earlier or later specified times, separately or in combination, in installments
or otherwise, as the Committee may determine. If the lapse of restrictions is
conditioned on the achievement of performance criteria, the Committee shall
select the criterion or criteria from the list of criteria set forth in Section
5(f)(i). The Committee must certify in writing prior to the lapse of
restrictions conditioned on the achievement of performance criteria that such
performance criteria were in fact satisfied.
(ii) FORFEITURE. Except as otherwise determined by the Committee at
date of grant or thereafter, upon termination of service (as determined under
criteria established by the Committee) during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the Award
Agreement evidencing the Restricted Share Units), or upon failure to satisfy any
other conditions precedent to the delivery of Shares or cash to which such
Restricted Share Units relate, all Restricted Share Units that are at that time
subject to deferral or restriction shall be forfeited; PROVIDED, HOWEVER, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in part in the
event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted Share Units.
(f) PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee is
authorized to grant Performance Shares or Performance Units or both to Eligible
Persons on the following terms and conditions:
(i) PERFORMANCE PERIOD. The Committee shall determine a
performance period (the "Performance Period") of one or more years and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Person to
Eligible Person and shall be based upon one or more of the following performance
criteria as the Committee may deem appropriate: appreciation in value of the
Shares, total shareholder return, earnings per share, operating income, net
income, pro forma net income, return on equity, return on designated assets,
return on capital, economic value added, earnings, revenues, expenses, operating
profit margin, operating cash flow, net profit margin. The performance
objectives may be determined by reference to the performance of the Company, or
of a Subsidiary or Affiliate, or of a division or unit of any of the foregoing.
Performance Periods may overlap and Eligible Persons may participate
simultaneously with respect to Performance Shares and Performance Units for
which different Performance Periods are prescribed.
(ii) AWARD VALUE. At the beginning of a Performance Period, the
Committee shall determine for each Eligible Person or group of Eligible Persons
with respect
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to that Performance Period the range of number of Shares, if any, in the case of
Performance Shares, and the range of dollar values, if any, in the case of
Performance Units, which may be fixed or may vary in accordance with such
performance or other criteria specified by the Committee, which shall be paid to
an Eligible Person as an Award if the relevant measure of Company performance
for the Performance Period is met. The Committee must certify in writing that
the applicable performance criteria were satisfied prior to payment under any
Performance Shares or Performance Units.
(iii) SIGNIFICANT EVENTS. If during the course of a Performance
Period there shall occur significant events as determined by the Committee which
the Committee expects to have a substantial effect on a performance objective
during such period, the Committee may revise such objective; PROVIDED, HOWEVER,
that, if an Award Agreement so provides, the Committee shall not have any
discretion to increase the amount of compensation payable under the Award to the
extent such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.
(iv) FORFEITURE. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon termination of service during the
applicable Performance Period, Performance Shares and Performance Units for
which the Performance Period was prescribed shall be forfeited; PROVIDED,
HOWEVER, that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in an individual case, that restrictions or
forfeiture conditions relating to Performance Shares and Performance Units will
be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Performance Shares and Performance Units.
(v) PAYMENT. Each Performance Share or Performance Unit may be
paid in whole Shares, or cash, or a combination of Shares and cash either as a
lump sum payment or in installments, all as the Committee shall determine, at
the time of grant of the Performance Share or Performance Unit or otherwise,
commencing as soon as practicable after the end of the relevant Performance
Period. The Committee must certify in writing prior to the payment of any
Performance Share or Performance Unit that the performance objectives and any
other material terms were in fact satisfied.
(g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Eligible Persons. The Committee may provide, at the date
of grant or thereafter, that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents)
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shall be subject to all conditions and restrictions of the underlying Awards to
which they relate.
(h) OTHER SHARE-BASED AWARDS. The Committee is authorized, subject
to limitations under applicable law, to grant to Eligible Persons such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a "bonus" and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).
6. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee, be granted to
Eligible Persons either alone or in addition to, in tandem with, or in exchange
or substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to or
in tandem with such other Awards or awards, and may be granted either as of the
same time as or a different time from the grant of such other Awards or awards.
The per Share exercise price of any Option, grant price of any SAR, or purchase
price of any other Award conferring a right to purchase Shares which is granted,
in connection with the substitution of awards granted under any other plan or
agreement of the Company or any Subsidiary or Affiliate or any business entity
to be acquired by the Company or any Subsidiary or Affiliate, shall be
determined by the Committee, in its discretion.
(b) TERMS OF AWARDS. The term of each Award granted to an Eligible
Person shall be for such period as may be determined by the Committee; PROVIDED,
HOWEVER, that in no event shall the term of any ISO or an SAR granted in tandem
therewith exceed a period of ten years from the date of its grant (or such
shorter period as may be applicable under Section 422 of the Code).
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(c) FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, notes or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments.
(d) NONTRANSFERABILITY. Unless otherwise set forth by the
Committee in an Award Agreement, Awards shall not be transferable by an Eligible
Person except by will or the laws of descent and distribution (except pursuant
to a Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his guardian or legal
representative. An Eligible Person's rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person's creditors.
(e) NONCOMPETITION. The Committee may, by way of the Award
Agreements or otherwise, establish such other terms, conditions, restrictions
and/or limitations, if any, of any Award, provided they are not inconsistent
with the Plan, including, without limitation, the requirement that the
Participant not engage in competition with the Company.
7. CHANGE OF CONTROL PROVISIONS.
(a) ACCELERATION OF EXERCISABILITY AND LAPSE OF RESTRICTIONS.
Unless otherwise provided by the Committee at the time of the Award grant, in
the event of a Change of Control, (i) all outstanding Awards pursuant to which
the Participant may have rights the exercise of which is restricted or limited,
shall become fully exercisable at the time of the Change of Control, and (ii)
unless the right to lapse of restrictions or limitations is waived or deferred
by a Participant prior to such lapse, all restrictions or limitations (including
risks of forfeiture and deferrals) on outstanding Awards subject to restrictions
or limitations under the Plan shall lapse, and all performance criteria and
other conditions to payment of Awards under which payments of cash, Shares or
other property are subject to conditions shall be deemed to be achieved or
fulfilled and shall be waived by the Company at the time of the Change of
Control.
(b) DEFINITIONS OF CERTAIN TERMS. For purposes of this Section 7,
the following definitions, in addition to those set forth in Section 2, shall
apply:
(i) "Change of Control" means and shall be deemed to have occurred if:
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(a) any person (within the meaning of the Exchange Act), other
than the Company or a Related Party, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities representing 35 percent or more of the
total voting power of all the then-outstanding Voting Securities; or
(b) the individuals who, as of the effective date of the Plan,
constitute the Board, together with those who first become directors
subsequent to such date and whose recommendation, election or
nomination for election to the Board was approved by a vote of at least
a majority of the directors then still in office who either were
directors as of the effective date of the Plan or whose recommendation,
election or nomination for election was previously so approved (the
"Continuing Directors"), cease for any reason to constitute a majority
of the members of the Board; or
(c) the stockholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the Company or a
Subsidiary, reverse split of any class of Voting Securities, or an
acquisition of securities or assets by the Company or a Subsidiary, or
consummation of any such transaction if stockholder approval is not
obtained, other than (I) any such transaction in which the holders of
outstanding Voting Securities immediately prior to the transaction
receive (or, in the case of a transaction involving a Subsidiary and
not the Company, retain), with respect to such Voting Securities,
voting securities of the surviving or transferee entity representing
more than 60 percent of the total voting power outstanding immediately
after such transaction, with the voting power of each such continuing
holder relative to other such continuing holders not substantially
altered in the transaction, or (II) any such transaction which would
result in a Related Party beneficially owning more than 60 percent of
the voting securities of the surviving entity outstanding immediately
after such transaction; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets
other than any such transaction which would result in a Related Party
owning or acquiring more than 60 percent of the assets owned by the
Company immediately prior to the transaction.
(ii) "Related Party" means (a) a majority-owned subsidiary of the
Company; (b) an employee or group of employees of the Company or any
majority-owned subsidiary of the Company; (c) a trustee or other fiduciary
holding securities under an
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employee benefit plan of the Company or any majority-owned subsidiary of the
Company; or (d) a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportion as their ownership of Voting
Securities.
(iii) "Voting Securities or Security" means any securities of the
Company which carry the right to vote generally in the election of directors.
8. GENERAL PROVISIONS.
(a) COMPLIANCE WITH LEGAL AND TRADING REQUIREMENTS. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to all
applicable federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of Shares under any Award
until completion of such stock exchange or market system listing or registration
or qualification of such Shares or other required action under any state or
federal law, rule or regulation as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Shares in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the Company
to register any Shares under federal or state law.
(b) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan
nor any action taken thereunder shall be construed as giving any employee,
consultant or director the right to be retained in the employ or service of the
Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any
way with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's, consultant's or director's employment or service at
any time.
(c) TAXES. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Shares, or any payroll or other
payment to an Eligible Person, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and Eligible
Persons to satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person's tax obligations.
(d) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of shareholders of the Company
or Participants, except that any
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such amendment, alteration, suspension, discontinuation, or termination shall be
subject to the approval of the Company's shareholders to the extent such
shareholder approval is required under Section 422 of the Code; PROVIDED,
HOWEVER, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation, or termination of the Plan may
materially and adversely affect the rights of such Participant under any Award
theretofore granted to him or her. The Committee may waive any conditions or
rights under, amend any terms of, or amend, alter, suspend, discontinue or
terminate, any Award theretofore granted, prospectively or retrospectively;
PROVIDED, HOWEVER, that, without the consent of a Participant, no amendment,
alteration, suspension, discontinuation or termination of any Award may
materially and adversely affect the rights of such Participant under any Award
theretofore granted to him or her.
(e) NO RIGHTS TO AWARDS; NO SHAREHOLDER RIGHTS. No Eligible Person
or employee shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Eligible Persons and
employees. No Award shall confer on any Eligible Person any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Person in accordance with the terms of the Award.
(f) UNFUNDED STATUS OF AWARDS. The Plan is intended to constitute
an "unfunded" plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award shall give any such Participant any rights that are greater than those
of a general creditor of the Company; PROVIDED, HOWEVER, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares, other Awards, or
other property pursuant to any Award, which trusts or other arrangements shall
be consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.
(g) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan
by the Board nor its submission to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of options and other awards otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.
(h) NOT COMPENSATION FOR BENEFIT PLANS. No Award payable under
this Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees, consultants or directors unless the Company shall
determine otherwise.
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(i) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) GOVERNING LAW. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, and any Award Agreement
shall be determined in accordance with the laws of Florida without giving
effect to principles of conflict of laws.
(k) EFFECTIVE DATE; PLAN TERMINATION. The Plan shall become
effective as of May 19, 2000 (the "Effective Date"), subject to approval by the
shareholders of the Company. The Plan shall terminate as to future awards on the
date which is ten (10) years after the Effective Date.
(l) TITLES AND HEADINGS. The titles and headings of the sections
in the Plan are for convenience of reference only. In the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
