EXHIBIT 10.1
EXHIBIT A
The Neptune Society, Inc.
1999 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this 1999 Stock Incentive Plan (the "Plan") is
to enable The Neptune Society, Inc., a Florida corporation (the "Company"), to
attract and retain the services of (a) selected employees, officers and
directors of the Company or of any parent or subsidiary corporation of the
Company, and (b) selected nonemployee agents, consultants, advisers and
independent contractors of the Company or any parent or subsidiary of the
Company.
2. Shares Subject to the Plan. Subject to adjustment as provided below
and in paragraph 8, up to 1,800,000 (one-million-eight-hundred-thousand) shares
of common stock of the Company (the "Shares") shall be offered and issued under
the Plan. If an option granted under the Plan expires, terminates or is
canceled, the unissued Shares subject to such option shall again be available
under the Plan. If Shares sold or awarded as a bonus under the Plan are
forfeited to the Company or repurchased by the Company, the number of Shares
forfeited or repurchased shall again be available under the Plan.
3. Effective Date and Duration of Plan.
(a) Effective Date. The Plan shall become effective when adopted by
the Board of Directors of the Company (the "Board"), unless a later date is
specified by the Board. However, no option granted under the Plan shall become
exercisable until the Plan is approved by the affirmative vote of the holders of
a majority of the outstanding voting capital shares of the Company represented
at a shareholder meeting at which a quorum is present, and any such grants of
options under the Plan prior to such approval shall be conditioned on and
subject to such approval. Subject to this limitation, options to purchase Shares
may be granted and Shares may be awarded as bonuses or sold under the Plan at
any time after the effective date and before termination of the Plan.
(b) Duration. No options may be granted pursuant to paragraph 6 of the
Plan on or after May 31, 2009. However, the Plan shall continue in effect until
all Shares available for issuance under the Plan have been issued and all
restrictions on such Shares have lapsed. The Board may suspend or terminate the
Plan at any time, except with respect to options and Shares subject to
restrictions then outstanding under the Plan. The Administrator may amend or
terminate this Plan or modify or amend options granted under this Plan,
including, without limitation, such modifications or amendments as are necessary
to maintain compliance with applicable statutes, rules or regulations.
Termination of the Plan shall not affect any outstanding options, any right of
the Company or its shareholders to repurchase Shares or the forfeitability of
options granted or Shares issued under the Plan.
4. Administration.
(a) The Plan shall be administered by a plan administrator (the
"Administrator") that shall be the Board or a committee appointed by the Board
(the "Committee"). The Administrator shall determine and designate from time to
time the individuals to whom grants of options shall be made, the amount of the
grants, and the other terms and conditions of the grants; and may amend or
terminate this Plan or modify or amend options granted under this Plan,
including, without limitation, such modifications or amendments as are necessary
to maintain compliance with applicable statutes, rules or regulations as
provided in paragraphs 3 and 11, subject to regulatory approval, if required. At
any time when the officers and directors of the Company are subject to Section
16(b) of the United States Securities Exchange Act of 1934 (the "Exchange Act"),
the Committee shall consist solely of "Non-employee" directors as such term is
defined from time to time in Rule 16b-3 under the Exchange Act. In addition, at
any time when the officers and directors of the Company are subject to Section
16(b) of the Exchange Act, no member of the Committee shall be eligible to
receive any grant under the Plan while such person serves as a Committee member.
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(b) Subject to the provisions of the Plan, and to regulatory approval,
if required, the Administrator may from time to time adopt and amend rules and
regulations relating to administration of the Plan, accelerate any exercise
date, waive or modify any restriction applicable to Shares (except those
restrictions imposed by law) and make all other determinations in the judgment
of the Administrator necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and related
agreements by the Administrator shall be final and conclusive. The Administrator
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any related agreement in the manner and to the extent it shall
deem expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
5. Types of Grants - Eligibility. The Administrator may, from time to
time, take the following actions under the Plan: (i) grant Incentive Stock
Options, as defined in Section 422 of the United States Internal Revenue Code of
1986, as amended (the "Code"), as provided in paragraph 6 (b); and, (ii) grant
options other than Incentive Stock Options ("Nonqualified Stock Options") as
provided in paragraph 6(c). Any such grants may be made to directors or
employees (including employees who are officers or directors) of the Company or
of any parent or subsidiary corporation of the Company, and to other individuals
described in paragraph 1 who the Administrator, in its sole discretion, believes
have made or will make an important contribution to the Company or its parent or
subsidiaries; provided, however, that only employees of the Company or a parent
or subsidiary shall be eligible to receive Incentive Stock Options under the
Plan. The Administrator shall select the individuals to whom grants shall be
made and shall specify the action taken with respect to each individual to whom
a grant is made under the Plan. At the discretion of the Administrator, an
individual may be given an election to surrender a grant in exchange for a new
grant under the Plan.
6. Option Grants.
(a) Grant. Each option granted under the Plan shall be evidenced by a
stock option agreement, in substantially the same form as attached hereto as
Exhibit A. With respect to each option grant, the Administrator shall determine
the number of Shares subject to the option, the option price, the period of the
option, and the time or times at which the option may be exercised and whether
the option is an Incentive Stock Option or a Nonqualified Stock Option.
(b) Incentive Stock Options. Incentive Stock Options granted under the
Plan shall be subject to the following terms and conditions:
(i) No employee may be granted Incentive Stock Options under the
Plan such that the aggregate fair market value, on the date of grant,
of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by that employee during any calendar
year under the Plan and under any other Incentive Stock Option plan
(within the meaning of Section 422 of the Code) of the Company or of
any parent or subsidiary corporation of the Company exceeds $100,000.
Any portion of an option which exceeds the annual limit shall not be
void but rather shall be a Nonqualified Stock Option.
(ii) An Incentive Stock Option may be granted under the Plan to
an employee possessing more than 10 percent of the total combined
voting power of all classes of shares of the Company or of any parent
or subsidiary corporation of the Company only if the option price is
at least 110 percent of the fair market value, as described in
paragraph 6 (b) (iv), of the Shares subject to the option on the date
it is granted, and the option by its terms is not exercisable more
than five years from the date of grant.
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(iii) Subject to paragraphs 6(b) (ii) and 6(e), Incentive Stock
Options granted under the Plan shall continue in effect for the period
fixed by the Administrator, except that no Incentive Stock Option
shall be exercisable more than 10 years from the date of grant.
(iv) The option price per Share shall be determined by the
Administrator at the time of grant. Subject to paragraph 6(b) (ii),
the option price shall not be less than 100 percent of the fair market
value of the Shares covered by the Incentive Stock Option at the date
the option is granted. For purposes of the Plan, the fair market value
of the Shares shall be determined by the Plan Administrator in good
faith.
(v) The Administrator may at any time without the consent of the
optionee convert an Incentive Stock Option into a Nonqualified Stock
Option.
(c) Nonqualified Stock Options. Nonqualified Stock Options shall be
subject to the following additional terms and conditions:
(i) The option price for Nonqualified Stock Options shall be
determined by the Administrator at the time of grant and may be any
amount that the Administrator shall specify. The option price may not
be less than 75 percent of the fair market value of the Shares covered
by the Nonqualified Stock Option on the date of grant. The fair market
value of the Shares covered by a Nonqualified Stock Option shall be
determined pursuant to paragraph 6(b)(iv).
(ii) Nonqualified Stock Options granted under the Plan shall
continue in effect for the period fixed by the Administrator.
(d) Exercise of Options. Except as provided in paragraph 6(f) or as
determined by the Administrator, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee is employed by or in
the service of the Company or any parent or subsidiary corporation of the
Company and shall have been so employed or have provided such service
continuously since the date such option was granted. With respect to
Nonqualified Stock Options, absence on leave or on account of illness or
disability under rules established by the Administrator shall not, however, be
deemed an interruption of employment for purposes of the Plan. Unless otherwise
determined by the Administrator, vesting of options shall not continue during an
absence on leave (including an extended illness) or on account of disability. At
such time as the officers and directors of the Company become subject to Section
16(b) of the Exchange Act, no option may be exercised by an officer or director
of the Company within six months of the date of grant. Except as provided in
paragraphs 6(f), 8 and 9, options granted under the Plan may be exercised from
time to time over the period stated in each option in such amounts and at such
times as shall be prescribed by the Administrator, provided that options shall
not be exercised for fractional shares.
(e) Nontransferability. Options granted under this Plan and the rights
and privileges conferred by this Plan may not be transferred, assigned, pledged
or hypothecated in any manner (whether by operation of law or otherwise) other
than by will, by applicable laws of descent and distribution or (except in the
case of an Incentive Stock Option) pursuant to a qualified domestic relations
order, and shall not be subject to execution, attachment or similar process;
provided however, that any stock option agreement may provide or be amended to
provide that a Nonqualified Stock Option to which it relates is transferable
without payment of consideration to immediate family members of the optionee or
to trusts or partnerships established exclusively for the benefit of the
optionee and the optionee's immediate family members. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of any option or of
any right or privilege conferred by this Plan contrary to the provisions hereof,
or upon the sale, levy or any attachment or similar process upon the rights and
privileges conferred by this Plan, such option shall thereupon terminate and
become null and void.
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(f) Termination of Employment or Service. Unless otherwise set forth
in the optionee's stock option agreement:
(i) In the event the employment or service of the optionee by the
Company or a parent or subsidiary corporation of the Company
terminates for any reason other than because of death, physical
disability, cause or voluntary termination not related to normal
retirement, the option may be exercised at any time prior to the
expiration date of the option or the expiration of three months after
the date of such termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the
option at the date of such termination.
(ii) In the event of the termination of the optionee's employment
or service with the Company or a parent or subsidiary corporation of
the Company because the optionee becomes disabled (within the meaning
of Section 22(e)(3) of the Code), the option may be exercised at any
time prior to the expiration date of the option or the expiration of
one year after the date of such termination, whichever is the shorter
period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.
(iii) In the event of the death of an optionee while employed by
or providing services to the Company or a parent or subsidiary
corporation of the Company, the option may be exercised at any time
prior to the expiration date of the option or the expiration of one
year after the date of such death, whichever is the shorter period,
but only if and to the extent the optionee was entitled to exercise
the option on the date of death, and only by the person or persons to
whom such optionee's rights under the option shall pass by the
optionee's will or by the laws of descent and distribution of the
optionee's state of domicile at the time of death.
(iv) In the event of termination of the optionee's employment or
service with the Company or a parent or subsidiary corporation of the
Company for cause (as determined in the sole discretion of the
Administrator and defined in the optionee's stock option agreement) or
because of voluntary termination not related to normal retirement, the
option expires on the date of such termination.
(v) The Administrator, at the time of grant or at any time
thereafter, may extend the three-month and one-year expiration periods
any length of time not later than the original expiration date of the
option, and may increase the portion of an option that is exercisable,
subject to such terms and conditions as the Administrator may
determine.
(vi) To the extent that the option of any deceased optionee or of
any optionee whose employment or service terminates is not exercised
within the applicable period, all further rights to purchase Shares
pursuant to such option shall cease and terminate.
(g) Purchase of Shares. Unless the Administrator determines otherwise,
Shares may be acquired pursuant to an option only upon receipt by the Company of
notice in writing from the optionee of the optionee's intention to exercise,
specifying the number of Shares as to which the optionee desires to exercise the
option, and, if required to comply with the United States Securities Act of
1933, as amended, or state securities laws, the notice shall include a
representation that it is the optionee's present intention to acquire the Shares
for investment and not with a view to distribution. The certificates
representing the Shares shall bear any legends required by the Administrator.
Unless the Administrator determines otherwise, on or before the date specified
for completion of the purchase of Shares pursuant to an option, the optionee
must have paid the Company the full purchase price of such Shares in cash.
Unless the Administrator determines otherwise, all payments made to the
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Company in connection with the exercise of an option must be made by a certified
or cashier's bank check or by the transfer of immediately available funds. No
Shares shall be issued until full payment therefor has been made. Each optionee
who has exercised an option shall immediately upon notification of the amount
due, if any, pay to the Company in cash amounts necessary to satisfy any
applicable federal, state and local tax withholding requirements. If additional
withholding is or becomes required beyond any amount deposited before delivery
of the certificates, the optionee shall pay such amount to the Company on
demand. If the optionee fails to pay the amount demanded, the Company or any
parent or subsidiary corporation of the Company may withhold that amount from
other amounts payable to the optionee by the Company or the parent or subsidiary
corporation, including salary, subject to applicable law.
7. Additional Provisions.
(a) The Administrator may include in a stock option agreement relating
to benefits under the Plan such additional terms and provisions as the
Administrator shall, in its discretion, see fit to include, including, without
limitation, restriction on transfer of the Shares or conditions under which the
Company shall or may repurchase the Shares.
(b) Lock-Up Agreement. If a Qualified Public Offering (as defined
below) of the common stock of the Company shall be proposed, each recipient of
options or Shares, at the request of a managing underwriter of such Qualified
Public Offering, enter into any agreement (a "Lock-Up Agreement") proposed by
such managing underwriter not to transfer such holder's Shares, any right to
acquire any Shares of the Company or any securities exercisable for or
convertible into Shares for a period not exceeding six months after the closing
date of such Qualified Public Offering. Whether or not a Qualified Public
Offering shall have been proposed, the Company may delay, and may instruct its
transfer agent to delay, the delivery of any certificate or certificates for
Shares until the Company shall have received a written undertaking from the
recipient that such recipient will enter into any Lock-Up Agreement as may be
requested by a managing underwriter of a proposed Qualified Public Offering.
A "Qualified Public Offering" is defined as an underwritten public offering
of the Company's common stock pursuant to an effective registration statement
under the United States Securities Act of 1933, as amended, covering the offer
and sale of common stock for cash for the account of the Company to the public.
8. Changes in Capital Structure. If the shares outstanding common stock
of the Company are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company or
of another corporation by reason of any recapitalization, reclassification,
share split, combination of shares or dividend payable in shares, the
Administrator shall make appropriate adjustments in the number and kind of
Shares as to which outstanding options or portions thereof then unexercised,
shall be exercisable, so that the participant's proportionate interest before
and after the occurrence of the event is maintained, provided that this
paragraph 8 shall not apply with respect to transactions referred to in
paragraph 9. The Administrator may also require that any securities issued in
respect of or exchanged for Shares issued hereunder that are subject to
restrictions be subject to similar restrictions. Notwithstanding the foregoing,
the Administrator shall have no obligation to effect any adjustment that would
or might result in the issuance of fractional shares, and any fractional shares
resulting from any adjustment may be disregarded or provided for in any manner
determined by the Administrator. Any such adjustment made by the Administrator
shall be conclusive, and shall bind holders of outstanding options and Shares
under the Plan.
9. Effect of Reorganization or Liquidation.
(a) Cash, Shares or Other Property for Shares. Except as provided in
paragraph 9(b), upon a merger, consolidation, reorganization, plan of exchange
or liquidation involving the Company, as a result of which the shareholders of
the Company receive cash, shares or other property in exchange for or in
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connection with their common stock (any such transaction to be referred to in
this paragraph 9 as an "Event"), any option granted hereunder shall terminate.
At such time as the officers and directors of the Company become subject to
Section 16(b) of the Exchange Act, with respect to an option granted to an
officer or director less than six months prior to any Event, such officer or
director shall have the right to require the Company to purchase such vested
option at a purchase price computed pursuant to paragraph 9(c) during the 30-day
period following the expiration of six months following the date of such grant,
and this right shall apply even if the option has otherwise terminated pursuant
to paragraph 6(f) following such Event.
(b) Shares for Shares. If the shareholders of the Company receive
capital shares of another corporation ("Exchange Shares") in exchange for their
shares of common stock in any transaction involving a merger, consolidation,
reorganization, or plan of exchange, all options granted hereunder shall be
converted into options to purchase Exchange Shares, unless the Administrator, in
its sole discretion, determines that any or all such options granted hereunder
shall not be converted, but instead shall terminate in accordance with the
provisions of paragraph 9(a). The amount and price of converted options shall be
determined by adjusting the amount and price of the options granted hereunder to
take into account the relative values of the Exchange Shares and the shares of
common stock in the transaction.
(c) Purchase Price. With respect to an option granted to an officer or
director who is subject to the provisions of Section 16(b) of the Exchange Act
less than six months prior to an Event, the purchase price payable pursuant to
paragraph 9(a) shall be computed as follows:
(i) With respect to a Nonqualified Stock Option, the purchase
price shall be the product of (A) the excess, if any, of the higher of
(1) the purchase price paid for each Share in the Event, or (2) the
highest fair market value of a Share (determined pursuant to paragraph
6(b) (iv)) during the 30-day period ending on the day the Event
occurs, over the option price, and (B) the number of Shares covered by
the option.
(ii) With respect to an Incentive Stock Option, the purchase
price shall be the product of (A) the excess, if any, of the fair
market value of each Share (determined pursuant to paragraph 6(b)(iv))
on the date of exercise over the option price, and (B) the number of
Shares covered by the option.
(iii) No option may be exercised in connection with an Event if
the purchase price determined under this paragraph 9(c) is negative.
(d) The rights set forth in this paragraph 9 shall be
transferable only to the extent the related option is transferable.
10. Corporate Mergers, Acquisitions, Etc. The Administrator may also grant
options under the Plan having terms, conditions and provisions that vary from
those specified in the Plan; provided that any such grants are granted in
substitution for, or in connection with the assumption of, existing options and
rights to acquire or purchase shares by another corporation and assumed or
otherwise agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or shares, separation, reorganization or liquidation to which the Company or a
parent or subsidiary corporation of the Company is a party.
11. Amendment of Plan. The Administrator may at any time, and from time to
time, modify or amend the Plan in such respects as it shall deem advisable
because of changes in the law while the Plan is in effect or for any other
reason. Except as provided in paragraphs 6 (b) (v), 8 and 9, however, no change
in an option already granted shall be made without the written consent of the
holder of such option.
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12. Approvals. The obligations of the Company under the Plan are subject
to the approval of regulatory agencies, state and federal authorities or
agencies with jurisdiction in the matter. The Company shall not be obligated to
issue or deliver Shares under the Plan if such issuance or delivery would
violate applicable state or federal securities laws, or if compliance with such
laws would, in the opinion of the Administrator, be unduly burdensome or require
the disclosure of information which would not be in the Company's best
interests.
13. Employment and Service Rights. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any parent or subsidiary
corporation of the Company or shall interfere in any way with the right of the
Company or any parent or subsidiary corporation of the Company by whom such
employee is employed to terminate such employee's employment at any time, for
any reason, with or without cause, or to increase or decrease such employee's
compensation or benefits; or (ii) confer upon any person engaged by the Company
or any parent or subsidiary corporation of the Company any right to be retained
or employed by the Company or the parent or subsidiary or to the continuation,
extension, renewal, or modification of any compensation, contract, or
arrangement with or by the Company or the parent or subsidiary.
14. Rights as a Shareholder. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Shares until the date
of issue to the recipient of a share certificate for such Shares. Except as
otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
share certificate is issued.
Approved by the Board of Directors of the Company on June 1, 1999.
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