EXHIBIT 10.11
INTACTA TECHNOLOGIES INC.
2000 Stock Incentive Plan
Section 1. Purposes; Definitions
The purpose of this Plan is to enable the Company
to offer to its employees and to employees of its Subsidiaries and Parent, if
any, and other persons who are expected to contribute to the success of the
Company, long term performance-based stock and/or other equity interests in the
Company, thereby enhancing their ability to attract, retain and reward such
key employees or other persons, and to increase the mutuality of interest
between those employees or other persons and the stockholders of the
Company.
For purposes of this Plan, the following terms
shall be defined as set forth below:
(a) "Board" means the Board of
Directors of Intacta Technologies Inc.
(b) "Cause" shall have the
meaning ascribed thereto in Section 5(b)(ix) below.
(c) "Change of Control" shall
have the meaning ascribed thereto in Section 9 below.
(d) "Code" means the Internal
Revenue Code of 1986, as amended from time to time, and any successor
thereto.
(e) "Committee" means the
Stock Incentive Committee of the Board or any other committee of the Board
which the Board may designate.
(f) "Company" means Intacta
Technologies Inc., a corporation organized under the laws of the State of
Nevada.
(g) "Deferred Stock" means
Stock to be received, under an award made pursuant to Section 7 below, at
the end of a specified deferral period.
(h) "Disability" means
disability as determined under procedures established by the Board or the
Committee for purposes of this Plan.
(i) "Early Retirement" means
retirement from active employment with the Company or any Parent or
Subsidiary prior to age 65, with the approval of the Board or the Committee,
for purposes of one or more award(s) under this Plan.
(j) "Exchange Act" means the
Securities Exchange Act of 1934, as amended, as in effect from time to
time.
(k) "Fair Market Value" of a
share of Stock means, as of any given date: (i) if the Stock is listed on a
national securities exchange or quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), the last
sale price of a share of Stock on such day, as reported by such exchange
or NASDAQ, or on a composite tape reflecting transactions on such exchange
or by NASDAQ, as the case may be; (ii) if the Stock is not listed on a
national securities exchange or quoted on the NASDAQ, but is traded in the
over-the-counter market, the average of the high bid and asked prices for a
share of Stock on such day as reported by the National Quotation Bureau,
Inc.; and (iii) if the fair market value of a share of Stock cannot be
determined pursuant to clause (i) or (ii) above, such price as the Board
of Directors or the Committee, as the case may be, shall determine, which
determination shall be conclusive as to the Fair Market Value of the
Stock.
(l) "Incentive Stock Option"
means any Stock Option which is intended to be and is designated as an
"incentive stock option" within the meaning of Section 422 of the Code, or
any successor thereto.
(m) "Non-Qualified Stock
Option" means any Stock Option that is not an Incentive Stock Option.
(n) "Normal Retirement" means
retirement from active employment with the Company or any Subsidiary on or
after age 65.
(o) "Other Stock-Based Award"
means an award under Section 8 below that is valued in whole or in part by
reference to, or is otherwise based upon, Stock.
(p) "Parent" means any present
or future parent of the Company, as such term is defined in Section 424(e)
of the Code, or any ;successor thereto.
(q) "Performance Objectives"
means performance objectives adopted by the Board or the Committee, as the
case may be, pursuant to the Plan for employees who have received awards
under the Plan. With respect to any award to an employee who is, or is
determined by the Board or the Committee, as the case may be, to be likely
to become a "covered employee" within the meaning of Section 162(m) of the
Code, the Performance Objectives shall be limited to specified levels of
growth in or peer company comparisons based upon (i) appreciation in the
price of Stock plus reinvested dividends over a specified period of time,
(ii) return on assets or (iii) book value per share, as the Committee may
determine, and the attainment of such Performance Objectives shall not be
deemed to have occurred until certified by the Board, or the, Committee, as
the case may be. Except in the case of a covered employee, if the Board or
the Committee, as the case may be, determines that a change in business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts it business, or other events or circumstances
under the Performance Objectives to be unsuitable, the Committee may modify
such Performance Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Board or the Committee, as the case
may be, deems appropriate.
(r) "Plan" means this Intacta
Technologies Inc. 2000 Stock Incentive Plan, as hereinafter amended from
time to time.
(s) "Restricted Stock" means
Stock, received under an award made pursuant to Section 6 below, that is
subject to restrictions imposed pursuant to said Section 6.
(t) "Retirement" means Normal
Retirement or Early Retirement.
(u) "Rule 16b-3" means Rule
16b-3 of the General Rules and Regulations under the Exchange Act, as in
effect from time to time, and any successor thereto.
(v) "Section 162(m)" means
Section 162(m) of the Code, as in effect from time to time, and any successor
thereto.
(w) "Securities Act" means the
Securities Act of 1933, as amended, as in effect from time to time.
(x) "Stock" means the Common
Stock of the Company, $.0001 par value per share.
(y) "Stock Option" or "Option"
means any option to purchase shares of Stock which is granted pursuant to the
Plan.
(z) "Subsidiary" means any
present or future (A) subsidiary corporation of the Company, as such term
is defined in Section 424(f) of the Code, or any successor thereto, or (B)
unincorporated business entity in which the Company owns, directly or
indirectly, 50% or more of the voting rights, capital or profits.
Section 2. Administration.
The Plan shall be administered by the Board, or
at its discretion, the Committee, the membership of which shall consist
solely of two or more members of the Board, each of whom shall serve at the
pleasure of the Board and shall be a "Non-Employee Director," as defined in
Rule 16b-3, and an "outside director," as defined in Section
2
162(m) of the Code, and shall be at all times constituted so as not to
adversely affect the compliance of the Plan with the requirements of Rule
16b-3 or with the requirements of any other applicable law, rule or
regulation.
The Board or the Committee, as the case may be,
shall have the authority to grant, pursuant to the terms of the Plan, to
officers and other employees or other persons eligible under Section 4
below: (i) Stock Options, (ii) Restricted Stock, (iii) Deferred Stock, and/or
(iv) Other Stock-Based Awards.
For purposes of illustration and not of
limitation, the Board or the Committee, as the case may be, shall have the
authority (subject to the express provisions of this Plan):
(i)
to select the officers and other employees of the Company or any Parent or
Subsidiary and other persons to whom Stock Options, Restricted Stock,
Deferred Stock and/or Other Stock-Based Awards may be from time to time
granted hereunder;
(ii)
to determine the Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock, Deferred Stock and/or Other Stock-Based Awards, or any
combination thereof, if any, to be granted hereunder to one or more eligible
persons;
(iii)
to determine the number of shares of Stock to be covered by each award
granted hereunder;
(iv)
to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any award granted hereunder (including, but not limited to,
share price, any restrictions or limitations, and any vesting acceleration,
exercisability and/or forfeiture provisions);
(v)
to determine the terms and conditions under which awards granted hereunder
are to operate on a tandem basis and/or in conjunction with or apart from
other awards made by the Company or any Parent or Subsidiary outside of this
Plan; and
(vi)
to determine the extent and circumstances under which Stock and other amounts
payable with respect to an award hereunder shall be deferred.
Subject to Section 10 hereof, The Board or the
Committee, as the case may be, shall have the authority to (i) adopt, alter
and repeal such administrative rules, guidelines and practices governing this
Plan as it shall, from time to time, deem advisable, (ii) interpret the terms
and provisions of this Plan and any award issued under this Plan (and to
determine the form and substance of all agreements relating thereto), and
(iii) to otherwise supervise the administration of the Plan.
Subject to the express provisions of the Plan,
all decisions made by the Board or the Committee, as the case may be, pursuant
to the provisions of the Plan shall be made in the Board or the Committee's
sole and absolute discretion and shall be final and binding upon all persons,
including the Company, its Parent and Subsidiaries and the Plan
participants.
Section 3. Stock Subject to Plan.
The total number of shares of Stock reserved
and available for distribution under this Plan shall be 1,400,000 shares.
Such shares may consist, in whole or in part, of authorized and unissued
shares or treasury shares.
If any shares of Stock that have been optioned
cease to be subject to a Stock Option for any reason, or if any shares of
Stock that are subject to any Restricted Stock award, Deferred Stock award
or Other Stock-Based Award are forfeited or any such award otherwise terminates
without the issuance of such shares, such shares shall again be available for
distribution under the Plan.
In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, extraordinary
distribution with respect to the Stock or other change in corporate structure
affecting the Stock, such substitutions or adjustments shall be made in the
(A) aggregate number and kind of shares reserved for issuance under this Plan,
(B) number, kind and exercise price of shares of Stock subject to outstanding
Options granted under
3
this Plan, and (C) number, kind, purchase price and/or appreciation base of
shares of Stock subject to other outstanding awards granted under this Plan,
as may be determined to be appropriate by the Board or the Committee, as the
case may be, in its sole discretion, in order to prevent dilution or
enlargement of rights; provided, however, that the number of shares subject
to any award shall always be a whole number. Such adjusted exercise price
shall also be used to determine the amount which is payable to the optionee
upon the exercise by the Board or the Committee, as the case may be, of the
alternative settlement right which is set forth in Section 5(b)(xi) below.
Subject to the provisions of the immediately
preceding paragraph, the maximum numbers of shares subject to Options,
Restricted Stock awards, Deferred Stock awards, and other Stock-Based awards
to any employee who is employed by the Company or any Parent or Subsidiary
on the last day of any taxable year of the Company, shall be 1,400,000 shares
during the term of the Plan.
Section 4. Eligibility.
Officers and other employees of the Company or any
Parent or Subsidiary (but excluding any person whose eligibility would adversely
affect the compliance of the Plan with the requirements of Rule 16b-3) who are
at the time of the grant of an award under this Plan employed by the Company
or any Parent or Subsidiary and who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company or any
Parent or Subsidiary, are eligible to be granted Options and awards under this
Plan. In addition, Non-Qualified Stock Options and other awards may be granted
under the Plan to any person, including, but not limited to, independent agents,
consultants and attorneys who the Board or the Committee, as the case may be,
believes has contributed or will contribute to the success of the Company or
any Parent or Subsidiary. Eligibility under the Plan shall be determined by
the Board or the Committee, as the case may be.
Subject to the adjustments permitted by Section
3 of this Plan, the maximum number of shares of Stock that can be earned by,
or for which Options can be granted to, any one individual over any consecutive
two-year period commencing on the effective date of this Plan is 1,400,000
shares. Subject to such maximum number of shares of Stock, the amount, if any,
that may be earned by a participant receiving such grant or grants may vary
in accordance with the level of achievement of the performance goal or goals
established by the Board or the Committee, as the case may be. The Board or
the Committee, as the case may be, may, in its sole discretion, include
additional conditions and restrictions in the agreement entered into in
connection with such awards under this Plan.
Section 5. Stock Options.
(a) Grant and Exercise.
Stock Options granted under this Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Any Stock Option granted
under this Plan shall contain such terms as the Board or the Committee, as the
case may be, may from time to time approve. The Board or the Committee, as the
case may be, shall have the authority to grant to any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options, and they
may be granted alone or in addition to other awards granted under this Plan.
To the extent that any Stock Option is not designated as an Incentive Stock
Option or does not qualify as an Incentive Stock Option, it shall constitute a
Non-Qualified Stock Option. The grant of an Option shall be deemed to have
occurred on the date on which the Board or the Committee, as the case may be,
by resolution, designates an individual as a grantee thereof, and determines
the number of shares of Stock subject to, and the terms and conditions of,
said Option.
Anything
in this Plan to the contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options or any agreement providing for Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify this Plan under Section
422 of the Code, or, without the consent of the Optionee(s) affected, to
disqualify any Incentive Stock Option under Section 422.
(b) Terms and Conditions.
Stock Options granted under this Plan shall be subject to the following
terms and conditions:
(i) Option Price. The option price per
share
of Stock purchasable under a Stock Option shall be
4
determined by the Board or the Committee, as the case may be, at the time of
grant but as to Incentive Stock Options shall be not less than 100% (110% in
the case of an Incentive Stock Option granted to an optionee ("10% Stockholder")
who, at the time of grant, owns Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Parent,
if any, or its Subsidiaries) of the Fair Market Value of the Stock at the
time of grant. The option price for Non-Qualified Stock Options shall be
determined by the Board or the Committee, as the case may be, at the time of
grant, [subject to the Nevada Private Corporation Law.]
(ii) Option Term. The term of each Stock
Option
shall be fixed by the Board or the Committee, as the case may be, but no
Incentive Stock Option shall be exercisable more than ten years (five years, in
the case of an Incentive Stock Option granted to a 10% Stockholder) after the
date on which the Option is granted.
(iii) Exercisability. Stock Options shall be
exercisable
at such time or times and subject to such terms and conditions as shall be
determined by the Board or the Committee, as the case may be, at the time of
grant. If the Board or the Committee, as the case may be, provides, in its
discretion, that any Stock Option is exercisable only in installments, the
Board or the Committee, as the case may be, may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Board or the Committee, as the case may be, shall
determine.
(iv) Method of Exercise. Subject to whatever
installment, exercise and waiting period provisions are applicable in a
particular case,
Stock Options may be exercised in whole or in part at any time during the
option period by giving written notice of exercise to the Company specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied
by payment in full of the purchase price which shall be in cash unless otherwise
provided in this clause (iv) or in Section 5(b)(xi) below or, unless otherwise
provided in the Stock Option agreement referred to in Section 5(b)(xii) below,
in whole shares of Stock which are already owned by the holder of the Option or
unless otherwise provided in the Stock Option agreement referred to in Section
5(b)(xii) below, partly in cash and partly in such Stock. Cash payments shall
be made by wire transfer, certified or bank check or personal check, in each
case payable to the order of the Company; provided, however, that the Company
shall not be required to deliver certificates for shares of Stock with respect
to which an Option is exercised until the Company has confirmed the receipt of
good and available funds in payment of the purchase price thereof. Payments
in the form of Stock (which shall be valued at the Fair Market Value of a share
of Stock on the date of exercise) shall be made by delivery of stock
certificates in
negotiable form which are effective to transfer good and valid title thereto
to the Company, free of any liens or encumbrances. In addition to the
foregoing, payment of the exercise price may be made by delivery to the Company
by the optionee of an executed exercise form, together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of the
shares covered by the option and deliver the sale or margin loan proceeds
directly to the Company. Except as otherwise expressly provided in this Plan
or in the Stock Option agreement referred to in Section 5(b)(xii) below, no
Option which is granted to a person who is at the time of grant an employee
of the Company or a Subsidiary or Parent of the Company may be exercised at
any time unless the holder thereof is then an employee of the Company or of
a Parent or a Subsidiary. The holder of an Option shall have none of the
rights of a shareholder with respect to the shares subject to the Option until
the optionee has given written notice of exercise, has paid in full for those
shares of Stock and, if requested by the Board or Committee, as the case may
be, has given the representation described in Section 12(a) below.
(v) Transferability; Exercisability. No Stock
Option shall be transferable by the optionee other than by will or by the
laws of descent and distribution or pursuant to a qualified domestic relations
order except as may be otherwise provided with respect to a Non-Qualified
Option pursuant to the specific provisions of the Stock Option agreement
pursuant to which it was issued as referred to in Section 5(b)(xii) below.
Except as otherwise provided in the Stock Option agreement relating to a
Non-Qualified Stock Option, all Stock Options shall be exercisable, during
the optionee's lifetime,
5
only by the optionee or his or her guardian or legal representative.
(vi) Termination by Reason of Death. Subject to
Section
5(b)(x) below, if an optionee's employment by the Company or any Parent or
Subsidiary terminates by reason of death, any Stock Option held by such optionee
may thereafter be exercised, to the extent then exercisable or on such
accelerated basis as the Board or Committee, as the case may be, may determine
at or after the time of grant, for a period of one year (or such other period
as the Board or the Committee, as the case may be, may specify at or after the
time of grant) from the date of death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.
(vii) Termination by Reason of Disability. Subject to
Section 5(b)(x) below, if an optionee's employment by the Company or any
Subsidiary terminates by reason of Disability, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination or on such accelerated basis as the
Board or the Committee, as the case may be, may determine at or after the
time of grant, for a period of one year (or such other period as the Board
or the Committee, as the case may be, may specify at or after the time of
grant) from the date of such termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such one year period (or
such other period as the Board or the Committee, as the case may be, shall
specify at or after the time of grant), any unexercised Stock Option held by
such optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date of
death or until the expiration of the stated term of such Stock Option, whichever
period is the shorter.
(viii)Termination by Reason of Retirement. Subject to Section
5(b)(x) below, if an optionee's employment by the Company or any Parent or
Subsidiary terminates by reason of Normal Retirement, any Stock Option held
by such optionee may thereafter be exercised by the optionee, to the extent
it was exercisable at the time of termination or on such accelerated basis
as the Board or the Committee, as the case may be, may determine at or after
the time of grant, for a period of three months (or such other period as the
Board or the Committee, as the case may be, may specify at or after the time
of grant) from the date of such termination of employment or the expiration
of the stated terms of such Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such three-month period
(or such other period as the Board or the Committee, as the case may be,
shall specify at or after the time of grant), any unexercised Stock Option
held by such optionee shall thereafter be exercisable to the extent to which
it was exercisable at the time of death for a period of one year from the
date of death or until the expiration of the stated terms of such Stock
Option, whichever period is the shorter. If an optionee's employment with
the Company or any Parent or Subsidiary terminates by reason of Early
Retirement, the Stock Option shall thereupon terminate; provided, however,
that if the Board or the Committee, as the case may be, so approves at the
time of Early Retirement, any Stock Option held by the optionee may thereafter
be exercised by the optionee as provided above in connection with termination
of employment by reason of Normal Retirement.
(ix) Other Termination. Subject to the provisions
of Section 12(g) below and unless otherwise determined by the Committee at or
after the time of grant, if
an optionee's employment by the Company or any Parent or Subsidiary terminates
for any reason other than death, Disability or Retirement, the Stock Option
shall thereupon automatically terminate, except that if the optionee is
involuntarily terminated by the Company or any Parent or a Subsidiary without
Cause (as hereinafter defined), such Stock Option may be exercised for a period
of three months (or such other period as the Board or the Committee, as the
case may be, shall specify at or after the time of grant) from the date of
such termination or until the expiration of the stated terms of such Stock
Option, whichever period is the shorter. For purposes of this Plan, "Cause"
shall mean (1) the conviction of the optionee of a felony under Federal law
or the law of the state in which such action occurred, (2) dishonesty by the
optionee in the course of fulfilling his or her employment duties, or (3)
the failure on the part of the optionee to perform his or her employment
duties in any material respect. In addition, with respect to an option granted
to an employee of the Company, a
6
Parent or a Subsidiary, for purposes of this
Plan, "Cause" shall also include any definition of "Cause" contained in any
employment agreement between the optionee and the Company, Parent or Subsidiary,
as the case may be.
(x) Additional Incentive Stock Option Limitation.
In the case of an Incentive Stock Option, the aggregate Fair Market Value of
Stock (determined at the time of grant of the Option) with respect to which
Incentive Stock Options are exercisable for the first time by an optionee
during any calendar year (under all such plans of optionee's employer
corporation and its Parent, if any, and Subsidiaries) shall not exceed
$100,000.
(xi) Alternative Settlement of Option. Upon the
receipt of written notice of exercise or if provided for with respect to a
Stock Option pursuant to the specific provisions of the Stock Option Agreement
pursuant to which it was issued and referred to in Section 5(b)(xii) below
(unless otherwise provided with respect to a Stock Option pursuant to the
specific provisions of the Stock Option Agreement pursuant to which it was
issued and referred to in Section 5(b)(xii) below), the Board or the Committee,
as the case may be, may elect to settle all or part of any Stock Option by
paying to the optionees an amount, in cash or Stock (valued at Fair Market
Value on the date of exercise), equal to the excess of the Fair Market Value
of one share of Stock, on the date of exercise over the Option exercise price,
multiplied by the number of shares of Stock with respect to which the optionee
proposes to exercise the Option. Any such settlements which relate to Options
which are held by optionees who are subject to Section 16(b) of the Exchange
Act shall comply with any "window period" provisions of Rule 16b-3, to the
extent applicable, and with such other conditions as the Board or Committee
may impose. No such discretion may be exercised unless the Stock Option
agreement permits the payment of the purchase price in that manner.
(xii) Stock Option Agreement. Each grant of a Stock
Option shall be confirmed by, and shall be subject to the terms of, an
agreement executed by the Company and the participant.
Section 6. Restricted Stock.
(a) Grant and Exercise.
Shares of Restricted Stock may be issued either alone or in addition
to or in tandem with other awards granted under this Plan. The Board or the
Committee, as the case may be, shall determine the eligible persons to whom,
and the time or times at which, grants of Restricted Stock will be made, the
number of shares to be awarded, the price (if any) to be paid by the recipient,
the time or times within which such awards may be subject to forfeiture (the
"Restriction Period"), the vesting schedule and rights to acceleration thereof,
and all other terms and conditions of the awards. The Board or the Committee,
as the case may be, may condition the grant of Restricted Stock upon the
attainment of specified Performance Objectives or such other factors as the
Board or the Committee, as the case may be, may determine.
(b) Terms and Conditions.
Each Restricted Stock award shall be subject to the following terms
and conditions:
(i) Restricted Stock, when issued, will be represented
by a stock certificate or certificates registered in the name of the holder
to whom such Restricted Stock shall have been awarded. During the Restriction
Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a restrictive
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in this Plan and the
Restricted Stock agreement referred to in Section 6(b)(iv) below. Such
certificates shall be deposited by the holder with the Company, together with
stock powers or other instruments of assignment, endorsed in blank, which
will permit transfer to the Company of all or any portion of the Restricted
Stock and any securities constituting Retained Distributions that shall be
forfeited or that shall not become vested in accordance with this Plan and
the applicable Restricted Stock agreement.
7
(ii) Restricted Stock shall constitute issued and outstanding
shares of Common Stock for all corporate purposes, and the issuance thereof
shall be made for at least the minimum consideration (if necessary) to permit
the shares of Restricted Stock to be deemed to be fully paid and nonassessable.
The holder will have the right to vote such Restricted Stock, to receive and
retain all regular cash dividends and other cash equivalent distributions as
the Board may in its sole discretion designate, pay or distribute on such
Restricted Stock and to exercise all other rights, powers and privileges of
a holder of Stock with respect to such Restricted Stock, with the exceptions
that (A) the holder will not be entitled to delivery of the stock certificate
or certificates representing such Restricted Stock until the Restriction
Period shall have expired and unless all other vesting requirements with
respect thereto shall have been fulfilled; (B) the Company will retain
custody of the stock certificate or certificates representing the Restricted
Stock during the Restriction Period; (C) other than regular cash dividends
and other cash equivalent distribution as the Board may in its sole discretion
designate, pay or distribute, the Company will retain custody of all
distributions ("Retained Distributions") made or declared with respect to
the Restricted Stock (and such Retained Distributions will be subject to the
same restrictions, terms and conditions as are applicable to the Restricted
Stock) until such time, if ever, as the Restricted Stock with respect to
which such Retained Distributions shall have been made, paid or declared
shall have become vested and with respect to which the Restriction Period
shall have expired; (D) the holder may not sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Stock or any Retained
Distributions during the Restriction Period; and (E) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Restricted
Stock agreement referred to in Section 6(b)(iv) below, or otherwise established
by the Committee with respect to any Restricted Stock and Retained Distributions
will cause a forfeiture of such Restricted Stock and any Retained Distributions
with respect thereto.
(iii) Upon the expiration of the Restriction Period with respect
to each award of Restricted Stock and the satisfaction of any other applicable
restrictions, terms and conditions (A) all or part of such Restricted Stock
shall become vested in accordance with the terms of the Restricted Stock
agreement referred to in Section 6(b)(iv) below, and (B) any Retained
Distributions with respect to such Restricted Stock shall become vested to
the extent that the Restricted Stock related thereto shall have become vested.
Any such Restricted Stock and Retained Distributions that do not vest shall
be forfeited to the Company and the holder shall not thereafter have any rights
with respect to such Restricted Stock and Retained Distributions that shall
have been so forfeited.
(iv) Each Restricted Stock award shall be confirmed by, and shall
be subject to the terms of, an agreement executed by the Company and the
participant.
Section 7. Deferred Stock.
(a) Grant and Exercise.
Deferred Stock may be awarded either alone or in addition to or
in tandem with other awards granted under the Plan. The Board or the
Committee, as the case may be, shall determine the eligible persons to whom
and the time or times at which Deferred Stock shall be awarded, the number
of shares of Deferred Stock to be awarded to any person, the duration of the
period (the "Deferral Period") during which, and the conditions under which,
receipt of the Deferred Stock will be deferred, and all the other terms and
conditions of the awards. The Board or the Committee, as the case may be,
may condition the grant of the Deferred Stock upon the attainment of specified
Performance Objectives or such other factors or criteria as the Board or the
Committee, as the case may be, shall determine.
(b) Terms and Conditions.
Each Deferred Stock award shall be subject to the following terms
and conditions:
(i) Subject to the provisions of this Plan and Deferred
Stock agreement referred to in Section 7(b)(vii) below, Deferred Stock awards
may not be sold, assigned, transferred, pledged or otherwise encumbered during
the Deferral Period. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 7(b)(vi) below, where
applicable), share certificates shall be
8
delivered to the participant, or his legal representative, in a number equal
to the shares of Stock covered by the Deferred Stock award.
(ii) As determined by the Committee at the time of award,
amounts equal to any dividends declared during the Deferral Period (or the
Additional Deferral Period referred to in Section 7(b)(vi) below, where
applicable) with respect to the number of shares covered by a Deferred Stock
award may be paid to the participant currently or deferred and deemed to be
reinvested in additional Deferred Stock.
(iii) Subject to the provisions of the Deferred Stock agreement
referred to in Section 7(b)(vii) below and this Section 7 and Section 12(g)
below, upon termination of participant's employment with the Company or any
Subsidiary for any reason during the Deferral Period (or the Additional
Deferral Period referred to in Section 7(b)(vi) below, where applicable) for
a given award, the Deferred Stock in question will vest or be forfeited in
accordance with the terms and conditions established by the Board or the
Committee, as the case may be, at the time of grant.
(iv) The Board or the Committee, as the case may be, may, after
grant, accelerate the vesting of all or any part of any Deferred Stock award
and/or waive the deferral limitations for all or any part of a Deferred Stock
award.
(v) In the event of hardship or other special circumstances of
a participant whose employment with the Company or any Parent or Subsidiary
is involuntarily terminated (other than for Cause), the Board or the Committee,
as the case may be, may waive in whole or in part any or all of the remaining
deferral limitations imposed hereunder or pursuant to the Deferred Stock
agreement referred to in Section 7(b)(vii) below with respect to any or all
of the participant's Deferred Stock.
(vi) A participant may request to, and the Board or the Committee,
as the case may be, may at any time, defer the receipt of an award (or an
installment of an award) for an additional specified period or until a specified
period or until a specified event (the "Additional deferral Period"). Subject
to any exceptions adopted by the Board or the Committee, as the case may be,
such request must be made at least one year prior to expiration of the Deferral
Period for such Deferred Stock award (or such installment).
(vii) Each Deferred Stock award shall be confirmed by, and shall be subject
to the terms of, an agreement executed by the Company and the participant.
Section 8. Other Stock-Based Awards.
(a) Grant and Exercise.
Other Stock-Based Awards, which may include performance shares and
shares valued by reference to the performance of the Company or any Subsidiary,
may be granted either alone or in addition to or in tandem with Stock Options,
Restricted Stock or Deferred Stock. The Board or the Committee, as the case
may be, shall determine the eligible persons to whom, and the time or times at
which, such awards shall be made, the number of shares of Stock to be awarded
pursuant to such awards, and all other terms and conditions of the awards. The
Board or the Committee, as the case may be, may also provide for the grant of
Stock under such awards upon the attainment of specified Performance Objectives
and/or completion of a specified performance period.
(b) Terms and Conditions.
Each Other Stock-Based Award shall be subject to the following terms
and conditions:
(i) Shares of Stock subject to an Other Stock-Based Award
may not be sold, assigned, transferred, pledged or otherwise encumbered prior
to the date on which the shares are issued, or, if later, the date on which any
applicable restriction or period of deferral lapses.
9
(ii) The recipient of Other Stock-Based Award shall be entitled
to receive, currently or on a deferred basis, dividends or dividend equivalents
with respect to the number of shares covered by the award, as determined by the
Board or the Committee, as the case may be, at the time of the award. The Board
or the Committee, as the case may be, may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Stock.
(iii) Any Other Stock-Based Award and any Stock covered by any Other
Stock-Based Award shall vest or be forfeited to the extent so provided in the
award agreement referred to in Section 8(b)(v) below, as determined by the
Board or the Committee, as the case may be.
(vi) In the event of the participant's Retirement, Disability or
death, or in case of special circumstances, the Board or the Committee, as the
case may be, may waive in whole or in part any or all of the limitations
imposed hereunder (if any) with respect to any or all of an Other Stock-Based
Award.
(v) Each Other Stock-Based Award shall be confirmed by, and
shall be subject to the terms of, an agreement executed by the Company and by
the participant.
Section 9. Change of Control Provisions.
(a) A "Change of Control" shall
be deemed to have occurred on the tenth day after:
(i) any individual, entity or group (as defined in Section
13(d)(3) of the Exchange Act), becomes, directly or indirectly, the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than 50% of the then outstanding shares of the Company's capital stock
entitled to vote generally in the election of directors of the Company; or
(ii) the commencement of, or the first public announcement of the
intention of any individual, firm, corporation or other entity or of any group
(as defined in Section 13(d)(3) of the Exchange Act) to commence, a tender or
exchange offer subject to Section 14(d)(1) of the Exchange Act for any class
of the Company's capital stock; or
(iii) the stockholders of the Company approve (A) a definitive agreement
for the merger or other business combination of the Company with or into
another corporation pursuant to which the stockholders of the Company do not
own, immediately after the transaction, more than 50% of the voting power of
the corporation that survives, or (B) a definitive agreement for the sale,
exchange or other disposition of all or substantially all of the assets of
the Company, or (C) any plan or proposal for the liquidation or dissolution
of the Company; provided, however, that a "Change of Control" shall not be
deemed to have taken place if beneficial ownership is acquired (A) directly
from the Company, other than an acquisition by virtue of the exercise or
conversion of another security unless the security so converted or exercised
was itself acquired directly from the Company, or (B) by, or a tender or
exchange offer is commenced or announced by, the Company, any profit-sharing,
employee ownership or other employee benefit plan sponsored or maintained by
the Company; or any trustee of or fiduciary with respect to any such plan
when acting in such capacity.
(b) In the event of a "
Change of Control" as defined in Section 9(a) above, awards granted under
this Plan shall be subject to the following provisions, unless the provisions
of this Section 9 are suspended or terminated by the Board prior to the
occurrence of such a "Change of Control" and, except with respect to any
Stock Option pursuant to the specific provisions of the Stock Option Agreement
pursuant to which it was issued as referred to in Section 5(b)(xii) above:
(i) all outstanding Stock Options which have been outstanding
for at least one year shall become exercisable in full, whether or not otherwise
exercisable at such time, and any such Stock Option shall remain exercisable
in full thereafter until it expires pursuant to its terms; and
(ii) all restrictions and deferral limitations contained in
Restricted Stock awards, Deferred Stock
10
awards and Other Stock-Based Awards granted under the Plan shall lapse.
Section 10. Amendments and Termination.
The Board may at any time, and from time to
time, amend any of the provisions of this Plan, and may at any time suspend
or terminate the Plan; provided, however, that no such amendment shall be
effective unless and until it has been duly approved by the holders of the
outstanding shares of Stock if the failure to obtain such approval would
adversely affect the compliance of the Plan with the requirements of Rule
16b-3, Section 162(m) or any other applicable law, rule or regulation. The
Board or the Committee, as the case may be, may amend the terms of any Stock
Option or other award theretofore granted under the Plan; provided, however,
that subject to Section 3 above, no such amendment may be made by the Board
or the Committee, as the case may be, which in any material respect impairs
the rights of the optionee or participant without the optionee's or
participant's consent, except for such amendments which are made to cause
this Plan to qualify for the exemption provided by Rule 16b-3 or to be in
compliance with the provisions of Section 162(m).
Section 11. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded"
plan for incentive and deferred compensation. With respect to any payments
not yet made to a participant or optionee by the Company, nothing contained
herein shall give any such participant or optionee any rights that are greater
than those creditor of the Company.
Section 12. General Provisions.
(a) The Board or the
Committee, as the case may be,
may require each person acquiring shares of Stock Option or other award under
this Plan to represent to and agree with the Company in writing that the
optionee or participant is acquiring the shares for investment without a
view towards the distribution thereof.
All certificates for
shares of Stock delivered under this Plan shall be subject to such stop
transfer orders and other restrictions as the Board or the Committee, as the
case may be, may deem to be advisable in order to assure compliance with the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange or association upon which the Stock is then
listed or quoted, any applicable Federal or state securities law, and any
applicable corporate law, and the Board or the Committee, as the case may be,
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in
the Plan shall prevent the Board from adopting such other or additional
incentive arrangements as it may deem desirable, including, but not limited
to, the granting of stock options and the awarding of stock and cash otherwise
than under this Plan; and such arrangements may be either generally applicable
or applicable only in specific cases.
(c) Nothing contained in
this Plan or in any award hereunder shall be deemed to confer upon any employee
of the Company or any Parent or Subsidiary any right to continued employment
with the Company or any Parent or Subsidiary, nor shall it interfere in any
way with the right of the Company or any Parent or Subsidiary to terminate
the employment of any of its employees at any time.
(d) No later than the date
as of which an amount first becomes includable in the gross income of the
participant for Federal income tax purposes with respect to any Option or
other award under this Plan, the participant shall pay to the Company, or
make arrangements satisfactory to the Board or the Committee, as the case
may be, regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such amount. If
permitted by the Board or the Committee, as the case may be, tax withholding
or payment obligations may be settled with Stock, including Stock that is
part of the award that gives rise to the withholding requirement. The
obligations of the Company under this Plan shall be conditional upon such
payment or arrangements, and the Company and any Subsidiary shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant from the Company or any
Parent or Subsidiary.
11
(e) This Plan and all
awards made and actions taken thereunder shall be governed by and construed
in accordance with the laws of the State of Nevada (without regard to choice
of law provisions).
(f) Any Stock Option
granted or other award made under this Plan shall not be deemed compensation
for purposes of computing benefits under any retirement plan of the Company
or any Parent or Subsidiary and shall not affect any benefits under any other
benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required
by specific reference in any such other plan to awards under this Plan).
(g) A leave of absence,
unless otherwise determined by the Committee prior to the commencement
thereof, shall not be considered a termination of employment. Any Stock
Option granted or awards made under this Plan shall not be affected by any
change of employment, so long as the holder continues to be an employee of
the Company or any Parent or Subsidiary.
(h) Except as otherwise
expressly provided in this Plan, no right or benefit under this Plan may be
alienated, sold, assigned, hypothecated, pledged, exchanged, transferred,
encumbranced or charged, and any attempt to alienate, sell, assign, hypothecate,
pledge, exchange, transfer, encumber or charge the same shall be void. No
right or benefit hereunder shall in any manner be subject to the debts,
contracts or liabilities of the person entitled to such benefit.
(i) The obligations of
the Company with respect to all Stock Options and awards under this Plan
shall be subject to (A) all applicable laws, rules and regulations, and such
approvals by any governmental agencies as may be required, including, without
limitation, the effectiveness of a registration statement under the Securities
Act, and (B) the rules and regulations of any securities exchange or association
on which the Stock may be listed or quoted.
(j) It is the intention
of the Company that this Plan complies with the requirements of Rule 16b-3,
Section 162(m) and all other applicable laws, rules and regulations, and any
ambiguities or inconsistencies in the construction of any of the provisions
of this Plan shall be interpreted to give effect to such intention. If any
of the terms or provisions of this Plan conflict with the requirements of
Rule 16b-3, or with the requirements of Section 162(m) or any other applicable
law, rule or regulation, and with respect to Incentive Stock Options under
Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict. With respect to Incentive Stock
Options, if this Plan does not contain any provision required to be included
herein under Section 422 of the Code, such provision shall be deemed to be
incorporated herein with the same force and effect as if such provision had
been set out at length herein.
(k) The Board or the
Committee, as the case may be, may terminate any Stock Option or other award
made under this Plan if a written agreement relating thereto is not executed
and returned to the Company within 30 days after such agreement has been
delivered to the optionee or participant for his or her execution.
(l) The grant of awards
pursuant to this Plan shall not in any way effect the right or power of the
Company to make reclassifications, reorganizations or other changes of or to
its capital or business structure or to merge, consolidate, liquidate, sell
or otherwise dispose of all or any part of its business or assets.
Section 13. Effective Date of Plan.
The Plan shall be effective as of the date of
the approval and adoption thereof at a meeting of the shareholders of the
Company.
Section 14. Term of Plan.
This Plan shall terminate on the tenth anniversary
of its effective date, and no Stock Option, Restricted Stock Award, Deferred
Stock award or Other Stock-Based Award shall be granted pursuant to this
Plan after said date. Awards granted on or prior to such date may extend
beyond that date.
