SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIDEL TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
75-2193593
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(I.R.S. employer identification no.)
5847 San Felipe, Suite 900, Houston, Texas 77057
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(Address of principal executive offices) (Zip Code)
1997 LONG-TERM INCENTIVE PLAN & 1989 INCENTIVE STOCK OPTION PLAN
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(Full title of the plan)
Leonard L. Carr, Jr.
Senior Vice President
Tidel Technologies, Inc.
5847 San Felipe, Suite 900
Houston, Texas 77057
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(Name and address of agent for service)
(713) 783-8200
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(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggregate Amount of
to be to be price per offering registration
registered(1) registered(2) share(3) price(3) fee
<PAGE>
<S> <C> <C> <C> <C>
1997 Long-Term Incentive
Plan (the "Incentive Plan")
Common Stock, $.01 par
value and 1989 Incentive
Stock Option Plan (the 1,438,250
"Stock Option Plan") shares $1.65 $2,373,112.50 $626.50
</TABLE>
(1) The securities to be registered include options and rights to acquire
Common Stock.
(2) There are also registered hereby such indeterminate number of shares of
Common Stock as may become issuable by reason of the operation of the
anti-dilution provisions of the Incentive Plan and the Stock Option Plan.
(3) Consists of an aggregate of 1,438,250 shares with respect to which options
were granted under the Incentive Plan and the Stock Option Plan at an
average exercise price of $1.65 per share.
<PAGE>
SUBJECT TO COMPLETION, DATED February 14, 2000
PROSPECTUS
1,438,250 SHARES
TIDEL TECHNOLOGIES, INC.
Common Stock ($.01 par value)
This Prospectus relates to the reoffer and resale by certain selling
shareholders of shares of our Common Stock, $.01 par value, that may be issued
by us to the Selling Shareholders upon the exercise of outstanding stock options
granted pursuant to our 1997 Long-Term Incentive Plan and our 1989 Incentive
Stock Option Plan. The offer and sale of the shares to the selling shareholders
were previously registered under the Securities Act of 1933, as amended. With
respect to the shares that may be issued to any of the selling shareholders or
additional persons who may be deemed affiliates, this Prospectus also relates to
certain shares underlying options which have not as of this date been granted.
If and when such options are granted, we will distribute a Prospectus
Supplement. The shares are being reoffered and resold for the account of the
selling shareholders and we will not receive any of the proceeds from the resale
of the shares.
The selling shareholders have advised us that the resale of their
shares may be effected from time to time in one or more transactions on the
Nasdaq Stock Market, in negotiated transactions or otherwise at market prices
prevailing at the time of the sale or at prices otherwise negotiated. See "Plan
of Distribution." We will bear all expenses in connection with the preparation
of this Prospectus.
Our common stock is traded on the Nasdaq Stock Market under the symbol
"ATMS." On February 10, 2000, the closing price for the common stock, as
reported by the Nasdaq Stock Market, was $4.375.
Neither the Securities and Exchange Commission nor any state securities
commission has determined whether this prospectus in truthful or complete. They
have not made, nor will they make, any determination as to whether anyone should
buy these securities. Any representation to the contract is a criminal offense
The date of this Prospectus is February 14, 2000.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the SEC's public reference room
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You
may obtain further information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public over the Internet at the SEC's web site at http://www.sec.gov. You may
also request copies of such documents, upon payment of a duplicating fee, by
writing to the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Our common
stock is listed on the Nasdaq SmallCap Market and such reports and other
information may also be inspected at the offices of Nasdaq at 1735 "K" Street,
N.W., Washington, D.C. 20006-1500.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION........................................ 2
INCORPORATION BY REFERENCE................................................. 3
GENERAL INFORMATION........................................................ 4
USE OF PROCEEDS............................................................ 4
SELLING SHAREHOLDERS....................................................... 4
PLAN OF DISTRIBUTION....................................................... 6
LEGAL MATTERS.............................................................. 6
EXPERTS.................................................................... 7
ADDITIONAL INFORMATION..................................................... 7
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus and information that we file later
with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"):
(1) Our Annual Report on Form 10-K for the year ended September 30,
1999;
(2) "Description of Capital Stock" included in our Form 10 dated
November 9, 1988, as amended.
You may request a copy of these filings (excluding the exhibits to such
filings which we have not specifically incorporated by reference in such
filings) at no cost, by writing or telephoning us at the following address:
Tidel Technologies, Inc.
5847 San Felipe
Suite 900
Houston, Texas 77057
Attention: Leonard L. Carr, Jr.
(713) 783-8200
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No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by us or any selling shareholder. This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, the securities offered hereby to
any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at any time does not
imply that information contained herein is correct as of any time subsequent to
its date.
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<PAGE>
GENERAL INFORMATION
Tidel Technologies, Inc. (the "Company") was incorporated under the
laws of the State of Delaware in November 1987 under the name of American
Medical Technologies, Inc., succeeding a corporation established in British
Columbia, Canada in May 1984. The Company changed its name to Tidel
Technologies, Inc. in July 1997.
Prior to September 30, 1992, the Company was engaged in the business of
medical waste management services through its majority owned subsidiary, 3CI
Complete Compliance Corporation. On September 30, 1992, the Company acquired all
of the issued and outstanding capital stock of Tidel Engineering, Inc., a
manufacturer of automated teller machines, electronic cash security systems and
underground fuel storage monitoring and leak detection devices. These operations
currently represent the sole business of the Company.
The Company's principal executive offices are located at 5847 San
Felipe, Suite 900, Houston, Texas 77057. The Company's telephone number at such
location is (713) 783-8200.
USE OF PROCEEDS
The Company will receive the price of the shares of Common Stock
offered pursuant to the 1997 Long-Term Incentive Plan and the exercise price of
the options offered pursuant to the 1989 Incentive Stock Option Plan when
exercised by the holders thereof. Such proceeds will be used for working capital
purposes by the Company. The Company will not receive any of the proceeds from
the reoffer and resale of the shares (the "Shares") of Common Stock, $.01 par
value ("Common Stock") by the selling shareholders.
SELLING SHAREHOLDERS
This Prospectus relates to the reoffer and resale of Shares issued or
that may be issued to the Selling Shareholders under the 1989 Incentive Stock
Option Plan or the 1997 Long-Term Incentive Plan.
The following table sets forth (i) the number of shares of Common Stock
beneficially owned by each Selling Shareholder at January 14, 2000, (ii) the
number of Shares to be offered for resale by each selling shareholder (i.e., the
total number of Shares underlying options held by the selling shareholders
irrespective of whether such options are presently exercisable or exercisable
within sixty days of January 14, 2000) and (iii) the
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number and percentage of shares of Common Stock to be held by each Selling
Shareholder after completion of the offering. The table is based upon 16,245,827
shares outstanding as of January 14, 2000.
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<TABLE>
<CAPTION>
Number of shares of
Common Stock/
Number of Percentage of Class to
Number of shares of Shares to be be Owned After
Common Stock Owned at Offered for Completion of the
Name January 14, 2000 Resale Offering
- ---------------------------------------- ------------------------ ----------------- ------------------------
<S> <C> <C> <C>
James T. Rash (1).......................... 855,000(2) 255,000 600,000/3.7%
Mark K. Levenick (3)....................... 625,000(4) 375,000 250,000/1.5%
Michael F. Hudson (5) ................... 243,500(6) 234,000 9,500/*
</TABLE>
* Less than one percent.
(1) Mr. Rash has been Chairman of the Board of Directors and Chief Executive
Officer of the Company since February 1989, Chief Financial Officer since
January 1995, Chief Financial Officer from July 1987 to February 1989 and a
Director of the Company since 1987.
(2) Includes 405,000 shares which could be acquired upon exercise of
outstanding warrants and options at exercise prices of (i) $0.625 per share
as to 50,000 shares, (ii) $1.00 per share as to 50,000 shares (iii) $1.25
per share as to 150,000 shares, (iv) $1.6875 per share as to 80,000 shares
and (v) $1.875 per share as to 75,000 shares.
(3) Mr. Levenick has been Chief Operating Officer of the Company since July
1997, a Director since March 1995, and an executive of the Company's
wholly-owned subsidiary and its predecessors for more than the preceding
five years.
(4) Includes 525,000 shares which could be acquired upon exercise of
outstanding warrants and options at exercise prices of (i) $0.625 per share
as to 50,000 shares, (ii) $0.875 per share as to 25,000 shares, (iii) $1.00
per share as to 50,000 shares, (iv) $1.25 per share as to 170,000 shares,
(v) $1.4375 per share as to 25,000 shares,(vi) $1.75 per share as to 30,000
shares, (vii) $1.875 per share as to 75,000 shares and (viii) $2.50 per
share as to 100,000 shares.
(5) Mr. Hudson has been Executive Vice President of the Company since July 1997
and an executive of the Company's wholly-owned subsidiary since September
1993.
(6) Includes 234,000 shares which could be acquired upon exercise of
outstanding options at prices of (i) $0.875 per share as to 25,000 shares,
(ii) $1.25 per share as to 67,000 shares, (iii) $1.4375 per share as to
25,000 shares, (iv) $1.875 per share as to 50,000 shares and (v) $2.50
shares as to 67,000 shares.
PLAN OF DISTRIBUTION
It is anticipated that all of the Shares will be offered by the selling
shareholders from time to time in the open market, either directly or through
brokers or agents, or in privately negotiated transactions. The selling
shareholders have advised the Company that they are not parties to any
agreement, arrangement or understanding as to such sales.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Shares
offered hereby have been passed upon for the Company by Messrs. Olshan Grundman
Frome Rosenzweig & Wolosky LLP, New York, New York 10022.
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EXPERTS
The consolidated financial statements of Tidel Technologies, Inc. and
subsidiaries as of September 30, 1999 and 1998 and for each of the years in the
three-year period ended September 30, 1999, have been incorporated by reference
in reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act with respect to the
Shares offered hereby. For further information with respect to the Company and
the securi ties offered hereby, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Tidel Technologies, Inc. (the
"Company") with the Securities and Exchange Commission are incorporated herein
by reference:
1. The Company's Annual Report on Form 10-K for the year ended
September 30, 1999.
2. "Description of Capital Stock" relating to the Company's
Common Stock, $.01 par value (the "Common Stock"), included in the Company's
Registration Statement on Form 10 filed November 9, 1988, as amended.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, after
the effective date of this registration statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
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ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 7 of the Company's Certificate of Incorporation and
Article 9 of the Company's By-laws authorize the indemnification of directors,
officers, agents and employees to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware.
Section 145 of the Delaware General Corporation Law provides as follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create
a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses
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(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion or (3) by the
stockholders.
(e) Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation
as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon
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such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer,
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employee, or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and
in a manner he reasonably believed to be in the interest of the
participant and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
The Company maintains a directors and officers insurance and
company reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Company for such loss for which the Company has lawfully
indemnified the directors and officers. The policy contains various exclusions,
none of which relate to the offering hereunder.
See Item 8 below for information regarding the position of the
Commission with respect to the effect of any indemnification for liabilities
arising under the Securities Act of 1933, as amended.
ITEM 6. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 7. EXHIBITS
Exhibit Index
EXHIBIT
4.1 1997 Long-Term Incentive Plan.
4.2 1989 Incentive Stock Option Plan.
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4.3 Form of Agreement under 1997 Long-Term Incentive Plan.
4.4 Form of Agreement under 1989 Incentive Stock Option Plan.
5.1 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP
(included in Exhibit 5.1).
24 Power of Attorney (included on the signature page of this
Registration Statement).
ITEM 8. UNDERTAKINGS
The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration statement
to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
b. That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
c. To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom
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the prospectus is sent or given, the latest annual report, to security holders
that is incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against each such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Houston, State of Texas, on this 11th day of February,
2000.
TIDEL TECHNOLOGIES, INC.
(Registrant)
By: /s/ James T. Rash
-----------------
James T. Rash, President,
Chairman and Chief Executive
Officer (Principal Executive
and Financial Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James T. Rash and Leonard L. Carr, Jr.,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or his substitute may lawfully do or
cause to be done by virtue thereof.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ James T. Rash Director February 11, 2000
- -----------------------------
James T. Rash
/s/ James L. Britton, III Director February 11, 2000
- -----------------------------
James L. Britton, III
/s/ Jerrell G. Clay Director February 11, 2000
- -----------------------------
Jerrell G. Clay
/s/ Mark K. Levenick Director February 11, 2000
- -----------------------------
Mark K. Levenick
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TIDEL TECHNOLOGIES, INC.
1997 LONG-TERM INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL PROVISION RELATING TO PLAN.
GOVERNANCE, COVERAGE AND BENEFITS............................1
1.1 Purpose ..............................................................1
1.2 Definitions ..........................................................1
1.3 Administration........................................................4
1.4 Shares of Common Stock Subject to the Plan ...........................5
1.5 Participation.........................................................6
1.6 Incentive Awards .....................................................6
1.7 Maximum Individual Grants.............................................6
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS..................6
2.1 Grant of Options......................................................6
2.2 Option Terms..........................................................7
2.3 Option Exercises......................................................7
2.4 Stock Appreciation Rights in Tandem with Options......................8
2.5 Supplemental Payment in Exercise of Non-Qualified
Stock Options or Stock Appreciation Rights..........................8
SECTION 3. RESTRICTED STOCK....................................................9
3.1 Award of Restricted Stock.............................................9
3.2 Restrictions.........................................................10
3.3 Restriction Period...................................................10
3.4 Delivery of Shares of Common Stock...................................10
3.5 Supplemental Payment on Vesting of Restricted Stock..................10
SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES...........................10
4.1 Performance Based Awards.............................................11
4.2 Supplemental Payment on Vesting of Performance Units
or Performance Shares..............................................12
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION..........................11
5.1 Plan Conditions......................................................11
5.2 Transferability......................................................12
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5.3 Rights as a Stockholder..............................................13
5.4 Listing and Registration of Shares of Common Stock...................13
5.5 Change in Stock and Adjustments......................................13
5.6 Termination of Employment, Death, Disability and Retirement..........14
5.7 Changes in Control...................................................15
5.8 Amendments to Incentive Awards.......................................17
5.9 Exchange of Incentive Awards.........................................17
5.10 Financing............................................................17
SECTION 6. MISCELLANEOUS
6.1 Effective Date and Grant Period......................................17
6.2 Funding..............................................................17
6.3 Withholding Taxes....................................................17
6.4 Conflicts with Plan..................................................18
6.5 No Guarantee of Tax Consequences.....................................18
6.6 Severability.........................................................18
6.7 Gender, Tense and Headings...........................................18
6.8 Amendment and Termination............................................18
6.9 Section 280G Payments................................................18
6.10 Governing Law........................................................19
6.11 Arbitration..........................................................19
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TIDEL TECHNOLOGIES, INC.
1997 LONG-TERM INCENTIVE PLAN
SECTION 1. GENERAL PROVISIONS RELATING
TO PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 Purpose. The purpose of the Tidel Technologies, Inc. 1997 Long-Term
Incentive Plan (the "Plan") is to foster and promote the long-term financial
success of Tidel Technologies, Inc. (the "Company" or "Tidel") and materially
increase the value of the equity interests in the Company by: (a) encouraging
the long-term commitment of selected key employees (defined in Section 1.2(i)
below) and non-employee members of the Board, (b) motivating superior
performance of key employees and non-employee members of the Board by means of
long-term performance related incentives, (c) encouraging and providing key
employees and non-employee members of the Board with a formal program for
obtaining an ownership interest in the equity interests in the Company, (d)
attracting and retaining outstanding key employees and nonemployee members of
the Board by providing incentive compensation opportunities competitive with
other major companies and (e) enabling participation by key employees and
non-employee members of the Board in the long-term growth and financial success
of the Company. The Plan provides for payment of various forms of incentive
compensation and, accordingly, is not intended to be a plan that is subject to
the Employee Retirement Income Security Act of l974, as amended, and shall be
administered accordingly.
1.2 Definitions. The following terms shall have the meanings set forth
below:
(a) Appreciation. The difference between the option exercise price per
share of the Option to which a Tandem SAR relates and the Fair Market Value of a
share of Common Stock on the date of exercise of the Tandem SAR.
(b) Board. The Board of Directors (or equivalent governing authority)
of the Company.
(c) Change in Control. Any of the events described in and subject to
Section 5.7.
(d) Code. The Internal Revenue Code of 1986, as amended.
(e) Compensation Committee or Committee. The Committee, which shall be
comprised of three or more members who shall be appointed by the Chairman of
Tidel to administer the Plan, which Board shall have the power to fill vacancies
on the Committee arising by resignation, death, removal or otherwise.
(f) Common Stock. Tidel Class A Common Stock, which the Company is
authorized to issue or may in the future be authorized to issue.
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(g) Companv. Tidel Technologies, Inc. formerly known as American
Medical Technologies, Inc. doing business as AMT Industries, Inc. and any
successor corporation.
(h) Disability. Any complete and permanent disability as defined in
Section 22(e)(3) of the Code.
(i) Emplovee. Any common-law employee of the Company or Subsidiary,
who, in the opinion of the Committee, is one of a select group of executive
officers, other officers or other key management personnel of the Company or
Subsidiary who is in a position to contribute materially to the continued growth
and development and to the continued financial success of the Company or
Subsidiary, including executive of ricers and officers who are members of the
Board.
(j) Exchange Act. The Securities Exchange Act of 1934, as amended.
(k) Fair Market Value. The closing sales price of Common Stock as
reported on the NASDAQ National Market System or if the Common Stock is listed
on a national securities exchange, the closing sales price as reported by such
exchange on any relevant date for valuation, or, if there is no such sale on
such date, the applicable prices as so reported on the nearest preceding date
upon which such sale took place. In the event the shares of Common Stock are not
listed on a national securities exchange, the Fair Market Value of such shares
shall be determined by the Committee in its sole discretion.
(1) Grantee. Any employee or non-employee member of the Board who in
the opinion of the Committee performs significant services for the benefit of
the Company and who is granted an Incentive Award under the Plan; provided,
however, a non-employee member of the Board shall only be eligible for a
Non-Qualified Stock Option.
(m) Incentive Award. Any incentive award, individually or collectively,
as the case may be, including any Stock Option, Stock Appreciation Right,
Restricted Stock Award, Performance Unit, or Performance Share, as well as any
Supplemental Payment, granted under the Plan.
(n) Incentive Award Agreement. The written agreement entered into
between the Company and the Grantee pursuant to which an Incentive Award shall
be made under the Plan.
(o) Incentive Stock Option. A stock option which is intended to qualify
as an Incentive Stock Option under Section 422 of the Code and which shall be
granted by the Committee to a Grantee under the Plan.
(p) Non-Oualified Stock Option. A stock option granted by the Committee
to a Grantee under the Plan, which shall not qualify as an Incentive Stock
Option.
(q) Option. A Non-Qualified Stock Option or Incentive Stock Option
granted by the Committee to a Grantee under the Plan.
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(r) Performance Period. A period of time determined by the Committee
over which performance is measured for the purpose of determining a Grantee's
right to and the payment value of any Performance Units or Performance Shares.
(s) Performance Share or Performance Unit. An Incentive Award
representing a contingent right to receive cash or shares of Common Stock (which
may be Restricted Stock) at the end of a Performance Period and which, in the
case of Performance Shares, is denominated in Common Stock, and, in the case of
Performance Units, is denominated in cash values.
(t) Plan. Tidel Technologies, Inc. 1997 Long-Term Incentive Plan, as
hereinafter amended from time to time.
(u) Restricted Stock. Shares of Common Stock issued or transferred to a
Grantee subject to the Restrictions set forth in Section 3.2 hereof.
(v) Restricted Stock Award. An authorization by the Committee to issue
or transfer Restricted Stock to a Grantee.
(w) Restriction Period. The period of time determined by the Committee
as set forth in Section 3.3.
(x) Retirement. The termination of employment by Company or Subsidiary
constituting retirement as determined by the Committee.
(y) Stock Appreciation Right. A Tandem SAR.
(z) Subsidiarv. Any corporation (whether now or hereafter existing)
which constitutes a "subsidiary" of the Company, as defined in Section 424(f) of
the Code.
(aa) Supplemental Payment. Any amounts described in Sections 1.6, 2.5,
3.5 and/or 4.2 dedicated to payment of any federal income taxes that are payable
on an Incentive Award as determined by the Committee.
(bb) Tandem SAR. A Stock Appreciation Right described in Section 2.4.
(cc) Ten-Percent Stockholder. A Ten-Percent Stockholder is a Grantee,
who at the time the Option is granted, owns stock possessing more then ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Subsidiaries.
(dd) Term. The Term of each Incentive Award shall be fixed by the
Committee and shall not be more than ten (10) years from the date of grant. In
the event no Term is fixed, such Term shall be ten (10) years from the date of
grant. The Term shall be five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder.
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(ee) Terminated for Cause. An Employee shall be deemed Terminated for
Cause if he or she is terminated (i) pursuant to the terms of his or her written
employment agreement, in the event of a written employment agreement, or if the
Committee determines that such Employee is being terminated as a result of
misconduct, dishonesty, disloyalty, disobedience or action that might reasonably
injure the Company or any of its Subsidiaries or their business interests or
reputation, or (ii) if the Grantee is not employed pursuant to a written
employment agreement if the Committee determines that such Employee is being
terminated as a result of (A) the willful and continued failure by Grantee to
follow the reasonable instructions of his or her direct supervisor, (B) Employee
is being terminated as a result of misconduct, dishonesty, disloyalty,
disobedience or action that might reasonably injure the Company or any of its
Subsidiaries or their business interests or reputation, (C) the intentional
wrongful disclosure of confidential information of the Company, (D) the
intentional, wrongful engagement in any competitive activity, or (E) gross
neglect of his or her duties to the Company or any of its Subsidiaries.
(ff) Termination for Good Reason. The resignation of an Employee shall
be deemed to be a Termination for "Good Reason" if Employee's resignation is
within two years of a Change in Control as defined in Section 5.7, caused by and
within ninety (90) days of the following: (i) without the express written
consent of Employee, any duties that are assigned which are materially
inconsistent with Employee's position, duties and status with the Company at the
time of the Change in Control; (ii) any action by the Company which results in a
material diminution in the position, duties or status of Employee with the
Company at the time of the Change in Control or any transfer or proposed
transfer of Employee for any extended period to a location outside his principal
place of employment at the time of the Change in Control without his consent,
except for a transfer or proposed transfer for strategic reallocations of the
personnel reporting to Employee; (iii) the base annual salary of Employee, as
the same may hereafter be increased from time to time, is reduced; or (iv)
without limiting the generality or effect of the foregoing, the Company fails to
comply with any of its material obligations hereunder.
(gg) Tidel Common Stock. The common stock of $0.01 par value, per share
of TTI (formerly known as American Medical Technologies, Inc. d/lo/a AMT
Industries, Inc.).
1.3 Administration.
(a) Committee Powers. The Plan shall be administered by the Committee
which shall have full power and authority to: (i) designate Grantees; (ii)
determine the Incentive Awards to be granted to Grantees; (iii) subject to
Section 1.4 of the Plan, determine the Common Stock (or securities convertible
into Common Stock) to be covered by Incentive Awards and in connection
therewith, to reserve shares of Common Stock as needed in order to cover grants
of Incentive Awards; (iv) determine the terms and conditions of any Incentive
Award; (v) determine whether, to what extent, and under what circumstances
Incentive Awards may be settled or exercised in cash, Common Stock, other
securities, or other property, or canceled, substituted, forfeited or suspended,
and the method or methods by which Incentive Awards may be settled, exercised,
canceled, substituted, forfeited or suspended; (vi) interpret and administer the
Plan and any
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instrument or agreement relating to, or Incentive Award made under, the Plan;
(vii) establish, amend, suspend or waive such rules and guidelines as the
Committee shall deem necessary or appropriate for administration of the Plan;
(viii) appoint such agents as it shall deem appropriate for the administration
of the Plan; provided, however, that the Committee shall not delegate any of the
power or authority set forth in (i) through (vii) above; and (ix) make any other
determination and take any other action that it deems necessary or desirable for
such administration. No members of the Committee shall vote or act upon any
matter relating solely to himself. All designations, determinations,
interpretations and other decisions with respect to the Plan or any Incentive
Award shall be within the sole discretion of the Committee and shall be final,
conclusive and binding upon all persons, including the Company or Subsidiary,
any Grantee, any holder or beneficiary of any Incentive Award, any owner of an
equity interest in the Company and any Employee.
(b) No Liability. No member of the Committee shall be liable for any
action or determination made in good faith by the Committee with respect to this
Plan or any Incentive Award under this Plan, and to the fullest extent permitted
by the Company's Bylaws, the Company shall indemnify each member of the
Committee.
(c) Meetings. The Committee shall designate a chairman from among its
members, who shall preside at all of its meetings, and shall designate a
secretary, without regard to whether that person is a member of the Committee,
who shall keep the minutes of the proceedings and all records, documents, and
data pertaining to its administration of the Plan. Meetings shall be held at
such times and places as shall be determined by the Committee. The Committee may
take any action otherwise proper under the Plan by the affirmative vote. taken
with or without a meeting of a majority of its members.
1.4 Shares of Common Stock Subject to the Plan.
(a) Common Stock Authorized. Subject to adjustment under Section 5.5,
the aggregate number of shares of Common Stock available for granting Incentive
Awards under the Plan shall be equal to 1,000,000 shares of Tidel Common Stock.
If any Incentive Award shall expire or terminate for any reason, without being
exercised or paid, shares of Common Stock subject to such Incentive Award shall
again be available for grant in connection with grants of subsequent Incentive
Awards.
(b) Common Stock Available. The Tidel Common Stock available for
issuance or transfer under the Plan shall be made available from such shares
reserved under Tidel Technologies, Inc. 1997 Long-Term Incentive Plan, from such
shares now or hereafter held by the Company or from such shares to be purchased
or acquired by the Company. No fractional shares shall be issued under the Plan;
payment for fractional shares shall be made in cash.
(c) Incentive Award Adjustments. Subject to the limitations set forth
in Sections 5.8 and 6.8, the Committee may make any adjustment in the exercise
price or the number of shares subject to any Incentive Award, or any other terms
of any Incentive Award. Such adjustment
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shall be made by amending, substituting or canceling and re-granting such
Incentive Award with the inclusion of terms and conditions that may differ from
the terms and conditions of the original Incentive Award. If such action is
effected by amendment, the effective date of such amendment shall be the date of
the original grant.
1.5 Participation.
(a) Eligibility. in the Plan is limited to officers and key Employees
and nonemployee members of the Board. The Committee shall from time to time
designate those Employees and non-employee members of the Board, if any, to be
granted Incentive Awards under the Plan, the type of awards granted, the number
of shares, options, rights or units, as the case may be, which shall be granted
to each such Employee and any other terms or conditions relating to the awards
as it may deem appropriate, consistent with the provisions of the Plan. An
Employee and non-employee member of the Board who has been granted an Incentive
Award may, if otherwise eligible, be granted additional Incentive Awards at any
time.
(b) Limited Non-Employee Board Participation. In no event may any
member of the Board who is not a Tidel Employee be granted an Incentive Award
under the Plan, other than a Non-Qualified Stock Option.
1.6 Incentive Awards. The forms of Incentive Awards under this Plan are
Stock Options, Stock Appreciation Rights and Supplemental Payments as described
in Section 2, Restricted Stock Award and Supplemental Payments as described in
Section 3, and Performance Units or Performance Shares and Supplemental Payments
as described in Section 4.
1.7 Maximum Individual Grants. No Grantee may receive dog any fiscal
year of the Company Incentive Awards covering an aggregate of more than one
hundred thousand (100,000) shares of Common Stock. The Chief Executive Officer
will recommend the number of options to be awarded each participant in the plan
subject to the approval of the Compensation Committee.
SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 Grant Of Options. The Committee is authorized to grant
Non-Qualified Stock Options or Incentive Stock Options to Employees and
Non-Qualified Stock Options to nonemployee members of the Board in accordance
with the terms and conditions required pursuant to this Plan and with such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine.
2.2 Option Terms
(a) Exercise Price. The exercise price per share of Common Stock under
each Option shall be determined by the Committee; provided, however, that such
exercise price shall not be less than eighty-five percent (85%) in the case of a
Nonqualified Stock Option or one hundred
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percent (100%) in the case of an Incentive Stock Option of the Fair Market Value
per share of such stock on the date the Option is granted (one hundred ten
percent (110%) in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
(b) Term. The Committee shall fix the Term of each Option which shall
be not more than ten (10) years from the date of grant. In the event no Term is
fixed, such Term shall be ten (10) years from the date of grant. The Term shall
be five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder.
(c) Exercise. The Committee shall determine the time or times at which
an Option may be exercised in whole or in part. The Committee may accelerate the
exercisability of any Option or portion thereof at any time. Notwithstanding the
foregoing, the Committee may, in its sole discretion, provide that all or part
of the Common Stock received by a Grantee upon the exercise of a Non-Qualified
Stock Option shall be Restricted Stock subject to any or all of the restrictions
or conditions set forth in Section 3.2.
2.3 Option Exercises
(a) Method of Exercise. To purchase shares under any Option granted
under the Plan, Grantees must give notice in writing to the Company of their
intention to purchase and specify the number of shares of Tidel Common Stock as
to which they intend to exercise their Option. Upon the date or dates specified
for the completion of the purchase of the shares, the purchase price will be
payable in full. The purchase price may be paid in cash or an equivalent
acceptable to the Committee. At the discretion of the Committee, the exercise
price for Tidel Common Stock may be paid by the assignment and delivery to the
Company of shares of Tidel Common Stock owned by the Grantee or a combination of
cash and such shares equal in value to the exercise price. Any shares so
assigned and delivered to the Company in payment or partial payment of the
purchase price shall be valued at the Fair Market Value on the exercise date. In
addition, at the request of the Grantee and to the extent permitted by
applicable law, the Company in its discretion may selectively approve a
"cashless exercise" arrangement with a brokerage firm under which such brokerage
firm, on behalf of the Grantee, shall pay to the Company the exercise price of
the Options being exercised, and the Company, pursuant to an irrevocable notice
from the Grantee, shall promptly deliver the shares being purchased to such
firm.
(b) In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with Section 422 of the Code and any
rules or regulations promulgated thereunder, including the requirement that the
aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options granted under this Plan and
all other option plans of the Company and Subsidiary become exercisable by a
Grantee during any calendar year shall not exceed One Hundred Thousand Dollars
($100,000). To the extent that the limitation set forth in the preceding
sentence is exceeded for any reason (including the acceleration of the time for
exercise of an
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Option), the Options with respect to such excess amount shall be treated as
Non-Qualified Stock Options.
(c) Proceeds. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to Options exercised under the Plan will be used
for general purposes of the Company.
2.4 Stock Appreciation Rights in Tandem levity Options
(a) General Provisions. The Committee may, at the time of grant of an
Option, grant Stock Appreciation Rights with respect to all or any portion of
the shares of Common Stock covered by such Option. The exercise price per share
of Common Stock of a Tandem SAR shall be fixed in the Incentive Award Agreement
and shall not be less than one hundred percent (100%) of the Fair Market Value
of a share of Common Stock on the date of the grant of the Option to which it
relates. A Tandem SAR may be exercised at any time the Option to which it
relates is then exercisable, but only to the extent the Option to which it
relates is exercisable, and shall be subject to the conditions applicable to
such Option. When a Tandem SAR is exercised, the Option to which it relates
shall terminate to the extent of the number of shares with respect to which the
Tandem SAR is exercised. Similarly, when an Option is exercised, the Tandem SARs
relating to the shares covered by such Option exercise shall terminate. Any
Tandem SAR which is outstanding on the last day of the Term of the related
Option shall be automatically exercised on such date for cash without any action
by the Grantee.
(b) Exercise. Upon exercise of a Tandem SAR, the holder shall receive,
for each share with respect to which the Tandem SAR is exercised, an amount
equal to the Appreciation. The Appreciation shall be payable in cash, Common
Stock, or a combination of both, at the option of the Committee, and shall be
paid within thirty (30) calendar days of the exercise of the Tandem SAR.
2.5 Supplemental Payment on Exercise of Non-Qualified Stock Options or
Stock Appreciation Rights. The Committee, either at the time of grant or at the
time of exercise of any Non-Qualified Stock Option or Stock Appreciation Right,
may provide for a Supplemental Payment by the Company to the Grantee with
respect to the exercise of any Non-Qualified Stock Option or Stock Appreciation
Right. The Supplemental Payment shall be in the amount specified by the
Committee, which shall not exceed the amount necessary to pay the federal income
tax payable with respect to both the exercise of the Non-Qualified Stock Option
and/or Stock Appreciation Right and the receipt of the Supplemental Payment,
assuming the holder is taxed at the maximum effective federal income tax rate
applicable thereto. The Committee shall have the discretion to grant
Supplemental Payments that are payable solely in cash or Supplemental Payments
that are payable in cash, Common Stock, or a combination of both, as determined
by the Committee at the time of payment. The Supplemental Payment, if awarded by
the Committee, shall be paid within thirty (30) calendar days of the date of
exercise of a Non-Qualified Stock Option or Stock Appreciation Right (or, if
later, within 30 calendar days of the
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date on which income is recognized for federal income tax purposes with respect
to such exercise).
SECTION 3. RESTRICTED STOCK
3.1 Award of Restricted Stock
(a) Grant. In consideration of the performance of services by the
Grantee, shares of Restricted Stock may be awarded under this Plan by the
Committee on such terms and conditions and with such restrictions as the
Committee may from time to time approve, all of which may differ with respect to
each Grantee. Such Restricted Stock shall be awarded for no additional
consideration or such additional consideration as the Committee shall determine.
(b) Immediate Transfer Without Immediate Delivery of Restricted Stock.
Each Restricted Stock Award will constitute an immediate transfer of the record
and beneficial ownership of the shares of Restricted Stock to the Grantee in
consideration of the performance of services, entitling such Grantee to all
voting and other ownership rights, but subject to the restrictions hereinafter
referred to. Each Restricted Stock Award may limit the Grantee's dividend rights
during the Restriction Period in which the shares of Restricted Stock are
subject to a substantial risk of forfeiture and restrictions on transfer. Shares
of Common Stock awarded pursuant to a grant of Restricted Stock will be held by
the Company, or in trust or in escrow pursuant to an agreement satisfactory to
the Committee, as determined by the Committee, until such time as the
restrictions on transfer have expired. Any such trust or escrow shall not be
insulated from the claims of the general creditors of the Company in the event
of bankruptcy or insolvency of the Company.
3.2 Restrictions
(a) Restrictive Conditions. Restricted Stock awarded to a Grantee shall
be subject to the following restrictions until the expiration of the Restriction
Period: (i) the shares of Common Stock of the Company included in the Restricted
Stock Award shall be subject to one or more restrictions, including without
limitation, a restriction that constitutes a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code and regulations promulgated
thereunder, and to the restrictions on transferability set forth in Section 5.2;
(ii) unless otherwise approved by the Committee, the shares of Common Stock
included in the Restricted Stock Award that are subject to restrictions which
are not satisfied at such time as the Grantee ceases to be employed by the
Company shall be forfeited and all rights of the Grantee to such shares shall
terminate without further obligation on the part of the Company when the Grantee
leaves the employ of the Company; and (iii) any other restrictions that the
Committee may determine in advance are necessary or appropriate.
(b) Forfeiture of Restricted Stock. If for any reason, the restrictions
imposed by the Committee upon Restricted Stock are not satisfied at the end of
the Restriction Period, any
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Restricted Stock remaining subject to such restrictions shall thereupon be
forfeited by the Grantee and re-acquired by the Company.
(c) Removal of Restrictions. The Committee shall have the authority to
remove any or all of the restrictions on the Restricted Stock, including the
restrictions under the Restriction Period, whenever it may determine that, by
reason of changes in applicable laws or other changes in circumstances arising
after the date of the Restricted Stock Award, such action is appropriate.
3.3 Restriction Period. The Restriction Period or Term of Restricted
Stock shall commence on the date of grant and shall be determined in the sole
discretion of the Committee and described in the Incentive Award Agreement
setting forth the terms of the award of Restricted Stock.
3.4 Delivery of Shares of Common Stock. Subject to Section 6.3, at the
expiration of the Restriction Period, a stock certificate evidencing the
Restricted Stock (to the nearest full share) with respect to which the
Restriction Period has expired with all restrictions thereon having been
satisfied shall be delivered without charge to the Grantee, or his personal
representative, free of all restrictions under the Plan.
3.5 Supplemental Payment on Vesting of Restricted Stock. The Committee,
either at the time of grant or at the time of vesting of Restricted Stock, may
provide for a Supplemental Payment by the Company to the holder in an amount
specified by the Committee which shall not exceed the amount necessary to pay
the federal income tax payable with respect to both the vesting of the
Restricted Stock and receipt of the Supplemental Payment, assuming the Grantee
is taxed at the maximum effective federal income tax rate applicable thereto.
The Supplemental Payment, if awarded by the Committee, shall be paid within 30
calendar days of each date that Restricted Stock vests. The Committee shall have
the discretion to grant Supplemental Payments that are payable solely in cash or
Supplemental Payments that are payable in cash, Common Stock, or a combination
of both, as determined by the Committee at the time of payment.
SECTION 4. PERFORMANCE UNITS AND PERFORMANCE SHARES
4.1 Performance Based Awards
(a) Grant. The Committee is authorized to grant Performance Units and
Performance Shares to Grantees. The Committee may make grants of Performance
Units or Performance Shares in such a manner that more than one Performance
Period is in progress concurrently. For each Performance Period, the Committee
shall establish the number of Performance Units or Performance Shares and the
contingent value of any Performance Units or Performance Shares, which may vary
depending on the degree to which performance objectives established by the
Committee are met.
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(b) Performance Criteria. At the beginning of each Performance Period,
the Committee shall (i) establish for such Performance Period specific financial
or nonfinancial performance objectives as the Committee believes are relevant to
the Company's overall business objectives; (ii) determine the value of a
Performance Unit or the number of shares under a Performance Share grant
relative to performance objectives; and (iii) notify each Grantee in writing of
the established performance objectives and minimum, target, and maximum
Performance Unit or Share value for such Performance Period.
(c) Modification. If the Committee determines in its sole discretion
that the established performance measures or objectives are no longer suitable
to Company objectives because of a change in the Company's business operations,
corporate structure, capital structure, or other conditions the Committee deems
to be appropriate, the Committee may modify the performance measures and
objectives as considered appropriate.
(d) Payment. The basis for payment of Performance Units or Performance
Shares for a given Performance Period shall be the achievement of those
financial and nonfinancial performance objectives determined by the Committee at
the beginning of the Performance Period. If minimum performance is not achieved
for a Performance Period, no payment shall be made and all contingent rights
shall cease. If minimum performance is achieved or exceeded, the value of a
Performance Unit or Performance Share shall be based on the degree to which
actual performance exceeded the pre-established minimum performance standards,
as determined by the Committee and as set forth in the Incentive Award
Agreement. Payments shall be made, in the discretion of the Committee, solely in
cash or Common Stock, or a combination of cash and Common Stock, following the
close of the applicable Performance Period.
4.2 Supplemental Payment on Vesting of Performance Units or Performance
Shares. The Committee, either at the time of grant or at the time of vesting of
Performance Units or Performance Shares (other than Restricted Stock), may
provide for a Supplemental Payment by the Company to the holder in an amount
specified by the Committee which shall not exceed the amount necessary to pay
the federal income tax payable with respect to both the vesting of such
Performance Units or Performance Shares and receipt of the Supplemental Payment,
assuming the Grantee is taxed at the maximum effective federal income tax rate
applicable thereto. The Supplemental Payment, if awarded by the Committee, shall
be paid within thirty (30) days of each date that such Performance Units or
Performance Shares vest. The Committee shall have the discretion to grant
Supplemental Payments that are payable in cash, Common Stock, or a combination
of both, as determined by the Committee at the time of payment.
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION
5.1 Plan Conditions
(a) Incentive Award Agreement. Each Grantee to whom an Incentive Award
is granted under the Plan shall be required to enter into an Incentive Award
Agreement with the
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Company in a form provided by the Committee, which shall contain certain
specific terms, as determined by the Committee, with respect to the Incentive
Award and shall include, without limitation, provisions that the Grantee (i)
shall not disclose any trade or secret data or any other confidential
information of the Company acquired during employment by the Company or a
Subsidiary, or after the termination of employment or Retirement, (ii) shall
abide by all the terms and conditions of the Plan and such other terms and
conditions as may be imposed by the Committee, and (iii) shall not interfere
with the employment of any other Company employee. An Incentive Award may
include a noncompetition agreement with respect to the Grantee andlor such other
terms and conditions, including, without limitation, rights of repurchase or
first refusal, not inconsistent with the Plan, as shall be determined from time
to time by the Committee.
(b) No Right to Employment. Nothing in the Plan's Incentive Award
Agreement or any instrument executed pursuant to the Plan shall create any
employment rights (including without limitation, rights to continued employment)
in any Grantee or affect the right of the Company to terminate the employment of
any Grantee at any time for any reason whether before the exercise date of any
Option or Tandem SAR or during the Restriction Period of any Restricted Stock or
during the Performance Period of any Performance Unit or Performance Share.
(c) Securities Requirements. No shares of Common Stock will be issued
or transferred pursuant to an Incentive Award unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction
and by any stock market or exchange upon which the Common Stock may be listed,
have been fully met. As a condition precedent to the issuance of shares pursuant
to the grant or exercise of an Incentive Award, the Company may require the
Grantee to take any reasonable action to meet such securities related
requirements. The Company shall not be obligated to take any affirmative action
in order to cause the issuance or transfer of shares pursuant to an Incentive
Award to comply with any law or regulation described in the second preceding
sentence.
5.2 Transferability
(a) Non-Transferable Award. No Incentive Award and no right under the
Plan, contingent or otherwise, other than (i) Restricted Stock as to which
restrictions have lapsed, or (ii) a Non- Qualified Stoclc Option for which the
Incentive Award Agreement specifically provides to the contrary, will be (i)
assignable, saleable, or otherwise transferable by a Grantee except by will or
by the laws of descent and distribution, or (ii) subject to any encumbrance,
pledge or charge of any nature. No transfer by will or by the laws or descent
and distribution shall be effective to bind the Company unless the Committee
shall have been furnished with a copy of the deceased Grantee's will or such
other evidence as the Committee may deem necessary to establish the validity of
the transfer. Any attempted transfer in violation of this Section 5.2 shall be
void and ineffective for all purposes.
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(b) Ability to Exercise Rights. Except as specifically provided in
Section 5.2(a) with respect to certain Restricted Stock and Non-Qualified Stock
Options, only the Grantee or his guardian (if the Grantee becomes Disabled), or
in the event of his death, his legal representative or beneficiary, may exercise
Options, Tandem SARs, receive cash payments and deliveries of shares, or
otherwise exercise rights under the Plan. The executor or administrator of the
Grantee's estate, or the person or persons to whom the Grantee's rights under
any Incentive Award will pass by will or the laws of the descent and
distribution, shall be deemed to be the Grantee's beneficiary or beneficiaries
of the rights of the Grantee hereunder and shall be entitled to exercise such
rights as are provided hereunder. The Company may act in reliance upon a Court
Order admitting an instrument to probate as the Grantee's last Will or an Order
finding that the Grantee died intestate. Unless within six (6) months after the
Grantee's death the Company has actual notice of the existence of proceedings to
probate a Will of the Grantee, the Company may assume that the Grantee died
intestate. The foregoing provisions are intended to expedite the prompt and
efficient administration of the Plan and to protect the Company from any action
taken in accordance with these provisions.
5.3 Rights as a Stockholder. Except as otherwise provided in any
Incentive Award Agreement, a Grantee of an Incentive Award or a transferee of
such Grantee shall have no rights as a stockholder with respect to any shares of
Common Stock until such person becomes a holder of record of such Common Stock.
Except as otherwise provided in Section 5.5, no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities, other
property), or distributions or other rights for which the record date is prior
to the date such stock certificate is issued.
5.4 Listing and Registration of Shares of Common Stock. Prior to
issuance and/or delivery of shares of Tidel Common Stock, the Grantee shall
consult with representatives of the Company as appropriate, regarding compliance
with laws, rules and regulations that apply to such shares. If the Company
determines that such action is desirable, the Company shall postpone the
issuance and/or delivery of the affected shares of Common Stock upon any
exercise of an Incentive Award until completion of such stock exchange listing,
registration, or other qualification of such shares under any state and/or
federal law, rule or regulation as the Company may consider appropriate, and may
require any Grantee to make such representations and furnish such information as
it may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations. The Company
shall not be obligated to take any affirmative action in order to cause the
issuance or transfer of shares pursuant to an Incentive Award to comply with any
law, rule or regulation described in the immediately preceding sentence.
5.5 Change in Stock and Adjustments.
(a) Changes in Capitalization. Subject to Section 5.5(b), in the event
the outstanding shares of the Common Stock, as constituted from time to time,
shall be changed as a result of a change in capitalization of Tidel or a
combination, merger, or reorganization of Tidel into or with any other
corporation or any other transaction with similar effects, then, for all
purposes,
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references herein to Cormmon Stock or Restricted Stock shall mean and include
all securities or other property (other than cash) that holders of Common Stock
are entitled to receive in respect of Common Stock by reason of each successive
aforementioned event, which securities or other property (other than cash) shall
be treated in the same manner and shall be subject to the same restrictions as
the underlying Common Stock or Restricted Stock.
(b) Changes in Law or Circumstances. In the event of any change in
applicable laws or any change in circumstances which results in or would result
in any dilution of the rights granted under the Plan, or which otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan, then if the Cormmittee shall, in its sole discretion, determine
that such change equitably requires an adjustment in the number or kind of
shares of stock or other securities or property theretofore subject, or which
may become subject, to issuance or transfer under the Plan or in the terms and
conditions of outstanding Incentive Awards, such adjustment shall be made in
accordance with such determination. Such adjustments may include without
limitation changes with respect to (i) the aggregate number of shares that may
be issued under the Plan, (ii) the number of shares subject to Incentive Awards
and (iii) the price per share for outstanding Incentive Awards. The Committee
shall give notice to each Grantee, and upon notice such adjustment shall be
effective and binding for all purposes of the Plan.
5.6 Termination of Employment, Death, Disability and Retirement.
(a) Termination of Emplovment. Subject to Section 3.2, if an Employee's
employment by the Company and Subsidiary is Terminated for Cause or voluntarily
terminates, such Employee's right to exercise the vested portion of his or her
Incentive Award shall terminate as of the date of termination of employment. In
the event of termination for death, termination without cause, Disability,
Retirement, or Termination for Good Reason, an Incentive Award may only be
exercised as determined in the sole discretion of the Committee and provided in
the Incentive Award Agreement. However, the following may be used as a general
guideline.
(b) Retirement. Subject to Section 3.2, unless otherwise approved by
the Committee, upon the Retirement of an Employee:
(i) any nonvested portion of any outstanding Incentive Award may
continue to vest after Retirement; and
(ii) any vested Incentive Award shall expire on the earlier of
(A) the expiration date set forth in the Incentive Award Agreement
with respect to such Incentive Awards; (B) the expiration of six (6)
months after the date of Retirement, three (3) months in the case of
an Incentive Stock Option; or (C) when Incentive Award vests under (i)
above.
(c) Disability or Death. Subject to Section 3.2, unless otherwise
approved by the Committee, upon termination of employment from the Company and
any Subsidiary as a result of Disability or Death:
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(i) any nonvested portion of any outstanding Incentive Award may
continue to vest after Disability or Death; and
(ii) any vested Incentive Award shall expire upon the earlier of (A)
the expiration date set forth in the Incentive Award Agreement with respect to
such Incentive Awards or (B) the first anniversary of such termination of such
employment as a result of Disability or Death or six (6) months after Incentive
Award vests under (i) above.
(d) Continuation. Subject to the express provisions of the Plan and the
terms of any applicable Incentive Award Agreement, the Committee, in its
discretion, may provide for the continuation of any Incentive Award for such
period and upon such terms and conditions as are determined by the Committee in
the event that a Grantee ceases to be an employee.
5.7 Changes in Control
(a) Changes in Control. In the event of Termination for Good Reason
within two years of a Change in Control:
(i) all Options and Stock Appreciation Rights then outstanding
shall become vested and immediately and fully exercisable,
notwithstanding any provision therein for the exercise in installments;
(ii) all restrictions and conditions of all Restricted Stock
then outstanding shall be deemed satisfied, and the Restriction Period
with respect thereto shall be deemed to have expired, as of the date of
the Change in Control; and
(iii) all Performance Shares and Performance Units shall
become vested, deemed earned in full and promptly paid to the Grantees
without regard to payment schedules and notwithstanding that the
applicable performance cycle or retention cycle shall not have been
completed.
For the purpose of this Section 5.7, a "Change in Control" shall be
deemed to have occurred at such time as:
(i) any "person" (as that term is used in Section 13(d) and
14(d)(2) of the Exchange Act) (other than a qualified benefit or
retirement plan of Tidel or its Subsidiaries) becomes, directly or
indirectly, the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act as in effect on the date hereof) of securities
representing a fifty percent (50%) or more of the combined voting power
of the then outstanding voting securities of the Company or any
successor of the Company (unless such person is already such a
beneficial owner on the date of the grant of an Incentive Award);
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(ii) during any period of two (2) consecutive years or less,
individuals who at the beginning of such period constituted the Board
of the Company cease, for any reason, to constitute at least a majority
of the Board, unless the election or nomination for election of each
new member of the Board was approved by a vote of at least two-thirds
of the members of the Board then still in office who were members of
the Board at the beginning of the period;
(iii) the equityholders of the Company approve any merger or
consolidation to which the Company is a party as a result of which the
persons who were equityholders of the Company immediately prior to the
effective date of the merger or consolidation (and excluding, however,
any shares held by any party to such merger or consolidation and their
affiliates) shall have beneficial ownership of less than fifty percent
(50%) of the combined voting power for election of members of the Board
(or equivalent) of the surviving entity following the effective date of
such merger or consolidation; or
(iv) the equityholders of the Company approve any merger or
consolidation as a result of which the equity interests in the Company
shall be changed, converted or exchanged (other than a merger with a
wholly-owned subsidiary of the Company) or any liquidation of the
Company or any sale or other disposition of fifty percent (50%) or more
of the assets or earnings power of the Company;
provided, however, that no Change in Control shall be deemed to have occurred
if, prior to such time as a Change in Control would otherwise be deemed to have
occurred, the Board determines otherwise, or as otherwise set forth in the
Incentive Award Agreement.
(b) Right of Cash-Out. If approved by the Board prior to or within
thirty (30) days after such time as a Change in Control shall be deemed to have
occurred, the Board shall have the right for a forty-five (45) day period
immediately following the date that the Change in Control is deemed to have
occurred to require all, but not less than all, Grantees to transfer and deliver
to the Company all Incentive Awards previously granted to Grantees in exchange
for an amount equal to the "cash value" (defined below) of the Incentive Awards.
Such right shall be exercised by written notice to all Grantees. For purposes of
this Section 5.7(b), the cash value of an Incentive Award shall equal the sum of
(i) all cash to which the Grantee would be entitled upon settlement or exercise
of such Incentive Award and (ii) the excess of the "market value" (defined
below) (A) per share over the Option exercise price, if any, multiplied by the
number of shares subject to such Incentive Award, (B) of each share of
Restricted Stock awarded under the Incentive Award, (C) each Performance Unit
and/or Performance Shares awarded under the Incentive Award. Notwithstanding
anything herein to the contrary and solely for purposes of the preceding
sentence, "market value" per share shall mean the higher of (i) the average of
the Fair Market Value per share on each of the five trading days immediately
following the date a Change in Control is deemed to have occurred or (ii) the
highest price, if any, offered in connection with the Change in Control.
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(c) The amount payable to each Grantee by the Company pursuant to this
Section 5.7 shall be in cash or by certified check and shall be reduced by any
taxes required to be withheld.
5.8 Amendments to Incentive Awards. to Sections 5.5 and 5.7, the
Committee may waive any conditions or rights with respect to, or amend, alter,
suspend, discontinue, or terminate, any unexercised Incentive Award theretofore
granted, prospectively or retroactively, with the consent of any relevant
Grantee.
5.9 Exchange of Incentive Awards. The Committee may, in its discretion,
permit Grantees under the Plan to surrender outstanding Incentive Awards in
order to exercise or realize the rights under other Incentive Awards, or in
exchange for the grant of new Incentive Awards or require holders of Incentive
Awards to surrender outstanding Incentive Awards as a condition precedent to the
grant of new Incentive Awards.
5.10 Financing. The Company may extend and maintain, or arrange for the
extension and maintenance of, financing to any Grantee (including a Grantee who
is a director of the Company) to purchase shares pursuant to exercise of an
Incentive Award on such terms as may be approved by the Committee in its sole
discretion. In considering the terms for extension or maintenance of credit by
the Company, the Committee shall, among other factors, consider the cost to the
Company of any financing extended by the Company.
SECTION 6. MISCELLANEOUS
6.1 Effective Date and Grant Period. This Plan shall become effective
as of the date of Board approval (the "Effective Date"). Unless sooner
terminated by the Board, the Plan shall terminate on July 15, 2007. After the
termination of the Plan, no Incentive Awards may be granted under the Plan, but
previously granted awards shall remain outstanding in accordance with their
applicable terms and conditions.
6.2 Funding. Except as provided under Section 3, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets in a
manner that would provide any Grantee any rights that are greater than those of
a general creditor of the Company, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund if such action would provide any
Grantee with any rights that are greater than those of a general creditor of the
Company. Grantees shall have no rights under the Plan other than as unsecured
general creditors of the Company except that insofar as they may have come
entitled to payment of additional compensation by performance of services, they
shall have the same rights as other employees under applicable law.
6.3 Withholding Taxes. The Company shall have the right to (i) make
deductions from any settlement of an Incentive Award made under the Plan,
including the delivery of shares, or
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require shares or cash or both be withheld from any Incentive Award, in each
case in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (ii) take such other action as may be necessary
or appropriate to satisfy any such withholding obligations. The Committee may
determine the manner in which such tax withholding may be satisfied, may permit
shares of Common Stock (rounded up to the next whole number) to be used to
satisfy required tax withholding based on the Fair Market Value of any such
shares of Common Stock, as of the delivery of shares or payment of cash in
satisfaction of the applicable Incentive Award.
6.4 Conflicts with Plan. In the event of any inconsistency or conflict
between the terms of the Plan and an Incentive Award Agreement, the terms of the
Plan shall govern.
6.5 No Guarantee of Tax Consequences. Neither the Company nor the
Committee makes any commitment or guarantee that any federal, state or local tax
treatment will apply or be available to any person participating or eligible to
participate hereunder.
6.6 Severability; Headings. If any portion of this Plan is held invalid
or inoperative, the other portions of this Plan shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The Section
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Plan or of
any part hereof.
6.7 Gender, Tense and Headings. Whenever the context requires such,
words of the masculine gender used herein shall include the feminine and neuter,
and words used in the singular shall include the plural. Section headings as
used herein are inserted solely for convenience and reference and constitute no
part of the Plan.
6.8 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board by the affirmative vote of a majority of the members in
office. Except as provided in Section 5.5 and 5.7, the Plan, however, shall not
be amended, without prior written consent of each affected Grantee if such
amendment or termination of the Plan would adversely affect vested benefits or
rights of such person.
6.9 Section 280G Payments. In the event that the aggregate present
value of the payments to a Grantee under the Plan, and any other plan, program,
or arrangement maintained by the Company constitutes an "excess parachute
payment" (within the meaning of Section 280G(b)(l) of the Code) and the excise
tax on such payment would cause the net parachute payments (after taking into
account federal, state and local income and excise taxes) to which the Grantee
otherwise would be entitled to be less than what the Grantee would have netted
(after taking into account federal, state and local income taxes) had the
present value of his total parachute payments equaled $1.00 less than three
times his "base amount" (within the meaning of Code Section 280G(b)(3)(A)), the
Grantee's total "parachute payments" (within the meaning of Code Section
280G(b)(3)(A)) shall be reduced (by the minimum possible amount) so that their
aggregate present value equals $1.00 less than three times such base amount. For
purposes of this calculation, it shall be assumed that the Grantee's tax
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rate will be the maximum marginal federal, state and local income tax rate on
earned income, with such maximum federal rate to be computed with regard to Code
Section l(g), if applicable. In the event that the Grantee and the Company are
unable to agree as to the amount of the reduction described above, if any, the
Grantee and the Company shall submit such dispute to arbitration in accordance
with Section 6.11 and the arbitration proceeding shall determine the amount of
such reduction and such determination shall be final and binding upon the
Grantee and the Company.
6.10 Governing Law and Venue. The Plan shall be construed in accordance
with the laws of the State of Texas without giving effect to any principle of
conflict of laws that would require the application of any other jurisdiction,
except as superseded by federal law, and in accordance with applicable
provisions of the Code and regulations or other authority issued thereunder by
the appropriate governmental authority. Venue for any dispute shall lie
exclusively in Dallas, Dallas County, Texas.
6.11 Arbitration. Any unresolved dispute or controversy arising under
or in connection with this Plan shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in Dallas, Texas, in
accordance with the rules of the American Arbitration Association then in
effect. The arbitrators shall not have the authority to add to, detract from, or
modify any provision hereof nor to award punitive damages to any injured party.
A decision by a majority of the arbitration panel shall be final, non-appealable
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the Company.
Each party shall bear his or its own costs of arbitration, but if
Grantee is the prevailing party in such arbitration, he shall be entitled to
recover from Company as part of any award entered his reasonable expenses for
attorneys' fees and disbursements.
IN WITNESS WHEREOF, this Plan has been executed to be effective as of
July 15, 1997.
TIDEL TECHNOLOGIES, INC.
By: /s/ James T. Rash
-----------------
Printed Name: James T. Rash
-------------
Title: Chairman and CEO
----------------
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AMERICAN MEDICAL TECHNOLOGIES, INC.'S
1989 INCENTIVE STOCK OPTION PLAN
-------------------------------------
1. PURPOSE. This Incentive Stock Option Plan (the "Plan") is
intended to advance the interests of AMERICAN MEDICAL TECHNOLOGIES, INC., a
Delaware corporation the "Corporation") and its shareholders, by encouraging
and enabling the employees of the Corporation to acquire or increase a
proprietary interest in the Corporation by ownership of its stock and thereby
provide an additional incentive and benefit for them to work on behalf of the
Corporation.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Corporation.
(b) "Committee" means the committee appointed by the Board,
which shall consist of one or more persons.
(c) "Common Stock" means the Corporation's Common Stock, $.01
par value.
(d) "Internal Revenue Code" means the Internal Revenue as
amended Code of 1986, as amended.
(e) "Option" means an option granted under the Plan.
(f) "Optionee" means a person owning a valid and effective
option, granted under the Plan.
(g) "Successor" means the legal representative of the estate
of a deceased Optionee or the person or persons who acquire the right to
exercise an Option by bequest or inheritance or by reason of the death of any
Optionee.
3. ADMINISTRATION OF PLAN. The Plan shall be administered by the
Committee in accordance with applicable laws and regulations of governmental
agencies. No member of the Committee shall have been eligible to receive grants
under the Plan for a period of one year prior to becoming a member of the
Committee. Furthermore, no member of the Committee shall, at any time while a
member of the Committee, be eligible to participate in the Plan. The Committee
shall have full authority in its discretion, subject to the provisions of the
Plan, to determine the individuals to whom and the time or times at which,
Options shall be granted; and the number of shares of Common Stock covered by
each Option; to construe and interpret the Plan; to determine the terms and
provisions of the respective option agreements, which need not be identical,
including, but without limitation, terms covering the payment of the Option
price; and to make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan. All
determinations of the Committee shall be by a majority of its members. All such
actions and determinations shall be conclusively binding for all purposes and
upon all persons.
<PAGE>
4. COMMON STOCK SUBJECT TO OPTIONS. The aggregate number of shares of
the Corporation's Common Stock which may be issued upon the exercise of Options
granted under the Plan shall not exceed 500,000, subject to adjustment under the
provisions of Paragraph 7. The shares of Common Stock to be issued upon the
exercise of Options may be authorized but unissued shares or shares issued and
reacquired by the Corporation. In the event any Option shall, for any reason,
terminate or expire or be surrendered without having been exercised in full, the
shares subject to such Option but not purchased thereunder shall again be
available for other Options that may be granted under the Plan.
5. PARTICIPANTS. To be eligible to participate in the Plan, an
individual shall on the date of the granting of the Option be a regular salaried
employee including officers and employees who are also directors of the
Corporation or a subsidiary corporation (within the meaning of Section 425(f) of
the Internal Revenue Code) and shall be designated as a participant by the
Committee.
6. OPTION AGREEMENTS. Any Option granted under this Plan shall be
evidenced either by an agreement ("Option Agreement"), which shall be approved
as to form and substance by the Board or by a Board resolution specifying the
limitations and conditions of such Option. Each Option Agreement shall be
executed by an officer of the Corporation and the applicable Optionee. Each
Option Agreement shall specify the number of shares of Common Stock subject to
the Option, which number shall be determined in the sole discretion of the
Committee. All Options and Option Agreements granted under the provisions of the
Plan shall be subject to the following limitations and conditions:
(a) OPTION PRICE. The Option price per share with respect to
each Option shall be determined by the Board, but shall not be less than 100
percent of the fair market value of a share of Common Stock on the date of grant
of the Option. For purposes of this Plan, fair market value shall be as
determined by the Committee, and such determination shall be binding upon the
Corporation and the Optionee.
(b) PERIOD OF OPTION. The expiration date of each Option shall
be fixed by the Committee; however, such expiration date shall not be more than
ten (10) years from the date of grant of the Option.
(c) VESTING OF SHAREHOLDER RIGHTS. No Optionee or his
Successor shall have any of the rights of a shareholder of the Corporation until
the exercise procedure for an Option is fully completed under the applicable
Option Agreement and the certificates evidencing the shares purchased are
properly delivered to such Optionee or his successor in accordance with the
terms of the Plan and the Agreement.
(d) EXERCISE OF OPTION. The Option shall be exercised in
accordance with the terms specified in the Option Agreement and with the
provisions set forth below. No Option will be exercisable until the last day of
the month following the month during which it was granted. On such last day, an
Option shall become exercisable as to l/36th of the shares to which it relates,
and as to
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an additional l/36th of the shares on the last day of each succeeding month, so
that the Option becomes vested at the rate of 1/36th per month and thus becomes
fully vested and exercisable in full (except to the extent previously exercised)
on the last day of the 36th month after the month in which it was granted;
provided that in the event that a fractional share results when applying this
calculation, the vested portion shall be determined by rounding off to the next
lowest whole share. The purchase price per share of Common Stock deliverable
upon the exercise of an Option may be either paid in cash, in whole shares of
American Medical Technologies, Inc. common stock based on the fair market value
of such shares on the date of exercise, or in a combination thereof, as
determined by the Committee. Notwithstanding the preceding provisions of this
Paragraph 6(d), in the event of (i) the merger or consolidation of the
Corporation into another corporation, (ii) the sale or exchange of all or
substantially all of the assets of the Corporation for cash or other
consideration or the securities of another corporation, (iii) the acquisition of
shares by any person or group, which results in the holding by such person or
group of 35 percent or more of the Corporation's then outstanding voting stock,
or (iv) the liquidation or dissolution of the Corporation, the Option shall
become exercisable as to all shares covered thereby, notwithstanding that the
Option may not yet have become fully exercisable as provided above. For purposes
of the preceding sentence the term "group" shall mean persons acting as a group
within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended and the rules and regulations thereunder.
(e) Nontransferability of Option and Shares. No Option shall
be transferable or assignable by an Optionee, otherwise than by will or the laws
of descent and distribution and each Option shall be exercisable, during the
Optionee's lifetime, only by him. No Option shall be pledged or hypothecated in
any way and no Option shall be subject to execution, attachment, or similar
process except with the express consent of the Committee. In addition to the
foregoing, the Committee may impose restrictions on transfer of the shares
received upon exercise of an Option as it deems necessary. The Corporation shall
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of the Option or part thereof prior to
fulfillment of all of the following conditions:
(i) The listing of such shares on all stock
exchanges, if any, on which such class of stock is then listed;
(ii) The completion of any registration or other
qualification of such shares under any state or federal law or the imposition of
restrictions on transfer under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the
Board shall, in its absolute discretion, deem necessary or advisable;
(iii) The obtaining of any approval or other
clearance from any state or federal governmental agency which the Board shall,
in its absolute discretion, determine to be necessary or advisable; and
(iv) The lapse of such reasonable period of time
following the exercise of the Option as the Board may from time to time
establish for reasons of administrative convenience.
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<PAGE>
(f) Termination of Employment. Upon termination for any reason
of an Optionee's employment with the Corporation, his Option privileges shall be
limited to the shares which were immediately purchasable by him at the date of
such termination and such Option privileges shall expire unless exercised by him
within three (3) months after the date of such termination. The granting of an
Option to the Optionee does not alter in any way the Corporation's existing
rights to terminate the Optionee's employment at any time and for any reason,
nor does it confer upon the Optionee any rights or privileges except as
specifically provided for in the Plan.
(g) Death of Optionee. If an Optionee dies while in the employ
of the Corporation, his Option privileges shall be limited to the shares which
were immediately purchasable by him at the date of death and such Option
privileges shall expire unless exercised by his Successor within one (1) year
after the date of death.
(h) Repurchase of Option. Upon the approval of the Committee,
the Corporation is authorized to repurchase a previously granted Option from an
Optionee by mutual agreement with such Optionee before such Option has been
exercised, by payment to the Optionee of the amount by which the fair market
value of the shares under such Option at the time of such repurchase exceeds the
fair market value of the shares at the time the Option was granted The
provisions of the preceding sentence shall apply to the full number of shares
subject to the Option irrespective of the extent the Option may have become
vested or exercisable under the provisions of Paragraph 6(d) of this Plan.
(i) Additional Terms and Conditions. The Option Agreement may
contain such other terms, provisions and conditions which are consistent with
the Plan and applicable provisions of the Internal Revenue Code as may be
determined by the Committee or the Board.
7. ADJUSTMENTS.
(a) In the event that the outstanding shares of Common Stock
of the Corporation are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Corporation or of any corporation by reason of a recapitalization,
reclassification, stock split-up, combination of shares, or stock dividend or
other distribution payable in capital stock, appropriate adjustment shall be
made by the Board in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Board shall make
appropriate adjustment in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised shall be exercisable, to the end
that the proportionate interest of the holder of the Option shall, to the extent
practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding Options shall be made with respect to the unexercised
portion of the Option by a corresponding adjustment in the Option price per
share, but without any change in the total price.
(b) In the event of the dissolution or liquidation of the
Corporation, any Option granted under the Plan shall terminate as of a date to
be fixed by the Board, provided that no less
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<PAGE>
than thirty (30) days' written notice of the date so fixed shall be given to
each Optionee and each such Optionee shall have the right during such period to
exercise his Option as to all or any part of the shares covered thereby.
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<PAGE>
(c) In the event of a Reorganization (as hereinafter defined)
in which the Corporation is or becomes a wholly owned subsidiary of another
company after the effective date of the Reorganization, then
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the Reorganization Agreement
does not specifically provide for the change, conversion or exchange of the
shares under outstanding and unexercised stock options for securities of another
corporation, unless the Board shall take action providing otherwise, the Plan
and any previously granted outstanding Options shall terminate. In the event of
termination of an Option as provided in the preceding sentence, the Corporation
shall give 60 days' advance written notice to each Optionee of the termination
of such Optionee's Option or Options and of the Optionee's right to exercise any
such outstanding Options (to the extent provided in Paragraph 6(d) of the Plan)
within the following 60 days, at the end of which, such Options shall terminate;
or
(ii) If there is a Reorganization Agreement and if
the Reorganization Agreement specifically provides for the change, conversion,
or exchange of the shares under outstanding and unexercised stock options for
securities of another corporation, then the Board shall adjust the shares under
such outstanding and unexercised stock options (and shall adjust the shares
remaining under the Plan which are then available to be optioned under the Plan,
if the Reorganization Agreement makes specific provisions therefor) in a manner
not inconsistent with the provisions of the Reorganization Agreement for the
adjustment, change, conversion, or exchange of such stock and such Options.
The term "Reorganization" as used in this Subparagraph (c) hereof shall
mean any statutory merger; statutory consolidation; sale of all or substantially
all of the assets of the Corporation; or sale, pursuant to an agreement with the
Corporation, of securities of the Corporation pursuant to which the Corporation
is or becomes a wholly owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Paragraph (7)
shall be reasonably made by the Board, whose decisions as to what adjustments or
determinations shall be made and the extent thereof, shall be final, binding,
and conclusive.
8. CERTAIN PROVISIONS REGARDING ISSUANCE OF SHARES.
(a) No Registration of Shares. In the event that the shares to
be issued upon exercise of the Options have not been registered under the
Securities Act of 1933, as amended ("1933 Act"), or any state securities law,
the shares will be offered by the Corporation pursuant to exemptions from
registration under such laws. In such a case, no federal or state securities law
administrator will pass on or endorse the merits of each offering of the
Corporation's shares pursuant to the Plan and any representation contrary to the
above is unlawful.
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<PAGE>
(b) Risk of Investment. The participants in the Plan
understand that the shares which will be offered pursuant to the Plan are
suitable only for persons who are able to bear the risk of their investment and
who are acquiring them for their own account for investment and not with a view
to the resale or distribution of the shares and who recognize and acknowledge
that the transfer of the shares will be subject to restrictions on their
transfer.
(c) Information Provided. In connection with the purchase of
the Corporation's shares pursuant to the Plan, the Corporation will provide each
Optionee with any such information about the Corporation that can be reasonably
produced by the Corporation, which may be reasonably requested by an Optionee to
enable the Optionee to decide on whether to purchase shares of Common Stock
under his Option. No one besides a duly authorized officer of the Corporation is
authorized to give any information or make any representations in connection
with the exercise of Options.
(d) Options Subject to Applicable Laws. The exercise of each
Option shall be subject to the condition that if at any time the Corporation
shall (i) determine in its discretion that (I) the satisfaction of withholding
tax or other withholding liabilities, (II) the registration of any shares
otherwise deliverable upon such exercise under any state or federal law, or
(III) the consent or approval of any regulatory body is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto; or (ii) determine that certain limitations
on the number of shares sold or number of Optionees acquiring such shares should
be limited in any manner or that the Plan otherwise requires certain amendments
to comply with applicable exemptions under state or federal securities law; then
in any such event, such exercise shall not be effective unless such withholding,
registration, consent, approval, limitations or amendments shall have been
effected or obtained free of any conditions not acceptable to the Corporation
(e) Additional Restrictions. Shares which are issued pursuant
to the Plan will be subject to the following additional limitations and
restrictions, in addition to the restrictions set forth above and which may be
contained in an Option Agreement:
(i) The shares of Common Stock acquired by exercise of the
Options shall not be sold, pledged, hypothecated or otherwise transferred unless
such shares are exempt from registration under the 1933 Act, and any applicable
state securities law or are properly registered thereunder.
(ii) An Optionee may not sell any shares of Common Stock
acquired through the exercise of an Option without first complying with any
applicable restrictions or preemptive rights which have been properly created by
the Corporation with respect to the sale of its shares, including any buy-sell
agreements or rights of first refusal.
(iii) A legend has been or will be placed on the
certificate(s) evidencing such shares which discloses all applicable
restrictions as to their transferability.
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<PAGE>
9. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Prior to each Optionee's
purchase of shares under the Plan, each Optionee may be required to represent
and warrant to certain matters, which representations and warranties will be
relied upon -by the Corporation in permitting the exercise by such Optionee of
his Option in accordance with applicable exemptions from federal and state
securities law.
10. USE OF PROCEEDS. The proceeds received by the Corporation for the
sale of Common Stock pursuant to the exercise of Options granted under the Plan
shall be added to the Corporation's general funds and used for general corporate
purposes.
11. EMPLOYMENT. Nothing in this Plan shall be deemed to grant any right
of continued employment to a participating employee or to limit or waive any
rights of the Corporation.
12. AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN. The Board may at
any time suspend or terminate the Plan or may amend it from time to time in such
respects as the Board may deem advisable in order that the Option granted
thereunder may conform to any changes in the law or in any other respect which
the Board may deem to be in the best interests of the Corporation. The Board
shall have right to exercise the power described in the preceding sentence
without further action of the shareholders; provided, however, that no such
amendment shall, without shareholder approval:
(a) impair any Option or deprive any Optionee of shares that may have
been granted to him under the Plan;
(b) increase the aggregate number of the shares specified in
Paragraph 4 of this Plan;
(c) change the class of employees eligible to receive Options under
the Plan; or
(d) extend the period during which any Option may be granted or
exercised.
Nothing contained herein shall be deemed to preclude the adoption by the Board
of one or more additional stock option plans either during or subsequent to the
term of this Plan. The Plan shall terminate ten (10) years after the effective
date of the Plan, unless the Plan shall theretofore have been terminated by the
Board.
13. EFFECTIVE DATE OF PLAN. The effective date of the Plan is June 14,
1988. The effectiveness and validity of the Plan is subject to its approval by
the shareholders of the Corporation within twelve (12) months after the date of
its adoption.
14. CERTAIN CONDITIONS UNDER TAX LAWS.
(a) The aggregate fair market value (determined as of the time
of a grant of an Option hereunder) of the stock with respect to which Options
are exercisable for the first time by an
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<PAGE>
Optionee during any calendar year under this Plan and any other incentive stock
option plan maintained by the Corporation and its affiliates shall not exceed in
the aggregate One Hundred Thousand Dollars ($100,000).
(b) Notwithstanding anything to the contrary contained in the
Plan, the provisions of the Plan are intended and should be interpreted as
necessary to permit any Options to qualify as "incentive stock options" as that
term is defined in Section 422A of the Internal Revenue Code, and any provisions
of the Plan are hereby amended in their entirety to the extent necessary to
permit all options granted pursuant to the provisions of the Plan to qualify as
incentive stock options as that term is defined in Section 422A of the Internal
Revenue Code.
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INCENTIVE STOCK OPTION AGREEMENT
TIDEL TECHNOLOGIES, INC.
1997 LONG-TERM INCENTIVE PLAN
1. GRANT OF OPTION. Pursuant to the Tidel Technologies, Inc. 1997
Long-Term Incentive Plan (the "Plan") for key management employees of Tidel
Technologies, Inc., a Texas corporation (the "Company"), or its Subsidiaries,
the Company grants to
------------------------------
(the "Grantee")
an option to purchase from the Company a total of _____________ (_______) full
shares ("Stock Options") of Class A Common Stock ("Common Stock") of the Company
at _______________ dollars ($________) per share (being the Fair Market Value
per share of the Common Stock on this Date of Grant), in the amounts, during the
periods, and upon the terms and conditions set forth in this Agreement. The Date
of Grant of this Stock Option is ________________. This is an option intended to
be an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code") and regulations issued thereunder to
purchase from the Company the number of shares of Common Stock, at the purchase
price per share, and on the schedule, all as set forth herein. In the event the
Stock Options exceed any limitations under the Code applicable to incentive
stock options then the Stock options that exceed the limitations shall be
treated as nonqualified stock options as set forth in Section 2.3(b) of the
Plan. If the Stock Options exercised in any given year exceed the limitations
under the Code for incentive stock options, the Committee in its discretion may
designate which Stock Options are incentive stock options by issuing separate
certificates and identifying such stock as incentive stock option stock in the
Company's stock transfer records.
2. SUBJECT TO PLAN. This Stock Option and its exercise are subject to
the terms and conditions of the Plan, but the terms of the Plan shall not be
considered an enlargement of any benefits under this Agreement. The capitalized
terms used in this Agreement shall have the meaning as set forth herein and to
the extent not defined herein shall have the same meanings assigned to them in
the Plan. This Stock Option is subject to any rules promulgated pursuant to the
Plan by the Board or the Committee and communicated to the Grantee in writing.
3. VESTING: TIME OF EXERCISE. Except as specifically provided in this
Agreement and subject to certain terms, restrictions and conditions set forth in
the Plan, this Stock Option is exercisable in the following cumulative
installments:
First installment. Up to 50% of the total Stock Options at any time
following the third anniversary of the Date of Grant.
<PAGE>
Second installment. Up to 100% of the total Stock Options at any time
following the fourth anniversary of the Date of Grant.
Notwithstanding the vesting schedule set forth above, all Stock Options granted
under this Agreement shall become exercisable immediately upon the death,
Disability or Termination for Good Reason of Grantee.
4. TERM; FORFEITURE. This Stock Option, and all unexercised Stock
Options granted to the Grantee hereunder, will terminate and be forfeited at the
first of the following to occur:
(a) 5:00 p.m. on __________________ (Ten Years from Date of Grant)
(b) 5:00 p.m. on the date which is three (3) months following the
Grantee's termination of employment due to Termination for Good Reason or
Retirement for Stock Options vested at termination;
(c) 5:00 p.m. on the date which is twelve (12) months following the
Grantee's termination of employment due to Death or Disability for Stock Options
vested at termination;
(d) 5:00 p.m. on the day after the date of any other termination of
employment not described in Section 4(a) - (c) above, including Termination for
Cause or employee voluntary termination (excluding Termination for Good Reason).
5. WHO MAY EXERCISE. Subject to the terms and conditions set forth in
Section 3 and 4 above, during the lifetime of the Grantee, this Stock Option may
be exercised only by the Grantee, or by the Grantee's guardian. If a termination
of employment of the Grantee occurs as a result of death or Disability prior to
the termination date specified in Section 4 hereof and the Grantee has not
exercised this Stock Option as to the maximum percentage of Stock Options set
forth in Section 3 hereof as of the date of death or Disability, the following
persons may exercise the exercisable portion of this Stock Option on behalf of
the Grantee at any time prior to the earlier of the dates specified in Section 4
hereof: (i) if the Grantee is disabled, the guardian of the Grantee; or (ii) if
the Grantee dies, the personal representative of his estate, or the person who
acquired the right to exercise this Stock Option by bequest or inheritance or by
reason of the death of the Grantee; provided that this Stock Option shall remain
subject to the other terms of this Agreement, the Plan, and applicable laws,
rules and regulations.
6. RESTRICTIONS. This Stock Option may be exercised only with respect
to full shares, and no fractional share of stock shall be issued.
7. MANNER OF EXERCISE. Subject to such administrative regulations as
the Board or the Committee may from time to time adopt, this Stock Option may be
exercised by the delivery of written notice to the Secretary of the Company
setting forth the number of shares of common Stock with respect to which the
Stock Option is to be exercised and the date of exercise thereof (the
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<PAGE>
"Exercise Date") which shall be at least three (3) days after giving such notice
unless an earlier time shall have been mutually agreed upon. On the Exercise
Date, the Grantee shall deliver to the Company consideration with a value equal
to the total Stock Option price of the shares to be purchased, payable as
follows: (a) cash, certified check, bank draft, or money order payable to the
order of the Company, (b) Common Stock (including Restricted Stock), valued at
its Fair Market Value on the Exercise Date, and/or (c) any other form of payment
which is acceptable to the Committee. In the event that shares of Restricted
Stock are tendered as consideration for the exercise of a Stock Option, a number
of shares of Common Stock issued upon the exercise of the Stock Option, equal to
the number of shares of Restricted Stock used as consideration therefor, shall
be subject to the same restrictions as the Restricted Stock so submitted. Common
Stock which is acquired by the Grantee pursuant to the exercise of this Stock
Option may not be used to exercise a subsequent option until and unless such
shares have been held for a period ending on the later of two (2) years from
_______________ (Date of Grant) or one (1) year after the date of exercise of
such Stock Option.
Upon payment of all amounts due from the Grantee, the Company shall
cause certificates for the Stock Options then being purchased to be delivered to
the Grantee (or the person exercising the Grantee's Stock Option in the event of
Grantee's death) at its principal business of lice promptly after the Exercise
Date. The obligation of the Company to deliver shares of Common Stock shall,
however, be subject to the condition that if at any time the Committee shall
determine in its discretion that the listing, registration, or qualification of
the Stock Option or the Stock Options upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
Stock Option or the issuance or purchase of shares of Common Stock thereunder,
then the Stock Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
If the Grantee fails to pay for any of the Stock Options specified in
such notice or fails to accept delivery thereof, then the Grantee's right to
purchase such Stock Options may be terminated by the Company.
The Company shall have the right to deduct from all amounts hereunder
paid in cash or other form, any Federal, state or local taxes required by law to
be deducted. The Grantee receiving shares of Common Stock issued under this
Stock Option shall be required to pay the Company the amount of any taxes which
the Company is required to withhold with respect to such shares of Common Stock.
Such payments shall be required to be made prior to the delivery of any
certificate representing such shares of Common Stock. Such payment may be made
in cash, by check, or through the delivery of shares of Common Stock owned by
the Grantee (which may be effected by the actual delivery of shares of Common
Stock by the Grantee or if the Grantee is not an insider (as defined by the
Securities and Exchange Commission), by the Company's withholding a number of
shares to be issued upon exercise of this Stock Option, if applicable), which
shares have an aggregate Fair Market Value equal to the required minimum
withholding payment, or any combination thereof.
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<PAGE>
9. RIGHTS AS STOCKHOLDER. The Grantee will have no rights as a
stockholder with respect to any shares covered by this Stock Option until the
issuance of a certificate or certificates to the Grantee for the shares. Except
as other vise provided in Section lo hereof no adjustment shall be made for
dividends or other rights for which the record date is prior to the issuance of
such certificate or certificates.
10. ADJUSTMENT OF NUMBER OF SHARES AND RELATED MATTERS. The number of
shares of Common Stock covered by this Stock Option, and the exercise price
thereof, shall be subject to adjustment in accordance with Section 5.5 of the
Plan. In the event the Stock Option shall be exercised in whole, this Agreement
shall be surrendered to the Company for cancellation. In the event the Stock
Option shall be exercised in part, or a change in the number or designation of
the Common Stock shall be made, this Agreement shall be delivered by Grantee to
the Company for the purpose of making appropriate notation thereon, or of
otherwise reflecting, in such manner as the Company shall determine, the partial
exercise or the change in the number or designation of the Common Stock.
11. GRANTEE'S REPRESENTATIONS. Notwithstanding any of the provisions
hereof, the Grantee hereby agrees that Grantee will not exercise the Stock
Option granted hereby, and that the Company will not be obligated to issue any
shares to the Grantee hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by the Grantee or the Company of any
provision of this Agreement, the Plan or any law or regulation of any
governmental authority. Any determination in this connection by the Committee
shall be final, binding, and conclusive. The obligations of the Company and the
rights of the Grantee are subject to this Agreement, the Plan or all applicable
laws, rules, and regulations.
12. INVESTMENT REPRESENTATION. Unless the Common Stock is issued to
Grantee in a transaction registered under applicable federal and state
securities laws, by Grantee's execution hereof, the Grantee represents and
warrants to the Company that all Common Stock which may be purchased hereunder
will be acquired by the Grantee for investment purposes for Grantee's own
account and not with any intent for resale or distribution in violation of
federal or state securities laws. Unless the Common Stock is issued to Grantee
in a transaction registered under the applicable federal and state securities
laws, all certificates issued with respect to the Common Stock shall bear an
appropriate restrictive investment legend.
13. PARTICIPANT'S ACKNOWLEDGMENTS. The Grantee acknowledges receipt of
a copy of the Plan and represents that Grantee is familiar with the terms and
provision thereof, and hereby accepts this Stock Option subject to all the terms
and provisions thereof. The Grantee hereby agrees to accept as binding,
conclusive, and final all decisions or interpretations of the Board and the
Committee, upon any questions arising under the Plan or this Agreement. Any
disagreement by the Grantee to any decision or interpretation of the Board or
the Committee shall be settled exclusively by arbitration as set forth in
Section 6.11 of the Plan and Section 27 herein.
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<PAGE>
14. GOVERNING LAW AND VENUE. This Agreement shall be construed in
accordance with the laws of the State of Texas without giving effect to any
principle of conflict of laws that would require the application of any other
jurisdiction, except as superseded by federal law, and in accordance with
applicable provisions of the Code and regulations or other authority issued
thereunder by the appropriate governmental authority, consistent with the Stock
Options being treated as Incentive Stock Options under the Code. Venue for any
dispute shall lie exclusively in Dallas, Dallas County, Texas.
15. NO RIGHT TO CONTINUE EMPLOYMENT. Nothing herein shall be construed
to confer upon the Grantee the right to continue in the employment of the
Company or any Subsidiary or interfere with or restrict in any way the right of
the Company or any Subsidiary to discharge the Grantee at any time (subject to
any contract rights of the Grantee).
16. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
17. COVENANTS AND AGREEMENTS AS INDEPENDENT AGREEMENTS. Each of the
covenants and agreements that is set forth in this Agreement shall be construed
as a covenant and agreement independent of any other provision of this
Agreement. The existence of any claim or cause of action of the Grantee against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.
18. ENTIRE AGREEMENT. This Agreement together with the Plan supersede
any and all other prior understandings and agreements, either oral or in
writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to the
said subject matter. All prior negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement. Each
party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party or by
anyone acting on behalf of any party, which are not embodied in this Agreement
or the Plan and that any agreement, statement or promise that is not contained
in this Agreement or the Plan shall not be valid or binding or of any force or
effect.
l9. PARTIES BOUND. The terms, provisions, representations, warranties,
covenants, and agreements that are contained in this Agreement shall apply to,
be binding upon, and inure to the benefit of the parties and their respective
heirs, executors, administrators, legal representatives, and permitted
successors and assigns.
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<PAGE>
20. MODIFICATION. No change or modification of this Agreement shall be
valid or binding upon the parties unless the change or modification is in
writing and signed by the parties. Notwithstanding the preceding sentence, the
Company may amend the Plan or revoke this Stock Option to the extent permitted
in the Plan.
21. GENDER AND NUMBER. Words of any gender used in this Agreement shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the context
requires otherwise.
22. NOTICE. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered only when actually received by the Company or by
the Grantee, as the case may be, at the addresses set forth below, or at such
other addresses as they have theretofore specified by written notice delivered
in accordance herewith.
(A) Notice to the Company shall be addressed and delivered as
follows:
Tidel Technologies, Inc.
2310 McDaniel Drive
Carrollton, Texas 75006
Attn: Corporate Secretary
with a copy to:
Tidel Technologies, Inc.
5847 San Felipe, Ste. 900
Houston, Texas 77057
Attn: Corporate Secretary
(B) Notice to the Grantee shall be addressed and delivered as
follows:
---------------------
---------------------
---------------------
23. COMMISSION. To the extent required by law, stock ownership under
the Plan and this Agreement will be subject to the applicable provisions of the
Exchange Act, if, after exercise of any Stock Options granted under the Plan,
the Grantee is found to be disqualified pursuant to the provisions of the
Exchange Act, the Grantee shall dispose of Grantee's shares of Common Stock and
the Company shall have the absolute right to repurchase such shares at the then
Fair Market Value or the exercise price, whichever is the lesser.
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<PAGE>
25. NONDISCLOSURE AGREEMENT.
(a) During the terms of this Agreement, Grantee shall have
access to and become familiar with various trade secrets, patents, copyrightable
material, technology and knowhow consisting of, but not limited to, processes,
computer software, compilations of information, records, sales procedures,
customer requirements, pricing techniques, customer lists, methods of doing
business and other confidential information (collectively referred to as the
"Proprietary Information"), which the Company and its Subsidiaries own, license
or are authorized to use, and regularly use in the operation of its business.
Grantee shall not use in any way or disclose any of the Proprietary Information,
directly or indirectly, either during the terms of this Agreement or at any time
thereafter, except as required in the course of employment with Company and its
Subsidiaries. All files, records, documents, information, data and similar items
relating to the business of the Company and its Subsidiaries, whether prepared
by Grantee or otherwise coming into Grantee's possession, shall remain the
exclusive property of the Company and its Subsidiaries and shall not be removed
from the premises of the Company and its Subsidiaries under any circumstances
without the prior written consent of the Company and its Subsidiaries (except in
the ordinary course of business during Grantee's period of active employment
with the Company and its Subsidiaries), and in any event shall be promptly
delivered to the Company upon the termination of Grantee's employment with the
Company and its Subsidiaries.
(b) Grantee hereby agrees not to disclose, directly or
indirectly, either during the terms of this Agreement or at any time thereafter,
except as required in the course of employment with the Company or its
Subsidiaries the precise nature of the Company's or its Subsidiaries' business,
including without limitation, the fact that the Company or its Subsidiaries may
from time to time, keep currency on its premises.
(c) Grantee hereby acknowledges and recognizes that from time
to time the Company's or it Subsidiaries' customers may require that Grantee
execute nondisclosure agreements with such customers and Grantee agrees to
execute such nondisclosure agreements as the Company or its Subsidiaries may
request.
(d) Grantee agrees that all products, including any
improvements or modifications of any products, that Grantee designs, develops or
invents in the course of Grantee's employment with the Company or its
Subsidiaries will be the exclusive property of the Company and its Subsidiaries
and may not be used by Grantee outside of the scope of Grantee's engagement by
the Company and its Subsidiaries for any purpose whatsoever. Grantee also agrees
that the Company and its Subsidiaries will acquire the ownership of all
originals and copies of documents, drawings, prototypes, disks, tapes and other
media or works related to such products from the time of their creation. In
addition, the Company and its Subsidiaries agree to execute all documents
necessary for the Company to secure or protect their interest in the foregoing
products and related materials, including the execution of written assignments
to the Company and its Subsidiaries, and to assist the Company and its
Subsidiaries, at their expense, in the making and prosecution of all patent and
copyright applications and the prosecution of all actions for patent or
copyright infringement.
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<PAGE>
26. NONCOMPETITION AGREEMENT. To the extent Grantee has entered into a
written employment agreement or any other agreement with the Company or any of
its Subsidiaries and such employment agreement or other agreement includes a
covenant not to compete, then the terms of such covenant not to compete are
hereby incorporated by reference. If the Grantee violates the terms of such
employment agreement or other agreement, then the Stock Options granted herein
shall not be exercisable until such violation is cured or corrected in a manner
acceptable to the Committee or Board. The Stock Options granted pursuant to this
Agreement are intended as additional consideration for any covenant not to
compete set forth in Grantee's written employment agreement or other agreement.
27. ARBITRATION. Any unresolved dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in Dallas, Texas, in
accordance with the rules of the American Arbitration Association then in
effect. The arbitrators shall not have the authority to add to, detract from, or
modify any provision hereof nor to award punitive damages to any injured party.
A decision by a majority of the arbitration panel shall be final, non-appealable
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the Company.
Each party shall bear his or its own costs of arbitration, but if
Grantee is the prevailing party in such arbitration, Grantee shall be entitled
to recover from Company as part of any award entered Grantee's reasonable
expenses for attorneys' fees and disbursements.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, the Grantee, to evidence his or her
consent and approval of all the terms hereof, has duly executed this Agreement,
as of the date specified in Section 1 hereof.
TIDEL TECHNOLOGIES, INC.
By:_______________________________________
James T. Rash
Chief Executive Officer
GRANTEE:
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AMERICAN MEDICAL TECHNOLOGIES, INC.
1989 INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement is effective the 1st day of
October, 1995, between AMERICAN MEDICAL TECHNOLOGIES, INC., a Delaware
corporation (the "Corporation"), and ____________________ (hereinafter
"Optionee").
Recitals
A. The Corporation's Board of Directors adopted its 1989 Incentive
Stock Option Plan ("Plan") to be effective as of June 14, 1988. A copy of the
Plan is attached hereto as Annex A and is incorporated for all purposes.
B. The Corporation has determined to grant to the Optionee the right to
acquire certain shares of the Corporation's common stock, par value of $.01 per
share, all as provided more fully hereinafter, subject to the terms and
provisions of this Agreement and the Plan.
Now therefore, in consideration of the mutual undertakings, covenants,
conditions and agreements contained herein, the parties hereto agree as follows:
1. GRANT OF STOCK OPTION. The Corporation hereby grants to the
Optionee, a regular salaried employee of the Corporation or a subsidiary
thereof, under the terms and conditions of the Plan and the terms and conditions
hereinafter specified, the right to acquire up to ________ shares of the
Corporation's common stock, $.01 par value (hereinafter "Option Stock"). The
option granted hereunder is effective on the effective date of this Agreement,
and unless sooner terminated under the provisions hereof, shall expire at 12:00
Midnight on ___________ (ten years from date of grant) (hereinafter "Expiration
Date").
2. OPTION PRICE. The purchase price per share of the Option Stock shall
be $ , which is an amount equal to 100 percent of the fair market value per
share of the Corporation's Common Stock as of the original date of issue as
determined by the Board of Directors of the Corporation (the "Board") or the
Compensation Committee appointed by the Board to administer the Plan.
3. EXERCISE. Subject to the limitations contained herein, the Optionee
may exercise the Option granted hereunder to purchase shares of Option Stock
according to the vesting schedule set forth in Annex A hereto and in accordance
with the following terms and conditions:
(i) Once a portion of the Option becomes exercisable, it shall
continue to be exercisable until the Expiration Date or the termination of such
Option rights under this Agreement;
(ii) Optionee may elect to purchase Option Stock only once
during any calendar quarter;
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<PAGE>
(iii) The Option may be exercised with respect to whole shares
only and not fractional shares;
(iv) The Option shall be exercised by giving written notice to
the Corporation in compliance with Paragraph 13 of this Agreement. Such notice
shall be in the form of a Subscription Agreement to be supplied by the
Corporation and shall state the number of shares with respect to which the
Option is being exercised and shall specify a date which shall not be less than
fifteen (15) nor more than thirty (30) days after the date of such notice as the
date on which the shares of Option Stock will be taken up and payment made
therefor. Payment in full for the number of shares to be transferred to the
Optionee pursuant to the exercise or partial exercise of the Option shall be
made in the form of cash, bank check or in whole shares of Common Stock of the
Corporation based on the fair market value on the date of exercise (or any
combination thereof) at the principal office of the Corporation. If any law or
regulation requires the Corporation to take any action with respect to the sale
of shares specified in such notice, the date of exercise of the Option and the
delivery of shares and payment therefor shall be extended for the period
necessary to take such action.
4. TERMINATION. Upon termination of an Optionee's employment with the
Corporation (other than by death) or the death of the Optionee, the rights under
this Agreement to exercise the Option shall be limited to the Option Stock which
was immediately purchasable by the Optionee at the date the terminating event
occurs and such option privileges shall expire unless exercised by Optionee
within three (3) months after termination of employment (other than by death) or
within one (1) year after the death of Optionee.
5. DEATH. Upon the death of an Optionee while employed with the
Corporation or any of its subsidiaries, the Optionee shall become fully vested
and the Optionee's estate shall have up to one year a If ter the death of the
Optionee to exercise said shares.
6. ADJUSTMENTS. The Option Stock shall be subject to the adjustment
provisions contained in Paragraph 8 of the Plan.
7. EFFECT UPON EMPLOYMENT. This Agreement is not an employment
agreement and does not change any rights of the Corporation or Optionee under
their employer-employee relationship including the Corporation's right to
terminate the employment of the Optionee at any time.
8. SHARES RESERVED. The Corporation shall, at all times during the term
of this Agreement, reserve and keep available such number of its common shares
as will be sufficient to satisfy the requirements of this Agreement and shall
pay all fees and expenses necessarily incurred by the Corporation in connection
with the issuance of such shares.
9. RESTRICTION ON ISSUANCE OF SHARES. In the event that the shares
issued or to be issued pursuant to exercise of the Option have not been
registered under the Securities Act of 1933, as amended, the Corporation shall
not be obligated to sell any such shares hereunder unless same are
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<PAGE>
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. The Optionee shall, at the time such Option
Stock is received, make and comply with the investment representations as
contained in the Subscription Agreement and otherwise as may be required by the
Corporation's counsel, to secure to the Corporation an appropriate exemption
from applicable securities laws.
10. Options Subject to Applicable Laws. The exercise of each Option
shall be subject to the condition that if at any time the Corporation shall (i)
determine in its discretion that (I) the satisfaction of withholding tax or
other withholding liabilities, (II) the registration of any shares otherwise
delivered upon such exercise under any state or federal law; or (III) the
consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares pursuant thereto; or (ii) determine that certain limitations on the
number of shares sold or number of Optionee's acquiring such shares should be
limited in any manner or that the Option otherwise requires certain additional
steps to be taken to comply with applicable exemptions under state or federal
securities laws; then in any such event, such exercise shall not be effective
unless such withholding, registration, consent, approval, limitations or
amendments shall have been effected or obtained free of any conditions not
acceptable to the Corporation.
11. RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights as a
Shareholder as a result of this Agreement prior to the acquisition of
Corporation stock pursuant to this Agreement.
12. RESTRICTIONS ON TRANSFER.
(a) Of the Options. The Option may not be assigned,
transferred, pledged or hypothecated in any way, may not be assignable by
operation of law, and may not be subject to execution, attachment or similar
process, other than by the laws of descent and distribution. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option shall be null and void and without effect.
(b) Of the Option Stock. The shares of Common Stock acquired
by exercise of the Options shall not be sold, pledged, hypothecated or otherwise
transferred (i) unless such shares are exempt from registration under the
Securities Act of 1933, as amended, and any applicable state securities laws;
and (ii) until the Optionee has first complied with any applicable restrictions
or preemptive rights which have been properly created by the Corporation with
respect to the sale of its shares, including any buy-sell agreements or rights
of first refusal. Any purported transfer in violation of this provision shall be
null and void and ineffectual to transfer any interest or title in the purported
transferee.
13. NOTICES. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered or mailed, first class, with postage prepaid, to:
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<PAGE>
If to the Corporation, addressed to:
James T. Rash, President
American Medical Technologies, Inc.
5847 San Felipe, Suite 900
Houston, Texas 77057
If to the Optionee, addressed to the address for notice set
forth beneath Optionee's signature below.
Delivery shall be made to such other address for notice as
either party shall hereafter notify the other party in writing, from time to
time.
14. GOVERNING LAW. This Agreement has been executed in and shall be
governed by the laws of the State of Texas.
15. DISPUTES. As a condition of the granting of the Option granted
herein, the Optionee agrees, for himself and his personal representatives, that
any dispute or disagreement which may arise under or as a result of or pursuant
to this Agreement shall be determined by the committee appointed by the Board to
administer the Plan in its sole discretion, and that any interpretation by such
committee of the terms of this Agreement shall be final, binding and conclusive.
16. ENTIRE AGREEMENT. This Agreement contains the entire understanding
between the parties hereto concerning the subject matter contained herein. There
are no representations, agreements, arrangements, or understandings, oral or
written, between or among the parties hereto, relating to the subject matter of
this Agreement, which are not fully expressed herein.
17. APPROVAL OF SHAREHOLDERS. The effectiveness and validity of this
Agreement, the exercise of the Option granted herein and the issuance of shares
of Common Stock pursuant to this Agreement are expressly subject to the
ratification and approval of the Plan by the shareholders of the Corporation
within twelve (12) months after the date of the adoption of the Plan by the
Board.
18. NO AFFECT ON CORPORATION. The existence of the option herein
granted shall not affect in any way the right or power of the Corporation or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting the
common stock of the Corporation or the rights thereof, or dissolution or
liquidation of the Corporation, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceedings, whether of a
similar character or otherwise.
19. THE PLAN. This Agreement is made pursuant to the Plan and is
subject to all the terms, provisions and conditions set forth therein. In the
case of any inconsistency between the terms of this
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<PAGE>
Agreement and the terms of the Plan, the terms of the Plan shall in each case
take precedence over the terms of this Agreement. By the execution of this
Agreement, Optionee acknowledges receipt of a copy of the Plan.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective the date first set forth above.
CORPORATION:
AMERICAN MEDICAL TECHNOLOGIES, INC.
By:_____________________________________
JAMES T. RASH,
President
ATTEST:
- ------------------------------------
Susan Riley,
Assistant Secretary
OPTIONEE:
----------------------------------------
Address:
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<PAGE>
ANNEX A
VESTING SCHEDULE
The shares subject to the Option shall become vested and exercisable at
the rate of an additional 1/3rd of the total of such shares each 12 months, such
vesting to occur as of the last day of the 12th month following the month in
which the Option is granted and as of the last day of each succeeding 12 months
until the Option becomes fully vested and exercisable as of the last day of the
third year, provided that in the event that a fractional share results when
applying this calculation, the vested portion shall be determined by rounding
off to the next lowest whole share.
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OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 753-7200
February 14, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Tidel Technologies, Inc.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by Tidel Technologies, Inc., a Delaware corporation (the
"Company"). The Registration Statement relates to an aggregate of 1,438,250
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock") under the 1997 Long-Term Incentive plan (the "Incentive Plan") and the
1989 Incentive Stock Option Plan (the "Stock Option Plan").
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and Bylaws of the Company, minutes of meetings of the Board of
Directors and stockholders of the Company, the Incentive Plan and the Stock
Option Plan, the documents to be sent or given to participants in the Plans and
such other documents, instruments and certificates of officers and
representatives of the Company
<PAGE>
Securities and Exchange Commission
February 14, 2000
Page -2-
and public officials, and we have made such examination of the law, as we have
deemed appropriate as the basis for the opinion hereinafter expressed. In making
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of documents submitted to us as certified or photostatic
copies.
Based upon the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the terms and conditions
described in the Incentive Plan or the Stock Option Plan, will be duly and
validly issued, fully paid and non-assessable.
Very truly yours,
/s/ Olshan Grundman Frome Rosenzweig & Wolosky LLP
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Tidel Technologies, Inc.
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Houston, Texas
February 11, 2000
