EXHIBIT 99(b)
DIGITAL BIOMETRICS, INC.
1992 RESTRICTED STOCK PLAN
AS AMENDED THROUGH FEBRUARY 8, 2000
ARTICLE I.
PURPOSE
The purpose of this Restricted Stock Plan is to provide additional incentive
to certain key Employees who are making and can continue to make substantial
contributions to the success of Digital Biometrics, Inc. ("DBI") by providing
them with an opportunity to acquire a proprietary interest in DBI through the
grant of shares of restricted stock. It is the judgment of DBI's Board of
Directors that the acquisition of a proprietary interest in DBI by such
Employees will increase their personal interest in its growth and progress,
thereby promoting the interests of DBI. The Restricted Stock Plan also provides
for the grant of restricted stock to members of DBI's Board of Directors who are
not employees of DBI. The Board of Directors believes that the grant of
restricted stock to non-employee directors will increase the attractiveness of
service on the Board of Directors and will provide additional incentive for such
directors to enhance DBI's long-term success and progress.
ARTICLE II.
DEFINITIONS
The following words and terms, as used in the Plan, shall have the
respective meanings hereinafter set forth unless a different meaning is clearly
required by the context. Whenever appropriate, words used in the singular shall
be deemed to include the plural, and the masculine gender shall be deemed to
include the feminine gender.
2.1 BOARD. The Board of Directors of DBI.
2.2 COMMITTEE. The Compensation and Personnel Committee of the Board.
2.3 COMMON STOCK. The common stock of DBI.
2.4 EMPLOYEES. Any individual employed by and receiving compensation
from DBI or a Related Company.
2.5 EXCHANGE ACT. The Securities Exchange Act of 1934, as now in effect
or hereafter amended.
2.6 FAIR MARKET VALUE. The Fair Market Value of a share of Common Stock
means (i) if there is a market for such Common Stock on a stock
exchange, in an over-the-counter market, or otherwise, the mean
between the highest and lowest quoted selling prices on the date of
grant; (ii) if there are no sales on the date of grant but were
sales on dates within a reasonable period both before and after the
date of grant, Fair Market Value is determined by taking a weighted
average of the means between the highest and lowest sales prices on
the nearest date before and nearest date after the date of grant
(the average is to be weighted adversely by the respective numbers
of trading days between the selling dates and the date of grant); or
(iii) in the event that (i) or (ii) do not apply, any other method
determined by the Committee in its discretion.
2.7 NON-EMPLOYEE DIRECTOR. A member of the Board who is not an Employee
of DBI or a Related Company.
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2.8 PERIOD OF RESTRICTION. The period during which the transfer of
shares of Restricted Stock granted under the Plan is restricted
pursuant to Subsections 5.3 or 6.3 of the Plan.
2.9 PLAN. The Digital Biometrics, Inc. Restricted Stock Plan as set
forth herein, as may be amended from time to time hereafter.
2.10 RELATED COMPANY. Any corporation that is, along with DBI, a member
of a parent-subsidiary controlled group of corporations, as defined
in Code Section 1563(a)(1) of the Internal Revenue Code.
2.11 RESTRICTED STOCK. The grant or purchase of shares of Common Stock
which is nontransferable and is subject to a substantial risk of
forfeiture until specified conditions are satisfied pursuant to the
terms of the Plan.
2.12 STOCKHOLDERS. The present stockholders or future stockholders, as
the case may be, of DBI.
ARTICLE III.
SHARES SUBJECT TO PLAN
3.1 The total number of shares of Common Stock which is available for the
granting of Restricted Stock shall be 350,000 shares. If DBI shall at any time
hereafter subdivide, combine or reclassify its Common Stock, or declare a
dividend payable in Common Stock, the number of shares available for granting of
Restricted Stock hereunder shall be proportionately increased or decreased, as
the case may be, to prevent dilution or inflation.
3.2 At all times during the term of this Plan, DBI shall reserve for
issuance and delivery such number of shares of Common Stock as will be
sufficient to satisfy the requirements hereof.
ARTICLE IV.
ADMINISTRATION
4.1 The Plan shall be administered by the Committee. The Committee shall
consist of not less than two members of the Board who are "disinterested
persons" as defined in Rule 16b-3 under the Exchange Act. A majority of the
members of the Committee shall constitute a quorum. All determinations of the
Committee shall be made by at least a majority of its members. Any decision or
determination reduced to writing and signed by all of the members of the
Committee shall be fully as effective as if it had been made by unanimous vote
at a meeting duly called and held.
4.2 In accordance with the provisions of the Plan, the Committee shall
select the Employees to whom Restricted Stock shall be granted; shall determine
the number of shares of Restricted Stock granted to each Employee, the time at
which the Restricted Stock is to be granted; and shall establish such other
provisions of the Restricted Stock grants as the Committee may deem necessary or
desirable.
4.3 Grants of Restricted Stock to Non-Employee Directors shall be automatic
pursuant to Article VI of the Plan and not subject to discretion.
4.4 The Committee may adopt such rules and regulations for carrying out the
Plan as it may deem proper and in the best interests of DBI. The interpretation
of any provision of the Plan by the Committee and any determination on the
matters referred to in this Article IV shall be final.
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4.5 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan.
4.6 The Committee shall prescribe the for-in, which shall be consistent with
the Plan, of any agreement evidencing the grant of Restricted Stock.
ARTICLE V.
GRANTS OF RESTRICTED STOCK TO EMPLOYEES
5.1 Each Employee who is considered to be a key administrative, managerial,
executive or technical employee, as determined in the sole discretion of the
Committee, shall be eligible to be granted Restricted Stock under the Plan.
5.2 Subject to the provisions of the Plan, the Committee, at any time and
from time to time, may grant shares of Restricted Stock under the Plan to such
eligible Employees and in such amounts as it shall determine. The Committee
shall have full discretion to determine the terms and conditions of the grant of
Restricted Stock to any Employee.
5.3 Except as provided in this Article V, the shares of Restricted Stock
granted hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated for such period of time as shall be determined by the
Committee, or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Restricted Stock
agreement. After the end of the Period of Restriction as set forth in the
Restricted Stock agreement, the shares of Restricted Stock shall become freely
transferable by the Employee.
5.4 During the Period of Restriction, Employees holding shares of Restricted
Stock may exercise full voting rights and shall be entitled to receive all
dividends and other distributions paid with respect to those shares. If any such
dividends or distributions are paid in shares of Common Stock, the shares shall
be subject to the same restrictions on transferability as the shares of
Restricted Stock with respect to which they were paid.
5.5 Each certificate representing shares of Restricted Stock granted
pursuant to the Plan shall contain a legend in substantially the following form:
"The sale or other transfer of the shares of stock
represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain
restrictions on transfer set forth in the Digital
Biometrics, Inc. Restricted Stock Plan, rules of
administration adopted pursuant to such Plan, and a
Restricted Stock grant dated _________, 19__. A copy of the
Plan, such rules, and such Restricted Stock grant may be
obtained from the Secretary of Digital Biometrics, Inc."
Once the shares are released from the restrictions set forth in Subsection 5.3
above, the Employee shall be entitled to have above legend removed from his
Common Stock certificates.
The Committee may require an Employee to enter into an escrow agreement
providing that the certificates representing the Restricted Stock granted under
the Restricted Stock Plan will remain in the physical custody of an escrow
holder until the Period of Restriction has lapsed.
The Committee shall impose such other restrictions on any shares of
Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
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securities laws, and may legend the certificates representing Restricted Stock
to give appropriate notice of such restrictions.
ARTICLE VI.
GRANTS OF RESTRICTED STOCK TO NON-EMPLOYEE DIRECTORS
6.1 Each Non-Employee Director shall be granted such number of shares of
Restricted Stock on the terms and conditions set forth in this Article VI. Such
grants to Non-Employee Directors shall be automatic and not subject to any
discretion by the Committee.
6.2 Each time that a Non-Employee Director is elected or re-elected to the
Board, he or she shall be granted the number of shares of Restricted Stock equal
to $18,000 divided by the Fair Market Value of one share of Common Stock on the
date of grant. The Restricted Stock shall be granted on the date of the annual
shareholders' meeting to such Non-Employee Directors elected or re-elected at
such meeting. The foregoing formula shall not be amended more often than once
every six (6) months in accordance with Rule 16b-3 under the Exchange Act. If
the number of shares determined under this Subsection 6.2 shall include a
fractional share, the number of shares of Restricted Stock granted to each
Non-Employee Director shall be reduced to the next whole number of shares.
6.3 Shares of Restricted Stock granted to Non-Employee Directors hereunder
may not be sold, transferred, pledged, assigned, or otherwise alternated or
hypothecated until the Period of Restrictions lapses as set forth in the
schedule below:
CUMULATIVE PERCENTAGE OF
ELAPSED TIME FROM RESTRICTED STOCK FOR WHICH THE PERIOD
THE DATE OF GRANT OF RESTRICTION HAS LAPSED
----------------- -------------------------
one year 33 1/3%
two years 66 2/3%
three years 100%
6.4 In the event a Non-Employee Director ceases to be a director of DBI
because of death, disability or the failure of DBI to nominate the director for
another term, the restrictions applicable to the shares of Restricted Stock
pursuant to Subsection 6.3 hereof held by such Non-Employee Director shall
terminate automatically with respect to all such shares. In the event that a
Non-Employee Director ceases to be a director of DBI for any other reason, the
restrictions applicable to the shares of Restricted Stock pursuant to Subsection
6.3 hereof shall terminate automatically with respect to that number of shares
(rounded to the nearest whole number) equal to the total number of shares of
Restricted Stock granted to such Non-Employee Director multiplied by the number
of full months which have elapsed since the date of grant divided by thirty-six
(36). All remaining shares of Restricted Stock still subject to restrictions
shall be forfeited and returned to DBI.
In the event of any merger or consolidation of DBI with another corporation
(other than a merger with a subsidiary in which DBI is the continuing
corporation and which does not result in any change of the outstanding shares of
Common Stock), the restrictions applicable to any shares of Restricted Stock
pursuant to Subsection 6.3 hereof held by a Non-Employee Director shall
terminate automatically with respect to all such shares.
6.5 During the Period of Restriction, Non-Employee Directors holding shares
of Restricted Stock may exercise full voting rights and shall be entitled to
receive all dividends and other distributions paid with respect to those shares.
If any such dividends or distributions are paid in shares of Common Stock, the
shares shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.
6.6 Each certificate representing shares of Restricted Stock granted
pursuant to the Plan shall contain a legend in substantially the following form:
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"The sale or other transfer of the shares of stock represented by
this certificate, whether voluntary, involuntary, or by operation of
law, is subject to certain restrictions on transfer set forth in the
Digital Biometrics, Inc. Restricted Stock Plan, rules of
administration adopted pursuant to such Plan, and a Restricted Stock
grant dated ___________, ____. A copy of the Plan, such rules, and
such Restricted Stock grant may be obtained from the Secretary of
Digital Biometrics, Inc."
Once the shares are released from the restrictions set forth in Subsection 6.3
hereof, the Non-Employee Director shall be entitled to have above legend
removed from his Common Stock certificates.
Each Non-Employee Director shall enter into an escrow agreement providing
that the certificates representing the Restricted Stock granted under the
Restricted Stock Plan will remain in the physical custody of an escrow holder
until the Period of Restriction has lapsed,
The Committee shall impose such other restrictions on any shares of
Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
securities laws, and may legend the certificates representing Restricted Stock
to give appropriate notice of such restrictions.
ARTICLE VII.
GENERAL PROVISIONS
7.1 DBI may deduct and withhold from any cash otherwise payable to an
Employee (whether payable as salary, bonus or other compensation) such amount as
may be required for the purpose of satisfying DBI's obligation to withhold
Federal, state or local taxes. Further, in the event the amount so withheld is
insufficient for such purpose, DB.I may require that the Employee pay to DBI
upon its demand or otherwise make arrangements satisfactory to DBI for payment
of such amount as may be requested by DBI in order to satisfy its obligation to
withhold any such taxes.
With the consent of the Committee, an Employee may be permitted to satisfy
DBI's withholding tax requirements by electing to deliver to DBI shares of
Common Stock having a Fair Market Value on the date income is recognized with
respect to any Restricted Stock equal to the amount required to be withheld. The
election shall be made in writing and shall be made according to such rules and
in such form as the Committee may determine.
7.2 The granting of Restricted Stock shall be subject to all applicable
Federal or state laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
7.3 No shares of Restricted Stock granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution until the
termination of the applicable Period of Restriction. All rights with respect to
Restricted Stock granted to an Employee or Non-Employee Director under the Plan
shall be exercisable during his or her lifetime only by such Employee or
Non-Employee Director.
7.4 An Employee or Non-Employee Director may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of death. Each designation
will revoke all prior designations, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Employee or Non-Employee
Director in writing with the Committee during his or her lifetime. In the
absence of any such designation, benefits remaining unpaid at the Employee's or
Non-Employee Director's death shall be paid to his or her estate.
7.5 Nothing in the Plan shall interfere with or limit in any way the right
of DBI to terminate any Employee's employment at any time, or confer upon any
Employee's any right to continue in the employ of DBI.
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7.6 The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Minnesota.
ARTICLE VIII.
AMENDMENT
8.1 DBI shall have the right at any time to amend the Plan by action of its
Board without obtaining the approval of the Stockholders of DBI, Any amendment
to the Plan shall be set forth in writing.
8.2 Notwithstanding anything to the contrary contained herein, the Board
shall not amend the Plan without obtaining the approval of the Stockholders if
such amendment:
(a) increases the number of shares of Common Stock that may be
granted as Restricted Stock under the Plan (other than
increases as a result of stock splits or stock dividends); or
(b) materially increases benefits accruing to participants
hereunder.
Any amendment of the Plan shall not, without the consent of a participant,
impair any rights or obligations with respect to any Restricted Stock previously
granted to the participant.
ARTICLE IX.
TERMINATION
DBI shall have the right at any time to terminate the Plan by action of its
Board without obtaining the approval of the Stockholders, provided however, that
termination of Ethiopian shall not affect the rights of Employees or
Non-Employee Directors under Restricted Stock previously granted to them and all
grants of Restricted Stock shall continue in force and operation after
termination of the Plan except as they may lapse or be terminated by their terms
and conditions.
ARTICLE X.
NOTICE
Any notice to DBI required under this Plan shall be in writing and shall be
sent by registered mail, return receipt requested, to the following address:
Digital Biometrics, Inc.
5600 Rowland Road
Minnetonka, MN 55343
Attention: President
ARTICLE XI
EFFECTIVE DATE
The Plan shall be effective as of October 1, 1992.
