AVANTGARB, LLC
2000 EQUITY INCENTIVE PLAN
1. Purpose. AvantGarb, LLC 2000 Equity Incentive Plan (the "Plan") is
intended to enhance the ability of AvantGarb, LLC, a California limited
liability company (the "Company"), to attract, retain and motivate key
executives, employees, directors and consultants of the Company, its parent, its
affiliates, joint ventures or subsidiaries, by providing such persons with an
opportunity to obtain a proprietary interest in the Company and by rewarding
them for their contribution to the Company. The Company believes that providing
such opportunities and rewards serves the best interests of the Company's
shareholders.
2. Definitions. As used herein:
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"Agreement" means the agreement described in Section 8 hereof.
"Award" means Options, Performance Shares, Stock Appreciation
Rights and Restricted Shares. -----
"Beneficiary" or "Beneficiaries" means the person or persons
designated by a Participant pursuant to the provisions of the Agreement to
receive payments or rights pursuant to such Agreement upon the Participant's
death. If no Beneficiary is so designated by a Participant or if no Beneficiary
is living at the time a payment is due pursuant to such Agreement, payments
shall be made to the estate of such Participant. The Agreement shall provide a
Participant with the right to change the designated Beneficiaries from time to
time by written instrument executed by the Participant and filed with the
Committee in accordance with such rules as may be specified by the Committee.
"Board" means the Board of Directors of the Company.
"Change of Control" has the meaning set forth in Section 14
hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder, as such law or regulations may be
amended from time to time.
"Committee" means the committee of the Board described in
Section 5 hereof.
"Common Stock" means (a) a member interest Unit in the company
or (b) a share of common stock of any successor corporation issuing common stock
into which the Company is merged or otherwise converted, in the course of which
member interest units are converted into shares of common stock or (c) such
other class or kind of shares or other securities as may be applicable under
Section 13 hereof.
"Effective Date" means the date described in Section 3 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such act, rules or
regulations may be amended from time to time.
"Fair Market Value" means the closing price of a share of
Common Stock on a specified date as reported in the official reporting entity
for the exchange or quotation system on which shares of Common Stock are listed
or traded for such date, or such other measurement of value as may be specified
by the Committee from time to time.
"Free-Standing Stock Appreciation Right" means a Stock
Appreciation Right not granted in tandem with an Option.
"Grant Date" means, with respect to any Award, the date
designated by the Committee as the date on which such Award was granted.
"Incentive Stock Option" means an Option which is qualified
as an incentive stock option under Section 422(b) of the Code.
"Initial Value" means the initial value, if any, of a
Free-Standing Stock Appreciation Right, as determined at the time of grant by
the Committee in its discretion and as set forth in the applicable Agreement;
provided, however, that the Initial Value of a Stock Appreciation Right shall be
no less than 100% of the Fair Market Value of a share of Common Stock as of the
Grant Date.
"Non-qualified Stock Option" means an Option which does not
qualify as an Incentive Stock Option.
"Option" means an option to purchase units or shares of Common
Stock, subject to the terms and conditions provided for in Section 9 hereof.
"Option Price" means the exercise price of an Option, as
determined at the time of grant by the Committee in its discretion and as set
forth in the applicable Agreement; provided, however, that the Option Price of
an Incentive Stock Option shall be no less than 100% of the Fair Market Value of
a share of Common Stock as of the Grant Date; and provided, further, that the
Option Price of any Incentive Stock Option shall be subject to the terms set
forth in Section 9(a)(iv) hereof.
"Participant" means a key employee, officer or director of, or
consultant to, the Company, its parent or one of its subsidiaries, joint
ventures or affiliates, who is designated by the Committee to receive an Award
under the Plan.
"Performance Goals" have the meaning set forth in Section 7
hereof. Performance Goals shall be objective and pre-established by the
Committee within the meaning of Section 162(m) of the Code.
"Performance Period" means a fixed period of time,
pre-established by the Committee, during which a Participant performs service
for the Company and during which Performance Goals may be achieved.
"Performance Share" means a right whose value is determined
with reference to attaining Performance Goals for a Performance Period or such
other measure as may be approved by the Committee, from time to time, and which
is paid in shares of Common Stock, cash or a combination thereof, as determined
by the Committee in its discretion, subject to the terms and conditions provided
for in Section 11 hereof.
"Plan" means the AvantGarb, LLC 2000 Equity Incentive Plan, as
the same may be amended, from time to time, in accordance with Section 15
hereof.
"Restricted Share" means a unit or share of Common Stock which
is restricted subject to the terms and conditions provided for in Section 12
hereof.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
"Stock Appreciation Right" or "SAR" means a right to receive
the appreciation, if any, in the Fair Market Value of one share of Common Stock,
subject to the terms and conditions provided for in Section 10 hereof.
"Tandem Stock Appreciation Right" means a Stock Appreciation
Right granted in tandem with an Option.
"Unit" means a member interest unit in a limited liability
company formed under applicable state corporate laws.
3. Effective Date. The Plan shall become effective on the date
("Effective Date") of its adoption by the Board. (Subject to approval of the
Plan by the stockholders of the Company. Prior to such stockholder approval, the
Committee may grant Awards conditioned on stockholder approval. If such
stockholder approval is not obtained by the first annual meeting of stockholders
to occur after the adoption of the Plan by the Board, the Plan and any Awards
made thereunder shall terminate ab initio and be of no further force and
effect.)
4. Maximum Number of Shares Available for Grant.
(a) Subject to adjustment pursuant to Section 13 hereof, the
maximum aggregate number of shares of Common Stock that may be used to settle
Awards made under the Plan shall not exceed 2,850,000 shares of Common Stock.
Notwithstanding the foregoing, any Awards that have been forfeited or canceled
or have expired without the relevant Participant having received value therefor,
such as the forfeiture of a Participant's unvested Options upon termination of
his/her service (an "Expired Award"), shall not be counted for purposes of
determining the number of shares of Common Stock issued or reduce the number of
Awards issuable in connection with Awards granted under the Plan. For purposes
of the immediately preceding sentence, neither (i) any Award tendered to the
Company or withheld by the Company to satisfy tax withholding requirements, nor
(ii) any Restricted Share that is forfeited, canceled or expired and with
respect to which a Participant received any dividends or "benefits of ownership"
(within the meaning of the rules under Section 16(b) of the Exchange Act), shall
be deemed an Expired Award.
(b) Shares of Common Stock issued under the Plan may be
authorized and unissued shares or issued and re-acquired shares, as the
Committee may from time to time determine.
5. Administration.
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(a) The Plan shall be administered by the Committee, which
shall be appointed by the Board and which shall consist of two or more members
of the Board. From and after the date that the Company has become subject to the
reporting requirements of the Exchange Act, each member of the Committee at all
times during service as a member of the Committee shall qualify with respect to
the Plan as a "Non-Employee Director" within the meaning of Rule 16b-3 under the
Exchange Act and as an "outside director" within the meaning of Section 162(m)
of the Code. The Committee shall have full power and authority to interpret and
construe the provisions of the Plan and of any Agreements under the Plan and
make determinations pursuant to any Plan provision or Agreement. Each
interpretation, determination or other action made or taken pursuant to the Plan
by the Committee shall be final, conclusive and binding on all persons.
(b) No member of the Committee shall be liable for anything
whatsoever in connection with the administration of the Plan except such
member's own willful misconduct. Under no circumstances shall any member of the
Committee be liable for any act or omission of any other member of the
Committee. In the performance of its functions with respect to the Plan, the
Committee shall be entitled to rely upon information and advice furnished by the
Company's officers, the Company's accountants, the Company's counsel and any
other party the Committee deems necessary, and no member of the Committee shall
be liable for any action taken or not taken in reliance upon any such advice.
6. Grant or Offer of Awards. The Committee shall, from time to time,
select and make grants of Awards or offers for the sale of Awards to
Participants.
7. Establishment of Performance Goals. Awards of Performance Shares
hereunder shall be based, and Awards of Restricted Shares hereunder may be based
(in the Committee's discretion), upon Performance Goals pre-established by the
Committee with respect to a Performance Period. The Performance Goals shall be
based on one or more of the following criteria to be attained by the Company (or
a subsidiary or division thereof): (i) total shareholder return, (ii) Fair
Market Value of a share of Common Stock, (iii) earnings before interest and
taxes, (iv) return on investment, (v) earnings per share, (vi) return on equity,
and (vii) earnings before interest, taxes, depreciation and amortization. The
Committee shall certify in writing that a Performance Goal has been attained
prior to payment of any Award based on such Performance Goal. Performance Goals
may be revised by the Committee, at such times as it deems appropriate during
the Performance Period, in order to take into consideration any unforeseen
events or changes in circumstances.
8. Agreement; Transferability of Awards.
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(a) Agreement. The terms and conditions of each grant of
Awards shall be embodied in a written agreement (the "Agreement") in a form
approved by the Committee and delivered to the Participant as soon as
practicable following the Grant Date. The Agreement shall contain terms and
conditions not inconsistent with the Plan and which shall incorporate the Plan
by reference. Each Agreement shall: (a) state the Grant Date of the Award, the
number of shares or units issuable in connection with the Award or the number of
Performance Shares, Free-Standing Stock Appreciation Rights or Restricted Shares
related to the Award, as the case may be, as well as the exercisability, payment
and other restrictions applicable to the Award, as determined by the Committee,
and (i) in the case of Options (and any related Tandem Stock Appreciation
Rights), the Option Price, (ii) in the case of Restricted Shares, the purchase
price, if any, for such Restricted Shares, or (iii) in the case of Free-Standing
Stock Appreciation Rights, the Initial Value thereof and the maximum number of
shares of Common Stock that may be issued in connection therewith; (b) specify
any applicable vesting schedule; (c) in the case of Options, state whether the
Option is intended to qualify as an Incentive Stock Option; (d) provide that
Restricted Shares shall only be transferable after they vest and that, subject
to Section 8(b) hereof, all other Awards shall not be transferable by the
Participant otherwise than by will or the laws of descent and distribution, by a
qualified legal representative in the event of disability or incompetence, or
pursuant to a qualified domestic relations order as such term is defined in the
Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder, and during the Participant's lifetime shall
only be exercisable by or paid to the Participant; (e) provide for the treatment
of Awards in the event of the termination of the Participant's employment; (f)
provide such other additional or alternative terms as may, in the Committee's
discretion, be advisable to comply with the exemptive relief provided by Rule
16b-3 under the Exchange Act; (g) provide such other terms and conditions, not
inconsistent with the Plan, as the Committee may deem advisable; and (h) be
signed by the recipient of the Award and a person designated by the Committee.
(b) Transferability. Notwithstanding Section 8(a) hereof, the
Committee may, subject to such terms and conditions as the Committee shall
specify, permit the transfer of an Award to a Participant's family members or to
one or more trusts, partnerships or corporations established in whole or in part
for the benefit of one or more of such family members; provided, further, that
the restrictions in this sentence shall not apply to shares of Common Stock
received in connection with an Award after the date that the restrictions on
transferability of such shares set forth in the applicable Agreement have
lapsed. During the lifetime of the Participant, an Option, Stock Appreciation
Right or similar-type of Award shall be exercisable only by the Participant or
by the family member or trust to whom such Option, Stock Appreciation Right or
other Award has been transferred in accordance with the previous sentence.
9. Terms of Options.
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(a) Terms of Options Generally. Options may be granted to any
Participant to purchase such number of units or shares of Common Stock and
having such terms as the Committee shall determine in exchange for payment of
the Option Price in cash, or, in the discretion of the Committee and to the
extent provided in the applicable Agreement, in units or shares of Common Stock
already owned by the Participant, through withholding of Common Stock subject to
the Option with a value equal to the exercise price, in other property
acceptable to the Committee or in any combination of cash, shares of Common
Stock or such other property, or such other manner of settlement of the Option
Price as the Committee shall determine. Options granted under the Plan shall
comply with the terms and conditions set forth in this Section 9.
(i) Vesting. Each Option shall vest and become
exercisable as determined by the Committee and as set forth in
the applicable Agreement.
(ii) Duration of Options. Each Option shall be
effective for such term as shall be determined by the
Committee and set forth in the Agreement; provided, however,
that no Option shall be exercisable beyond the tenth
anniversary of the Grant Date of such Option.
(iii) Exercise Price. The price at which shares of
Common Stock may be purchased under an Incentive Stock Option
shall not be less than 100% of the Fair Market Value of the
Common Stock on the Grant Date.
(iv) Incentive Stock Options Granted to Certain
Shareholders. No Incentive Stock Option may be issued pursuant
to the terms of the Plan to any individual who, at the time
the Option is granted, owns stock possessing more than 10% of
the total combined voting power of all classes of units or
stock of the Company or any of its subsidiaries, unless (A)
the Option Price determined as of the Grant Date is at least
110% of the Fair Market Value on the Grant Date of the units
or shares of Common Stock subject to such Option, and (B) the
Incentive Stock Option is not exercisable more than five years
from the Grant Date thereof.
(b) Effect of Exercise on Related Tandem Stock Appreciation
Rights. The exercise of an Option shall result in the cancellation of any
related Tandem Stock Appreciation Rights on a share-for-share basis.
(c) Limitation on Exercise. The Option shall not be
exercisable unless the offer and sale of the Common Stock subject to the Option
has been registered under the Securities Act, or the Company has determined that
an exemption from registration under the Securities Act (and applicable state
laws) is available and applicable to the offer and sale of the Common Stock
subject to the Option.
(d) Delivery of Certificate. As soon as practicable following
the exercise of an Option, a certificate in the Participant's name evidencing
the appropriate number of units or shares of Common Stock issued in connection
with such exercise shall be delivered to the Participant.
10. Terms of Stock Appreciation Rights.
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(a) Terms of Stock Appreciation Rights Generally. Each Stock
Appreciation Right granted under the Plan shall comply with the terms and
conditions set forth in this Section 10.
(i) Grants of Stock Appreciation Rights. Each Tandem
Stock Appreciation Right shall relate to a specific Option granted
under the Plan and in the case of Incentive Stock Options may be
granted only concurrently with the Option to which it relates. In the
case of Non-qualified Stock Options, Tandem Stock Appreciation Rights
may be granted at any time prior to the exercise, termination or
expiration of such Option. Free-Standing Stock Appreciation Rights may
be granted by the Committee at any time to any Participant.
(ii) Vesting, Exercise and Duration of Stock
Appreciation Rights. A Tandem Stock Appreciation Right shall be
exercisable by a Participant only at such times as the Option to which
it relates may be exercised, shall be forfeited when the related Option
is forfeited and may expire no later than the expiration of the related
Option. Each Free-Standing Stock Appreciation Right shall vest and
become exercisable as determined by the Committee and as set forth in
the applicable Agreement.
(iii) Value of Stock Appreciation Rights. A vested
Stock Appreciation Right shall entitle a Participant to receive from
the Company, upon exercise of the right, an amount (payable in the
manner described in Section 10(c) hereof) equal to the Fair Market
Value on the exercise date of the Stock Appreciation Right of the total
number of units or shares of Common Stock for which the Stock
Appreciation Right is exercised, less (A) in the case of Tandem Stock
Appreciation Rights, the Option Price that the Participant would have
otherwise been required to pay to purchase such units or shares had the
Option been exercised with respect to such units or shares, or (B) in
the case of a Free-Standing Stock Appreciation Right, the Initial
Value.
(iv) Number of Shares Covered by a Tandem Stock
Appreciation Right. In no case may the number of shares of Common Stock
covered by a Tandem Stock Appreciation Right exceed the number of units
or shares of Common Stock covered by the related Option.
(b) Effect of Exercise of Tandem Stock Appreciation Right on
Related Option. The exercise of a Tandem Stock Appreciation Right shall
automatically result in the cancellation of the related Option on a
unit-for-unit or share-for-share basis, and the shares of Common Stock which
were related to such Option shall not again be available for future grants or
sales of Awards.
(c) Payment. Payment to a Participant upon the exercise of a
Stock Appreciation Right shall be made as soon as practicable following such
exercise and, in the discretion of the Committee, may be made in cash, in units
or shares of Common Stock or a combination of cash and units or shares of Common
Stock; provided, however, that payment shall not be made in Common Stock unless
the Common Stock has been registered under the Securities Act, or the Company
has determined that an exemption under such Act is available and applicable to
such exercise and payment in Common Stock.
(d) Delivery of Certificate. As soon as practicable following
the exercise of a Stock Appreciation Right that is paid in whole or part in
Common Stock, a certificate evidencing the appropriate number of units or shares
of Common Stock issued in connection with such exercise shall be delivered to
the Participant.
11. Terms of Performance Shares.
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(a) Terms of Performance Shares Generally. Performance Shares
may be granted to any Participant. The Performance Shares granted hereunder
shall comply with the terms and conditions set forth in this Section 11.
(i) Measurement of Value of Performance Shares. A
vested Performance Share shall entitle the Participant to
receive from the Company, on such date as the Committee may
determine in its discretion and as set forth in the applicable
Agreement, the value of the number of units or shares of
Common Stock determined with reference to attaining
Performance Goals for a Performance Period as set forth in the
applicable Agreement.
(ii) Vesting. Each Performance Share shall vest as
determined by the Committee and as set forth in the applicable
Agreement, but in no event less than one year from the Grant
Date.
(b) Payment. Payment to a Participant with respect to a
Performance Share shall be made in the discretion of the Committee, in units or
shares of Common Stock, cash, or a combination of cash and units or shares of
Common Stock; provided, however, that payment shall not be made in units or
Common Stock unless the Common Stock has been registered under the Securities
Act in connection therewith, or the Company has determined that an exemption
under such Act is available and applicable to such exercise and payment in units
or Common Stock.
(c) Delivery of Certificate. Upon payment of a Performance
Share that is paid in whole or part in units or Common Stock, a certificate
evidencing the appropriate number of units or shares of Common Stock issued in
connection with such exercise shall be delivered to the Participant.
12. Terms of Restricted Shares.
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(a) Terms of Restricted Shares Generally. Restricted Shares
may be granted or offered for sale to any Participant, may be granted solely in
consideration for services rendered or to be rendered to the Company, or its
subsidiaries or affiliates, and may also be granted in substitution and exchange
for restricted property (within the meaning of Section 83 of the Code) held by a
Participant. If Restricted Shares are offered for sale hereunder, the purchase
price shall be payable in cash, or, in the discretion of the Committee and to
the extent provided in the applicable Agreement, in units or shares of Common
Stock already owned by the Participant, in promissory notes (which may be
recourse or non-recourse by the maker), in other property or in any combination
of cash, units or shares of Common Stock or such other property. The Restricted
Shares granted or offered for sale under the Plan shall comply with the terms
and conditions set forth in this Section 12.
(b) Purchase Price; Offering Period. Restricted Shares offered
for sale shall be sold at a purchase price determined at the time of offering by
the Committee in its discretion and as set forth in the applicable Agreement.
(c) Delivery of Certificate. At the time of grant or sale of
Restricted Shares to a Participant, a certificate evidencing the appropriate
number of units or shares of Common Stock granted or sold to the Participant as
Restricted Shares shall be issued in the Participant's name but shall be subject
to a substantial risk of forfeiture within the meaning of Section 83 of the Code
and shall be held by the Company for the account of the Participant until such
time as such Restricted Shares vest hereunder. Upon such vesting, the
certificate evidencing such shares shall be delivered to the Participant.
(d) Vesting. Each Restricted Share shall vest as determined by
the Committee and as set forth in the applicable Agreement. The vesting of each
Restricted Share which is subject to the attainment of Performance Goals for the
relevant Performance Period established by the Committee shall not vest in less
than one year.
13. Certain Adjustments.
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(a) Effect of Reorganization. Subject to the provisions of
Section 14 hereof, in the event that (i) the Company is merged or consolidated
with, or converted into, another corporation, (ii) all or substantially all the
assets of the Company are acquired by another corporation, person or entity,
(iii) the Company is reorganized, dissolved or liquidated, or (iv) the division
or subsidiary for which a Participant performs services is sold, merged,
consolidated, reorganized or liquidated (each such event in (i), (ii), (iii) or
(iv) being hereinafter referred to as a "Reorganization Event"), or (v) the
Board shall propose that the Company enter into a Reorganization Event, then the
Committee shall (A) make appropriate adjustment in the number and kind of units
or shares of Common Stock reserved for Awards that may be granted or offered
pursuant to the Plan, and (B) with respect to then outstanding Awards, make
appropriate adjustments to provide each Participant with a benefit substantially
equivalent to that which he/she would have been entitled to had such
Reorganization Event not occurred.
(b) Dilution and Other Adjustments. In the event of a stock
dividend, stock split, recapitalization, exchange of shares, warrants or rights
offering to purchase Common Stock at a price substantially below fair market
value or other similar event affecting the Common Stock or units, the Committee
shall adjust the number and kind of Common Stock or units reserved for Awards
that may be granted or offered pursuant to the Plan, and shall make any or all
of the following adjustments that in its discretion it deems necessary or
advisable to provide each Participant with a benefit equivalent to that to which
he/she would have been entitled had such event not occurred: (i) adjust the
number of Awards granted or offered to each Participant and the number of Awards
that may be granted or offered generally pursuant to the Plan, (ii) adjust the
Option Price of any Options and the Initial Value of any Stock Appreciation
Rights, and (iii) make any other adjustments, or take such action, as the
Committee, in its discretion, deems appropriate. Such adjustments shall be
conclusive and binding for all purposes. Unless otherwise determined by the
Committee, such adjustments shall be subject to the same vesting schedule and
restrictions to which the underlying Award is subject. No fractional shares of
Common Stock shall be reserved or authorized by any such adjustment. In the
event of a change in the Common Stock which is limited to a change in the
designation thereof to "Capital Stock" or other similar designation, or to a
change in the par value thereof, or from par value to no par value, without
increase or decrease in the number of issued shares, the shares resulting from
any such change shall be deemed to be Common Stock within the meaning of the
Plan.
14. Change of Control.
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(a) Notwithstanding any other provision of the Plan or any
Agreement, the Committee shall have the authority in its discretion to provide
for the accelerated vesting and/or payment of Awards (with or without regard to
the achievement of Performance Goals) in the event of a Change of Control or in
the event of a determination by the Committee that a Change of Control may
occur.
(b) For purposes of this Section 14, "Change of Control" means
that any of the following events shall have occurred:
(i) The Company is merged or consolidated or
reorganized into or with another corporation, person or
entity, and as a result of such merger, consolidation or
reorganization less than a majority of the combined voting
power of the then outstanding securities of such corporation,
person or entity immediately after such transaction are held
in the aggregate by the holders of Voting Stock (as that term
is hereafter defined) of the Company immediately prior to such
transaction;
(ii) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation,
person or entity, and less than a majority of the combined
voting power of the then-outstanding securities of such
corporation, person or entity immediately after such sale or
transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or
transfer;
(iii) There is a report filed on Schedule 13D or
Schedule 14D-1 of the Exchange Act by a person other than a
person that satisfies the requirements of Rule 13d-1(b)(1)
under the Exchange Act for filing such report on Schedule 13G,
which report as filed discloses that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 under the
Exchange Act) of securities representing 12.5% or more of the
combined voting power of the then-outstanding securities
entitled to vote generally in the election of Directors of the
Company ("Voting Stock");
(iv) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to the
Exchange Act disclosing in response to Form 8-K or Schedule
14A that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(v) If during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's stockholders,
of each Director of the Company first elected during such
period was approved by a vote of at least two-thirds of the
Directors of the Company then still in office who were
Directors of the Company at the beginning of any such period.
Notwithstanding the foregoing provisions of Clause (iii) or
(iv) hereof, a "Change of Control" shall not be deemed to have
occurred for purposes of the Plan solely because (x) the
Company, (y) an entity in which the Company directly or
indirectly beneficially owns 50% or more of the voting
securities, or (z) any Company-sponsored employee stock
ownership plan or any other employee benefit plan of the
Company (or any trustee of any such plan on its behalf),
either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule
14D-1, or Form 8-K or Schedule 14A under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of 12.5% or otherwise, or because the
Company reports that a Change of Control of the Company has or
may have occurred or will or may occur in the future by reason
of such beneficial ownership.
15. Amendment of the Plan. The Board may at any time and from time to
time modify, amend, suspend or terminate the Plan in whole or in part; provided,
however, that any amendment which is required by law (including the Code) or by
the rules of any stock exchange upon which shares of Common Stock are traded
which require shareholder approval thereof shall not be effective unless and
until such shareholder approval has been obtained in compliance with such rule
or law. No termination, modification or amendment of the Plan may, without the
consent of the Participant to whom an Award has been granted, adversely affect
the rights of such Participant under such Award.
16. Termination. Unless previously terminated pursuant to Section 15
hereof, the Plan shall terminate on the fifth anniversary of the Effective Date,
and no further Awards may be granted hereunder after such date. Awards then
outstanding may continue to be exercised, vest or be paid in accordance with
their terms.
17. Use of Proceeds. The proceeds received by the Company from the sale
of Common Stock or units pursuant to the sale or exercise of Awards under the
Plan shall be added to the Company's general funds and used for general
corporate purposes.
18. Miscellaneous.
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(a) No Rights to Grants or Continued Service. Except as
expressly provided for in the Plan, no Participant shall have any claim or right
to be granted an Award under the Plan, nor shall any Participant have a right to
receive payment of an Award in any form other than as the Committee shall
approve. Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ or service of the
Company.
(b) No Restriction on Right of Company to Effect Corporate
Changes. Nothing in the Plan shall affect the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock,
units, options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or exchangeable
for Common Stock, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
(c) Governing Law. The Plan, and all agreements entered into under the
Plan shall be construed in accordance with and governed by the internal laws of
the State of Delaware.
(d) Withholding. As a condition to the making of any Award, the vesting
or payment of any Award or the lapse of the restrictions pertaining thereto, the
Company may, in the discretion of the Committee, require the Participant to pay
such sum to the Company as may be necessary to discharge the Company's
obligations with respect to any taxes, assessments or other governmental charges
imposed on property or income received by a Participant pursuant to the Plan. In
the discretion of the Committee, such payment may be in the form of cash or
other property. In the discretion of the Committee, the Company may make
available for delivery a lesser number of units or shares, in satisfaction of
such taxes, assessments or other governmental charges. At the discretion of the
Committee, the Company may deduct or withhold from any payment or distribution
to a Participant whether or not pursuant to the Plan. In the discretion of the
Committee, the Company may offer loans to Participants to satisfy withholding
requirements on such terms as the Committee may determine, which loans may be
non-interest bearing.
(e) Equity Holder Rights. A Participant shall not have any dividend,
voting or other equity holder rights by reason of any Award prior to the
Participant becoming the record holder on the books of the Company of units or
shares of Common Stock pursuant to such Award, and no adjustment shall be made
for dividends or distributions or other rights in respect of any unit or share
for which the record date is prior to the date upon which the Participant shall
become the holder of record thereof; provided, however, that a Participant shall
have all rights of an equity holder as to any Restricted Shares sold or granted
to him/her (except for any applicable risk of forfeiture and restrictions on
transferability), including the right to receive dividends and the right to vote
for directors and upon other matters in accordance with the Company's
Certificate of Incorporation or other organizing documents; and provided,
further, that the Participant shall not have the right to transfer, sell,
hypothecate, pledge or otherwise alienate any unvested Restricted Shares.
(f) Headings. The headings of Sections herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.
OPTION AWARD AGREEMENT ("Agreement") dated as of _____________, between
AVANTGARB, LLC, a California limited liability company (the "Company"), and the
other party signatory hereto (the "Participant").
WHEREAS, the Participant is a key executive, employee, director or
consultant of the Company or one of its subsidiaries, joint ventures or
affiliates and, upon the terms and subject to the conditions hereinafter set
forth, the Company desires to provide the Participant with an incentive to
remain in its employ and to increase Participant's interest in the success of
the Company by granting Participant the option awards herein described (the
"Awards") pursuant to the Company's 2000 Equity Incentive Plan (the "Plan");
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Incorporation of Plan; Definitions.
----------------------------------
Awards granted hereunder are subject in their entirety to the terms and
conditions of the Plan, which are incorporated herein by reference. The terms
used in this Agreement that are not defined herein shall have the definitions
assigned to them in the Plan.
2. Options.
----------------
(a) Grant of Options. The Company hereby grants to the
Participant, effective as of the date hereof (the "Grant Date"),
options (the "Options") to purchase the number of Units or shares of
Common Stock of the Company specified on Exhibit A hereof, such Options
to be exercisable at the exercise price per share (the "Option Price")
set forth on Exhibit A. The Units or shares issuable upon exercise of
Options are hereinafter referred to as the "Option Shares".
(b) Vesting. The Options shall vest and become exercisable on
the date or dates set forth on Exhibit A hereto (the "Vesting Date"),
unless previously vested, forfeited or adjusted in accordance with the
provisions of Section 7 or 8 hereof. The Options shall not be
exercisable following the date which shall be the tenth anniversary of
the Grant Date (the "Option Term").
(c) Exercise of Options; Restrictions on Stock Purchased.
(i) Notice. Subject to the conditions set forth
below, the Participant may exercise all or any portion of the
Options (to the extent vested) by giving written notice to the
Company's Director of Benefits or Director of Compensation and
Benefits. The date of exercise of the Options with respect to
the number of Units or shares of Common Stock specified in the
notice shall be the date on which the conditions provided in
paragraph (ii) below and Sections 3 and 6 herein are
satisfied.
(ii) Payment. Prior to the delivery to the
Participant of a certificate evidencing Units or shares of
Common Stock in respect of which all or a portion of the
Options shall have been exercised [which certificate shall
bear a legend evidencing such limitations on transfer, if any,
as may be applicable to such Units or shares (a
"Certificate")], the Participant shall have paid to the
Company the Option Price of all Units or shares of Common
Stock purchased pursuant to such exercise of the Options in
cash or via a broker-assisted cashless exercise transaction,
or, with the consent of the Committee (which consent shall be
granted in the sole discretion of the Committee), in Units or
shares of Common Stock already owned by the Participant
(valued at the then Fair Market Value), through withholding of
Common Stock subject to the Option with a value equal to the
exercise price, in other property acceptable to the Committee
or in any combination of cash, Units or shares of Common Stock
or such other property, or such other manner of settlement of
the Option Price as the Committee shall determine.
(iii) Other Provisions. Notwithstanding the
foregoing, the Committee may also permit the exercise of
Options through such other procedures as the Committee shall
in its discretion approve.
(d) Status of Options. The Options granted hereby are not
intended to qualify as Incentive Stock Options.
3. Registration of Shares.
----------------------
No Award which is exercisable or payable in shares of Common Stock and
granted under this Agreement shall be exercisable or payable, nor shall any
shares of Common Stock be issued pursuant to the exercise or vesting of any
Award granted under this Agreement, unless the shares of Common Stock subject to
such Award have been registered under the Securities Act or the Company has
determined that an exemption from registration under the Securities Act is
available and applicable.
4. Restrictions on Transfer.
------------------------
Subject to Section 8(b) of the Plan, Options shall not be transferable
prior to vesting other than to trusts established by the Participant for the
benefit of the Participant or a member of the Participant's immediate family, by
will or the laws of descent and distribution, by a qualified legal
representative in the event of disability or incompetence, or pursuant to a
qualified domestic relations order as defined in the Code and Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules thereunder.
5. Rights as a Stockholder.
-----------------------
(a) Stockholder Rights. The Participant shall have no rights
as a member or stockholder with respect to any Units or shares of
Common Stock issuable hereunder until a certificate or certificates
evidencing such Units or shares shall have been issued to or in the
name of the Participant, and no adjustment shall be made for dividends
or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall
become the holder of record thereof. With respect to Units or shares so
issued to or in the name of the Participant, the Participant shall have
all rights of a holder of Common Stock as to such Units or shares,
including the right to receive dividends and the right to vote in
accordance with the Company's Operating Agreement or Certificate of
Incorporation.
(b) Dividends and Distributions. Any Units or shares of Common
Stock received by the Participant as a result of a stock dividend on
the Units or shares issued hereunder or a stock distribution to
Participant as the holder of such Units or shares shall be subject to
the same restrictions as the Units or shares issued hereunder and all
references to shares issued hereunder shall be deemed to include such
additional Units or shares of Common Stock.
6. Withholding of Taxes.
--------------------
The Company and its subsidiaries shall have the right, before a
certificate for any Units or shares of Common Stock is delivered to the
Participant, to require the Participant in connection with any Award to remit to
the Company or the applicable subsidiary employer an amount sufficient to
satisfy any Federal, state or local tax withholding requirements. Prior to the
determination by the Company or its subsidiary of such withholding liability,
such individual may make an irrevocable election to satisfy, in whole or in
part, such obligation to remit taxes by directing the Company to withhold Units
or shares of Common Stock that would otherwise be received by the Participant.
Such election may be denied by the Committee in its discretion or may be made
subject to certain conditions specified by the Committee, including, without
limitation, conditions intended to avoid the imposition of liability against the
Participant under Section 16(b) of the Exchange Act. In addition, in the
discretion of the Committee, the Company may make available for delivery a
lesser number of Units or shares, in satisfaction of such taxes, assessments or
other governmental charges. At the discretion of the Committee, the Participant
acknowledges that the Company may deduct or withhold amounts owing with respect
to taxes under this Award from any payment or distribution to Participant
whether or not pursuant to the Plan.
7. Consequences of Termination of Employment.
-----------------------------------------
(a) Termination of Employment Defined. For purposes of this
Award and the Plan, the employment of the Participant shall be deemed
terminated if the Participant is no longer serving as a consultant or
director of, or employed as a salaried employee by, the Company or any
of its subsidiaries, joint ventures or affiliates.
(b) Death, Retirement or Permanent Disability; Change of
Control. If termination is without Cause or the Participant terminates
voluntarily for Good Reason and such termination, in either case, takes
place within two years after the occurrence of a Change of Control or
if termination occurs by reason of death, Retirement or Permanent
Disability and such termination occurs prior to the Vesting Date of the
Participant's Options, all of the unvested Options shall vest and
become exercisable immediately upon the effectiveness of such
termination. All vested Options shall be exercisable for the period of
one year following any termination by reason of death, three years
following any termination after a Change of Control described in this
paragraph (b), and the shorter of five years or the remainder of the
Option Term following Permanent Disability or Retirement, and, if not
so exercised, shall expire.
(c) Termination For or Without Cause; Voluntary Termination
With or Without Good Reason; Forfeiture in Event of Certain Activities.
If the Participant's service or employment is terminated for or without
Cause or if the Participant voluntarily terminates employment with or
without Good Reason (and any such termination does not occur within two
years after a Change of Control), or if Participant engages in certain
activities described below, then the following shall result; provided,
however, that the Committee may, in its sole discretion, accelerate the
vesting of any Awards (and payment thereunder) which would otherwise be
forfeited as described below:
(i) If such termination occurs prior to the date that
an Option (or any portion thereof) has become vested, the
unvested portion of such Option shall be deemed cancelled as
of the date of such termination without payment therefor and
the Company shall have no further obligation with respect
thereto.
(ii) If such termination is a voluntary termination
without Good Reason and occurs on or following the date an
Option (or any portion thereof) has become vested, vested
Options then outstanding shall continue to remain outstanding
and be subject to the applicable provisions of the Plan,
except that such Options must be exercised during the shorter
of the 90-day period following such termination or the
remainder of the Option Term.
(iii) If termination is without Cause or if the
Participant voluntarily terminates with Good Reason and such
termination occurs on or following the date an Option (or any
portion thereof) has become vested, vested Options then
outstanding shall continue to remain outstanding and be
subject to the applicable provisions of the Plan and this
Agreement, except that such Options must be exercised within
the shorter of three years following such termination or the
remainder of the Option Term.
(iv) If at any time during the period ending one year
after the last date the Option Award hereunder is exercisable
under the terms of this Agreement, Participant is terminated
for Cause or engages in any activity in competition with any
activity of the Company, or any activity inimical, contrary or
harmful to the interests of the Company as determined by the
Committee, including, but not limited to (a) conduct related
to Participant's employment, for which either criminal or
civil penalties against Participant could be sought, (b)
violation of Company policies, including, without limitation,
a knowing violation of the Company's insider trading policy,
(c) within the one-year period following termination of
employment with the Company, accepting employment with or
serving as a consultant, advisor or in any other capacity to a
person or entity (including self-employment or ownership) that
is in competition with or acting against the interests of the
Company, including employing or recruiting any present, former
or future employee of the Company, (d) disclosing or misusing
any confidential or proprietary information or material
concerning the Company, or (e) participating in, or assisting,
a hostile takeover attempt of the Company, then (1) this
Option Award shall terminate effective as of the date on which
Participant first enters into such activity (the "Forfeiture
Date"), unless terminated sooner by operation of another term
or condition of this Agreement or the Plan, and (2) any gain
(the difference between the exercise price and the fair market
value of one Unit or share of Common Stock on the date of
exercise, times the number of Options exercised) realized from
exercising all or a portion of any Option Award within the
one-year period immediately preceding the Forfeiture Date,
shall be immediately paid by Participant to the Company
(irrespective of subsequent market increase or decrease).
(d) By accepting this Agreement, Participant consents to a
deduction from any amounts the Company owes Participant from time to
time (including amounts owed as wages or other compensation, fringe
benefits or vacation pay, as well as any other amounts owed to
Participant by the Company), to the extent of the amounts Participant
owes the Company under paragraph (c)(iv) above. Whether the Company
elects to make any deduction or set-off in whole or in part, if the
Company does not recover by means of deduction or set-off the full
amount owed it, calculated as set forth above, Participant agrees to
pay immediately the unpaid balance to the Company.
(e) Definitions. For purposes of this Section 7, the following
definitions shall be applicable:
(i) A termination for "Cause" means a termination of
service or employment with the Company or any of the Company's
subsidiaries or joint ventures which, as determined by the
Committee, is by reason of (x) the commission by the
Participant of a felony or a perpetration by the Participant
of a dishonest act, material misrepresentation or common law
fraud against the Company or any subsidiary, joint venture or
other affiliate thereof, (y) any other act or omission which
is injurious to the financial condition or business reputation
of the Company or any subsidiary, joint venture or other
affiliate thereof, or (z) the willful failure or refusal of
the Participant to substantially perform the material duties
of the Participant's position with the Company or any of the
Company's subsidiaries, joint ventures or affiliates;
(ii) "Good Reason" means, with respect to the
Participant, (x) "good reason" as defined in an employment
agreement applicable to the Participant, or (y) if the
Participant does not have an employment agreement that defines
"good reason", (A) a failure to promptly pay compensation due
and payable to the Participant in connection with his or her
employment, (B) a material adverse change in the Participant's
position with the Company or any of the Company's
subsidiaries, joint ventures or affiliates, or (C) the
assignment to the Participant of duties materially and
adversely inconsistent with the Participant's position at the
time of such assignment with the Company or any of the
Company's subsidiaries, joint ventures or other affiliates;
(iii) "Permanent Disability" shall be defined in the
same manner as such term or a similar term is defined in the
long-term disability policy maintained by the Company or any
of the Company's subsidiaries or joint ventures for the
Participant and in effect on the date of the Participant's
termination of employment with the Company or any of the
Company's subsidiaries, joint ventures or other affiliates;
provided, however, that the relevant condition must continue
for six consecutive months before being deemed a "Permanent
Disability"; and
(iv) "Retirement" means resignation or termination of
employment after attainment of the Participant's sixty-fifth
birthday, unless the Committee determines otherwise in its
sole discretion.
(f) Neither the conversion of AvantGarb, LLC into Nano-Tex,
Inc., a Delaware corporation, nor any subsequent public offering of the
shares of Nano-Tex, Inc. shall constitute a Change of Control for
purposes of this Agreement.
8. Certain Adjustments; Disputes.
-----------------------------
(a) Effect of Reorganization. Subject to the provisions of
Section 7 hereof, in the event that (i) the Company is merged or
consolidated with another corporation, (ii) all or substantially all
the assets of the Company are acquired by another corporation, person
or entity, (iii) the Company is reorganized, dissolved or liquidated,
or (iv) the division or subsidiary for which the Participant performs
services is sold, merged, consolidated, reorganized or liquidated (each
such event in (i), (ii), (iii), or (iv) being hereinafter referred to
as a "Reorganization Event"), or (v) the Board shall propose that the
Company enter into a Reorganization Event, then the Committee shall
make adjustments to provide each Participant with a benefit equivalent
to that to which the Participant would have been entitled had such
Reorganization Event not occurred.
(b) Dilution and other Adjustments. In the event of a stock
dividend, stock split, recapitalization, exchange of shares, warrants
or rights offering to purchase Common Stock at a price substantially
below fair market value or other similar event affecting the Common
Stock, the Committee shall make any or all of the following adjustments
that in its discretion it deems necessary or advisable to provide the
Participant with a benefit equivalent to that to which Participant
would have been entitled had such event not occurred: (i) adjust the
number of Awards granted to the Participant, (ii) adjust the Option
Price of any Options, and (iii) make any other adjustments, or take
such action, as the Committee, in its discretion, deems appropriate.
Such adjustments shall be conclusive and binding for all purposes.
(c) Disputes. The Committee's authority to interpret and
construe the Plan and this Agreement, and resolve any dispute
hereunder, shall be final, conclusive and binding on all persons.
9. Amendment of this Agreement.
---------------------------
This Agreement may be amended only by a writing signed by both parties.
10. Miscellaneous.
-------------
(a) No Rights to Grants or Continued Service. Except as
expressly provided for herein, the Participant shall have no claim or
right to be granted an Award under the Plan, nor shall Participant have
a right to receive payment of an Award in any form other than as the
Committee shall approve. Neither the Plan nor any action taken
hereunder shall be construed as giving the Participant any right to be
retained in the employ or service of the Company.
(b) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of
Delaware.
(c) Binding Obligation; Survival; Assignment. The Participant
hereby represents that this Agreement has been duly executed and
delivered by the Participant and constitutes a legal, valid and binding
obligation of the Participant, enforceable against the Participant in
accordance with its terms.
(d) Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by
certified or registered mail, return receipt requested, postage
prepaid, addressed, if to the Participant, to his or her attention at
the mailing address set forth at the foot of this Agreement (or to such
other address as shall have been specified to the Company in writing)
and, if to the Company, to it at 3330 West Friendly Avenue, Greensboro,
North Carolina 27410, Attention: Corporate Secretary. All such notices
shall be conclusively deemed to be received and shall be effective, if
sent by hand delivery, upon receipt, or if sent by registered or
certified mail, on the fifth day after the day on which such notice is
mailed.
(e) Other Matters. This Agreement and the other related
agreements expressly referred to herein set forth the entire agreement
and understanding between the parties hereto and supersede all prior
agreements and understandings relating to the subject matter hereof.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same agreement. The headings of
sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of
this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Participant has executed this
Agreement, both as of the date and year first above written.
AVANTGARB, LLC PARTICIPANT
By___________________________ _____________________________
Name: Name:
Title: Address:
RESTRICTED SHARE AWARD AGREEMENT ("Agreement") dated as of
_____________, between AVANTGARB, LLC, a California limited liability company
(the "Company"), and the other party signatory hereto (the "Participant").
WHEREAS, the Participant is a key executive, employee, director or
consultant of the Company or one of its subsidiaries, joint ventures or
affiliates and, upon the terms and subject to the conditions hereinafter set
forth, the Company desires to provide the Participant with an incentive to
remain in its employ and to increase Participant's interest in the success of
the Company by granting Participant the restricted share awards herein described
(the "Awards") pursuant to the Company's 2000 Equity Incentive Plan (the
"Plan");
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Incorporation of Plan; Definitions.
----------------------------------
Awards granted hereunder are subject in their entirety to the terms and
conditions of the Plan, which are incorporated herein by reference. The terms
used in this Agreement that are not defined herein shall have the definitions
assigned to them in the Plan.
2. Restricted Shares.
(a) Grant of Restricted Shares. The Company hereby grants to
the Participant the number of Units ("Restricted Shares") specified on
attached Exhibit A hereof. Such grant shall be effective as of the date
hereof (the "Share Grant Date").
(b) Certificate. One or more Certificates evidencing the
Restricted Shares is being issued in the Participant's name and shall
be held by the Company for the account of the Participant until such
time as such Restricted Shares vest hereunder. Upon such vesting (and
upon satisfaction of any obligation with respect to withholding taxes),
the Certificate representing such shares shall be delivered to the
Participant.
(b) Vesting. The Restricted Shares granted hereunder shall become
nonforfeitable on the Vesting Date or Dates set forth on Exhibit A
hereto, unless previously vested, forfeited or adjusted in accordance
with the provisions of Section 7 or 8 hereof.
3. Registration of Shares.
----------------------
No Award which is exercisable or payable in shares of Common Stock and
granted under this Agreement shall be exercisable or payable, nor shall any
shares of Common Stock be issued pursuant to the exercise or vesting of any
Award granted under this Agreement, unless the shares of Common Stock subject to
such Award have been registered under the Securities Act or the Company has
determined that an exemption from registration under the Securities Act is
available and applicable.
4. Restrictions on Transfer.
------------------------
Subject to Section 8(b) of the Plan, Restricted Shares shall not be
transferable prior to vesting other than to trusts established by the
Participant for the benefit of the Participant or an immediate family member of
the Participant, by will or the laws of descent and distribution, by a qualified
legal representative in the event of disability or incompetence, or pursuant to
a qualified domestic relations order as defined in the Code and Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules thereunder.
5. Rights as a Stockholder.
-----------------------
(a) Stockholder Rights. Other than as provided herein and in
the Plan, the Participant shall have all rights of a holder of Common
Stock as to the Restricted Shares, including the right to receive
dividends and the right to vote in accordance with the Company's
Operating Agreement or Certificate of Incorporation.
(b) Dividends and Distributions. Any Units or shares of Common
Stock received by the Participant as a result of a stock dividend on
the Restricted Shares issued hereunder or a stock distribution to
Participant as the holder of such Restricted Shares shall be subject to
the same restrictions as the Restricted Shares issued hereunder and all
references to Restricted Shares issued hereunder shall be deemed to
include such additional Units or shares of Common Stock.
6. Withholding of Taxes.
--------------------
The Company and its subsidiaries shall have the right, before a
certificate for any Units or shares of Common Stock is delivered to the
Participant, to require the Participant in connection with any Award to remit to
the Company or the applicable subsidiary employer an amount sufficient to
satisfy any Federal, state or local tax withholding requirements. Prior to the
determination by the Company or its subsidiary of such withholding liability,
such individual may make an irrevocable election to satisfy, in whole or in
part, such obligation to remit taxes by directing the Company to withhold Units
or shares of Common Stock that would otherwise be received by the Participant.
Such election may be denied by the Committee in its discretion or may be made
subject to certain conditions specified by the Committee, including, without
limitation, conditions intended to avoid the imposition of liability against the
Participant under Section 16(b) of the Exchange Act. In addition, in the
discretion of the Committee, the Company may make available for delivery a
lesser number of Units or shares, in satisfaction of such taxes, assessments or
other governmental charges. At the discretion of the Committee, the Participant
acknowledges that the Company may deduct or withhold amounts owing with respect
to taxes under this Award from any payment or distribution to Participant
whether or not pursuant to the Plan.
7. Consequences of Termination of Employment.
-----------------------------------------
(a) Termination of Employment Defined. For purposes of this
Award and the Plan, the employment of the Participant shall be deemed
terminated if the Participant is no longer serving as a consultant or
director of, or employed as a salaried employee by, the Company or any
of its subsidiaries, joint ventures or affiliates.
(b) Death, Retirement or Permanent Disability; Change of
Control. If termination occurs prior to the Vesting Date of the
Participant's Restricted Shares and is without Cause or the Participant
terminates voluntarily for Good Reason, and such termination, in either
case, takes place within two years after the occurrence of a Change of
Control, or if termination occurs by reason of death, Retirement or
Permanent Disability, all of the unvested Restricted Shares shall vest
immediately upon the effectiveness of such termination.
(c) Termination For or Without Cause; Voluntary Termination
With or Without Good Reason; Forfeiture in Event of Certain Activities.
If the Participant's employment is terminated for or without Cause or
if the Participant voluntarily terminates employment with or without
Good Reason (and any such termination does not occur within two years
after a Change of Control), or if Participant engages in certain
activities described below, then the following shall result; provided,
however, that the Committee may, in its sole discretion, accelerate the
vesting of any Awards (and payment thereunder) which would otherwise be
forfeited as described below:
(i) If such termination is without Cause or the
Participant voluntarily terminates with Good Reason, a pro
rata portion of the unvested Restricted Shares (determined on
the basis of the number of full months of employment completed
prior to the date of termination during the period beginning
on the Grant Date and ending on the Vesting Date) shall vest
and be paid to the Participant immediately. Any portion of the
Restricted Shares which are not vested after application of
this clause (i) shall be deemed cancelled as of the date of
such termination, and the Company shall have no further
obligation with respect thereto.
(ii) If such termination is for Cause or the
Participant voluntarily terminates without Good Reason, any
unvested Restricted Shares shall be deemed cancelled as of the
date of such termination and the Company shall have no further
obligation with respect thereto.
(iii) If at any time during the period ending one
year after the Vesting Date of any award of Restricted Stock
hereunder, Participant is terminated for Cause or engages in
any activity in competition with any activity of the Company,
or any activity inimical, contrary or harmful to the interests
of the Company as determined by the Committee, including, but
not limited to (a) conduct related to Participant's
employment, for which either criminal or civil penalties
against Participant could be sought, (b) violation of Company
policies, including, without limitation, a knowing violation
of the Company's insider trading policy, (c) within the
one-year period following termination of employment with the
Company, accepting employment with or serving as a consultant,
advisor or in any other capacity to a person or entity
(including self-employment or ownership) that is in
competition with or acting against the interests of the
Company, including employing or recruiting any present, former
or future employee of the Company, (d) disclosing or misusing
any confidential or proprietary information or material
concerning the Company, or (e) participating in, or assisting,
a hostile takeover attempt of the Company, then (1) this
Restricted Stock Award shall terminate effective as of the
date on which Participant first enters into such activity (the
"Forfeiture Date"), unless terminated sooner by operation of
another term or condition of this Agreement or the Plan, and
(2) any gain (the difference between the fair market value of
one Unit or share of Common Stock on the date of grant and the
fair market value on the Vesting Date, times the number of
Restricted Shares issued) realized from the vesting of all or
a portion of any Restricted Share Award within the one-year
period immediately preceding the Forfeiture Date, shall be
immediately paid by Participant to the Company (irrespective
of subsequent market increase or decrease).
(d) By accepting this Agreement, Participant consents to a
deduction from any amounts the Company owes Participant from time to
time (including amounts owed as wages or other compensation, fringe
benefits or vacation pay, as well as any other amounts owed to
Participant by the Company), to the extent of the amounts Participant
owes the Company under paragraph (iii) above. Whether the Company
elects to make any deduction or set-off in whole or in part, if the
Company does not recover by means of deduction or set-off the full
amount owed it, calculated as set forth above, Participant agrees to
pay immediately the unpaid balance to the Company.
(e) Definitions. For purposes of this Section 7, the following
definitions shall be applicable:
(i) A termination for "Cause" means a termination of
service or employment with the Company or any of the Company's
subsidiaries or joint ventures which, as determined by the
Committee, is by reason of (x) the commission by the
Participant of a felony or a perpetration by the Participant
of a dishonest act, material misrepresentation or common law
fraud against the Company or any subsidiary, joint venture or
other affiliate thereof, (y) any other act or omission which
is injurious to the financial condition or business reputation
of the Company or any subsidiary, joint venture or other
affiliate thereof, or (z) the willful failure or refusal of
the Participant to substantially perform the material duties
of the Participant's position with the Company or any of the
Company's subsidiaries, joint ventures or affiliates;
(ii) "Good Reason" means, with respect to the
Participant, (x) "good reason" as defined in an employment
agreement applicable to the Participant, or (y) if the
Participant does not have an employment agreement that defines
"good reason", (A) a failure to promptly pay compensation due
and payable to the Participant in connection with his or her
employment, (B) a material adverse change in the Participant's
position with the Company or any of the Company's
subsidiaries, joint ventures or affiliates, or (C) the
assignment to the Participant of duties materially and
adversely inconsistent with the Participant's position at the
time of such assignment with the Company or any of the
Company's subsidiaries, joint ventures or other affiliates;
(iii) "Permanent Disability" shall be defined in the
same manner as such term or a similar term is defined in the
long-term disability policy maintained by the Company or any
of the Company's subsidiaries or joint ventures for the
Participant and in effect on the date of the Participant's
termination of employment with the Company or any of the
Company's subsidiaries, joint ventures or other affiliates;
provided, however, that the relevant condition must continue
for six consecutive months before being deemed a "Permanent
Disability"; and
(iv) "Retirement" means resignation or termination of
employment after attainment of the Participant's sixty-fifth
birthday, unless the Committee determines otherwise in its
sole discretion.
(f) Neither the conversion of AvantGarb, LLC into Nano-Tex,
Inc., a Delaware corporation, nor any subsequent public offering of the
shares of Nano-Tex, Inc. shall constitute a Change of Control for
purposes of this Agreement.
8. Certain Adjustments; Disputes.
-----------------------------
(a) Effect of Reorganization. Subject to the provisions of
Section 7 hereof, in the event that (i) the Company is merged or
consolidated with another corporation, (ii) all or substantially all
the assets of the Company are acquired by another corporation, person
or entity, (iii) the Company is reorganized, dissolved or liquidated,
or (iv) the division or subsidiary for which the Participant performs
services is sold, merged, consolidated, reorganized or liquidated (each
such event in (i), (ii), (iii), or (iv) being hereinafter referred to
as a "Reorganization Event"), or (v) the Board shall propose that the
Company enter into a Reorganization Event, then the Committee shall
make adjustments to provide each Participant with a benefit equivalent
to that to which the Participant would have been entitled had such
Reorganization Event not occurred.
(b) Dilution and other Adjustments. In the event of a stock
dividend, stock split, recapitalization, exchange of shares, warrants
or rights offering to purchase Common Stock at a price substantially
below fair market value or other similar event affecting the Common
Stock, the Committee shall make any or all of the following adjustments
that in its discretion it deems necessary or advisable to provide the
Participant with a benefit equivalent to that to which Participant
would have been entitled had such event not occurred: (i) adjust the
number of Awards granted to the Participant, and (ii) make any other
adjustments, or take such action, as the Committee, in its discretion,
deems appropriate. Such adjustments shall be conclusive and binding for
all purposes.
(c) Disputes. The Committee's authority to interpret and
construe the Plan and this Agreement, and resolve any dispute
hereunder, shall be final, conclusive and binding on all persons.
9. Amendment of this Agreement.
---------------------------
This Agreement may be amended only by a writing signed by both parties.
10. Miscellaneous.
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(a) No Rights to Grants or Continued Service. Except as
expressly provided for herein, the Participant shall have no claim or
right to be granted an Award under the Plan, nor shall Participant have
a right to receive payment of an Award in any form other than as the
Committee shall approve. Neither the Plan nor any action taken
hereunder shall be construed as giving the Participant any right to be
retained in the employ or service of the Company.
(b) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of
Delaware.
(c) Binding Obligation; Survival; Assignment. The Participant
hereby represents that this Agreement has been duly executed and
delivered by the Participant and constitutes a legal, valid and binding
obligation of the Participant, enforceable against the Participant in
accordance with its terms.
(d) Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by
certified or registered mail, return receipt requested, postage
prepaid, addressed, if to the Participant, to his or her attention at
the mailing address set forth at the foot of this Agreement (or to such
other address as shall have been specified to the Company in writing)
and, if to the Company, to it at 3330 West Friendly Avenue, Greensboro,
North Carolina 27410, Attention: Corporate Secretary. All such notices
shall be conclusively deemed to be received and shall be effective, if
sent by hand delivery, upon receipt, or if sent by registered or
certified mail, on the fifth day after the day on which such notice is
mailed.
(e) Other Matters. This Agreement and the other related
agreements expressly referred to herein set forth the entire agreement
and understanding between the parties hereto and supersede all prior
agreements and understandings relating to the subject matter hereof.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same agreement. The headings of
sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of
this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Participant has executed this
Agreement, both as of the date and year first above written.
AVANTGARB, LLC PARTICIPANT
By______________________________ _______________________________
Name: Name:
Title: Address:
