EXHIBIT 10.40
UNIROYAL TECHNOLOGY CORPORATION
1994 STOCK OPTION PLAN, AS AMENDED
TO MAY 19, 2000, AND RESTATED
I. PURPOSE
Uniroyal Technology Corporation, a Delaware corporation (the
"Company"), desires to afford certain of its key employees and certain key
employees of any subsidiary corporation or parent corporation of the Company now
existing or hereafter formed or acquired who are responsible for the continued
growth of the Company an opportunity to acquire a proprietary interest in the
Company, and thus to create in such key employees an increased interest in and a
greater concern for the welfare of the Company and its subsidiaries.
The stock options ("Options") offered pursuant to this 1994
Stock Option Plan (the "Plan") are a matter of separate inducement and are not
in lieu of any salary or other compensation for the services of any key
employee.
The Company, by means of the Plan, seeks to retain the
services of persons now holding key positions and to secure and retain the
services of persons capable of filling such positions.
The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not meet the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
Up to 5,250,000 shares of Common Stock $.01 per value per
share ("Shares"), may be granted and outstanding under the Plan, provided that
the total number of Shares of the Company which may be purchased pursuant to the
exercise of Options granted under the Plan and all other stock option plans of
the Company for employees shall not at any time exceed, in the aggregate,
fifteen percent (15%) of the then currently authorized Shares outstanding, on a
fully diluted basis, such number to be subject to adjustment in accordance with
Article XI of the Plan.
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Shares which may be acquired under the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options granted under the Plan expire or terminate without having been
exercised, the Shares covered by such expired or terminated Options may again be
subject to an Option under the Plan.
Except as provided in Articles XVIII and XXII hereof, the
Company may, from time to time during the period beginning on the Effective
Date and ending on January 1, 2004 (the "Termination Date"), grant to certain
key employees of the Company, or certain key employees of any subsidiary
corporation or parent corporation of the Company now existing or hereafter
formed or acquired, Incentive Options and/or Non-Qualified Options under the
terms hereinafter set forth.
As used in the Plan, the term "parent corporation" and
"subsidiary corporation" shall mean a corporation coming within the definition
of such terms contained in Sections 424(e) and 424(f) of the Code, respectively.
III. ADMINISTRATION
The board of directors of the Company (the "Board of
Directors") shall designate from among its members an option committee (the
"Committee") to administer the Plan. The Committee shall consist of no fewer
than two members of the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at
any time either with or without cause by resolution adopted by the Board of
Directors, and any vacancy on the Committee at any time may be filled by
resolution adopted by the Board of Directors.
Any or all powers and functions of the Committee may be
exercised at any time and from time to time by the Board of Directors or an
executive committee of the Board of Directors (the "Executive Committee";
references below to the Committee shall be deemed to include references to the
Board of Directors and the Executive Committee, except as the context otherwise
requires); provided, however, that all of the members of the Board of Directors
or the Executive Committee, as the case may be, which exercise any power or
authority under the Plan, are "disinterested persons" within the meaning of Rule
16b-3 (or any successor rule or regulation) promulgated under the Exchange Act.
Subject to the express provisions of the Plan, the Committee
shall have authority, in its discretion, to determine the persons to whom
Options shall be granted, the time when such persons shall be granted Options,
the number of Shares which shall be subject to each Option, the purchase price
of each Share which shall be subject to each Option, the period(s) during which
such Options shall be exercisable (whether in whole or part), and the other
terms and provisions thereof (which need not be identical). In determining the
persons to whom Options shall be granted and the number of Shares for which
Options are to be granted to each person, the Committee shall give
consideration to the length of service, the amount of earnings and the
responsibilities and duties of such person. Options need not be uniform as to
all grants and recipients thereof.
Subject to the express provisions of the Plan, the Committee
also shall have authority to construe the Plan and the Options granted
thereunder, to amend the Plan and the Options granted thereunder, to construe
any ambiguous provision of the Plan and/or any Option award agreement, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the Options (which need not be identical);
to determine eligibility for participation in the Plan; to determine whether an
Option will be a qualified Incentive Stock Option or a non-qualified option; to
grant waivers of Plan terms, conditions, restrictions and limitations or
accelerate exercisability of an Option; to correct errors, supply any omissions
or reconcile any inconsistencies in the Plan and/or any Option award agreement;
to supply additional conditions, terms and restrictions with respect to any
Options; to determine the fair market value of a Share, in accordance with the
Plan; and to make all other determinations necessary or advisable for
administering the Plan. The Committee also shall have the authority to require,
in its discretion, as a condition of the granting of any such Option, that the
employee agree (a) not to sell or otherwise dispose of Shares acquired pursuant
to the exercise of such Option for a period of six (6) months following the date
of the acquisition of such Option and (b) that in the event of termination of
employment of such employee, other than as a result of dismissal without cause,
such employee will not, for a period to be fixed at the time of the grant of the
Option, enter into any other employment or participate directly or indirectly in
any other business or enterprise which is competitive with the business of the
Company or any subsidiary corporation or parent corporation of the Company, or
enter into any employment in which such employee will be called upon to utilize
special knowledge obtained through employment with the Company or any subsidiary
corporation or parent corporation thereof.
The determination of the Committee on matters referred to in
this Article III shall be conclusive.
The Committee may employ such legal or other counsel,
consultants and agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion or computation received from any such
counsel, consultant or agent. Expenses incurred by the Committee in the
engagement of such counsel, consultant or agent shall be paid by the Company. No
member or former member of the Board of Directors, the Executive Committee or
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any award of Options granted hereunder.
In order to give management of the Company flexibility in
hiring new key employees and retaining key employees, the Vice President, Human
Resources and Administration of the Company is authorized to grant options to
purchase common stock of the Company under the Plan, provided that (1) no such
grant shall be made to an executive officer of the Company, (2) no such grant to
any individual shall exceed 25,000 shares of common stock of the Company, (3)
each grant shall be approved in writing by the Chief Executive Officer and Chief
Operating Officer of the Company and (4) the Vice President, Human Resources and
Administration or the Secretary of the Company shall notify the Committee in
writing of all such grants not later than the meeting of the Committee following
such grants.
IV. ELIGIBILITY
Options may be granted only to key or outstanding employees of
the Company or any subsidiary corporation or parent corporation of the Company
now existing or hereafter formed or acquired, except as hereinafter provided.
Any person who shall have retired from the active employment by the Company or
any subsidiary corporation or parent corporation of the Company, although such
person shall have entered into a consulting contract with the Company or a
subsidiary corporation or parent corporation of the Company, shall not be
eligible to receive an Option.
No person shall have any rights or claims under the Plan
except in accordance with the provisions of the Plan and the applicable Option.
The Plan does not create a right in any person to participate in the Plan, nor
does it create a right in any person to have any Options granted to him or her.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Option shall be
equal to 100% of the fair market value of a Share on the date of grant;
provided, however, that in the case of an Incentive Option granted to a person
who, at the time such Option is granted, owns shares of the Company or any
subsidiary corporation or parent corporation of the Company possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any subsidiary corporation or parent corporation of the
Company, the purchase price for each Share shall be such amount as the
Committee, in its best judgment, shall determine to be not less than one hundred
ten percent (110%) of the fair market value per Share at the date the Option is
granted. In determining the stock ownership of an employee for any purpose under
the Plan, the rules of Section 424(d) of the Code shall be applied, and the
Committee may rely on representations of fact made to it by the employee and
believed by it in good faith to be true. Each Option shall state whether such
Option will be a qualified Incentive Option, a Non-Qualified Option or a
combination of the two types.
If the Shares are listed on a national securities exchange in
the United States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be the closing quotation at
which such Shares are sold on such national securities exchange on the date such
Option is granted. In the event that the Shares are listed on a national
securities exchange in the United States on such date but the Shares are not
traded on such date, or such national securities exchange is not open for
business on such date, the fair market value per Share shall be determined as of
the closest preceding date on which such exchange shall have been open for
business and the Shares were traded. If the Shares are listed on more than one
national securities exchange in the United States on the date any such Option is
granted, the Committee shall determine which national securities exchange shall
be used for the purpose of determining the fair market value per Share.
If on the date any Option is granted a public market exists
for the Shares but such Shares are not listed on a national securities exchange
in the United States, the fair market value per Share shall be deemed to be the
closing price as reported by the Nasdaq National Market (or its successor
quotation system) for such Shares on the date such Option is granted. In the
event that there is no closing price reported by the Nasdaq National Market (or
its successor quotation system) for Shares on the date such Option is granted,
the fair market value per Share shall be the closing price reported by the
Nasdaq National Market (or its successor quotation system) for Shares on the
closest date preceding the date such Option is granted for which such quotations
are available.
If on the date any Option is granted no public market exists
for Shares, the fair market value per Share shall be determined by such other
reasonable valuation method as the Committee shall, in its discretion, select
and apply in good faith. For all purposes of this Plan, the fair market value
per Share shall be determined subject to Section 422(c)(7) of the Code.
For all purposes of this Plan, (i) the fair market value of a
Share shall be determined in accordance with this Article V and (ii) the
determination by the Committee of the fair market value of a Share shall be
conclusive.
Upon the exercise of an Option granted hereunder, the Company
shall cause the purchased Shares to be issued only when it shall have received
the full purchase price for the Shares, and applicable taxes, if any, in
accordance with Article XV hereof, in cash; provided, however, that in lieu of
cash, the holder of an Option may, to the extent permitted by applicable law,
exercise an Option (a) in whole or in part, by delivering to the Company Shares
(in proper form for transfer and accompanied by all requisite stock transfer tax
stamps or cash in lieu thereof) owned by such holder for at least six (6) months
prior to such delivery having a fair market value equal to the cash exercise
price applicable to that portion of the Option being exercised by the delivery
of such shares, the fair market value of Common Shares so delivered to be
determined as of the date immediately preceding the date on which the Option is
exercised, or as may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations, (b) in whole or in part, by
delivering to the Company authorization for the immediate sale of the Shares
that will be purchased by exercise of the Option and retention by Company of
such sale or liquidation proceeds (accompanied by all requisite authorizations
as legal counsel for the Company deem necessary) with respect to such numbers of
Shares having a fair market value equal to the cash exercise price applicable to
that portion of the Option being exercised by holder, the fair market value of
Shares to be so purchased and sold to be determined as of the date immediately
preceding the date on which the Option is exercised, or as may be required in
order to comply with or to conform to the requirements of any applicable laws or
regulations, or (c) in part, by delivering to the Company an executed promissory
note on such terms and conditions as the Committee shall determine, at the time
of grant, in its discretion; provided, however, that (i) the principal amount of
such note shall not exceed ninety percent (90%) (or such lesser percentage as
would be permitted by applicable margin regulations) of the aggregate purchase
price of the Shares then being purchased pursuant to the exercise of such Option
and (ii) payment for shares with a promissory note is permissible under
applicable law.
VI. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Any Option granted hereunder shall be exercisable at such
times, in such amounts and during such period or periods as the Committee shall
determine at the date of the grant of such Option; provided, however, that an
Incentive Option shall not be exercisable after the expiration of ten (10) years
from the date such Option is granted; provided, further, that in the case of an
Incentive Option granted to a person who, at the time such Incentive Option is
granted, owns stock of the Company or any subsidiary corporation or parent
corporation of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any
subsidiary corporation or parent corporation of the Company, such Incentive
Option shall not be exercisable after the expiration of five (5) years from the
date such Incentive Option is granted.
The Committee shall have the right to accelerate, in whole or
in part, from time to time, conditionally or unconditionally, rights to exercise
any Option granted hereunder.
To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.
Except to the extent otherwise provided under the Code, to the
extent that the aggregate fair market value of stock for which Incentive Options
(under all stock option plans of the Company and of any parent corporation or
subsidiary corporation of the Company) are exercisable for the first time by an
employee during any calendar year exceeds $100,000, such Options shall be
treated as Non-Qualified Options. For purposes of this limitation, (a) the fair
market value of stock is determined as of the time the Option is granted, and
(b) the limitation will be applied by taking into account Options in the order
in which they were granted.
In no event shall an Option granted hereunder be exercised for
a fraction of a Share or the lesser of fifty (50) Shares or the full number of
Shares then subject to the Option.
A person entitled to receive Shares upon the exercise of an
Option shall not have the rights of a stockholder with respect to such Shares
until the date of issuance of a stock certificate to such person for such
Shares; provided, however, that until such stock certificate is issued, any
holder of an Option using previously acquired Shares in payment of an option
exercise price shall continue to have the rights of a stockholder with respect
to such previously acquired Shares.
VII. TERMINATION OF EMPLOYMENT
Upon termination of employment of any employee of the Company
and all subsidiary corporations and parent corporations of the Company, any
Option previously granted to the employee, unless otherwise specified by the
Committee in the Option, shall, to the extent not theretofore exercised,
terminate and become null and void; provided, however, that:
(a) if the employee shall die while in the employ of such
corporation or during either the three (3) month or one (1)
year period, whichever is applicable, specified in clause (b)
below and at a time when such employee was entitled to
exercise an Option as herein provided, the legal
representative of such employee, or such person who acquired
such Option by bequest or inheritance or by reason of the
death of the employee, may, not later than one (1) year from
the date of death, exercise such Option, to the extent not
theretofore exercised, in respect of any or all of such number
of Shares as specified by the Committee in such Option; and
(b) if the employment of any employee to whom such Option
shall have been granted shall terminate by reason of the
employee's retirement (at such age or upon such conditions as
shall be specified by the Committee and stated in the Option),
disability (as described in Section 22(e)(3) of the Code) or
dismissal by the employer other than for cause (as defined
below), and while such employee is entitled to exercise such
Option as herein provided, such employee shall have the right
to exercise such Option so granted in respect of any or all of
such number of Shares as specified by the Committee in such
Option, at any time up to and including (i) three (3) months
after the date of such termination of employment in the case
of termination by reason of retirement or dismissal other than
for cause, and (ii) one (1) year after the date of termination
of employment in the case of termination by reason of
disability.
In no event, however, shall any person be entitled to exercise
any Option after the expiration of the period of exercisability of such Option,
as specified therein.
If an employee voluntarily terminates his or her employment,
or is discharged for cause, any Option granted hereunder shall, unless otherwise
specified by the Committee in the Option, forthwith terminate with respect to
any unexercised portion thereof.
If an Option granted hereunder shall be exercised by the legal
representative of a deceased grantee or by a person who acquired an Option
granted hereunder by bequest or inheritance or by reason of the death of any
employee or former employee, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative or other person to exercise such Option.
For the purposes of the Plan, the term "for cause" shall mean
(a) with respect to an employee who is a party to a written employment agreement
with, or, alternatively, participates in a compensation or benefit plan of the
Company or a subsidiary corporation or parent corporation of the Company, which
agreement or plan contains a definition of "for cause" or "cause" (or words of
like import) for purposes of termination of employment thereunder by the Company
or such subsidiary corporation or parent corporation of the Company, "for cause"
or "cause" as defined therein; or (b) in all other cases, (i) the willful
commission by an employee of an act that causes or may cause substantial damage
to the Company or a subsidiary corporation or parent corporation of the Company;
(ii) the commission by an employee of an act of fraud in the performance of such
employee's duties on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; (iii) conviction of the employee for commission of a
felony in connection with the performance of his duties on behalf of the Company
or a subsidiary corporation or parent corporation of the Company, or (iv) the
continuing failure of an employee to perform the duties of such employee to the
Company or a subsidiary corporation or parent corporation of the Company after
written notice thereof and a reasonable opportunity to be heard and cure such
failure are given to the employee by the Committee.
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an "employee" of such corporation for
purposes of Section 422 of the Code. If an individual is on leave of absence
taken with the consent of the corporation by which such individual was employed,
or is on active military service, and is determined to be an "employee" for
purposes of the exercise of an Option, such individual shall not be entitled to
exercise such Option during such period and while the employment is treated as
continuing intact unless such individual shall have obtained the prior written
consent of such corporation, which consent shall be signed by the chairman of
the board of directors, the president, a vice-president or other duly authorized
officer of such corporation.
A termination of employment shall not be deemed to occur by
reason of (i) the transfer of an employee from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the Company or
(ii) the transfer of an employee from employment by a subsidiary corporation or
a parent corporation of the Company to employment by the Company or by another
subsidiary corporation or parent corporation of the Company.
VIII. EXERCISE OF OPTIONS
Options granted under the Plan may be exercised by the
optionee as to all or part of the Shares covered thereby by the giving of
written notice of the exercise thereof to the Corporate Secretary of the Company
at the principal business office of the Company, specifying the number of Shares
to be purchased and accompanied by payment of the purchase price stated in the
Option and applicable taxes, if any, in accordance with Article XV hereof.
Subject to the terms of Articles XIII, XIV and XVI hereof, the Company shall
cause certificates for the Shares so purchased to be delivered at the principal
business office of the Company, against payment of the full purchase price, on
the date specified in the notice of exercise.
IX. USE OF PROCEEDS
This Plan shall be unfunded. The cash proceeds of the sale of
Shares subject to the Options granted hereunder are to be added to the general
funds of the Company and used for its general corporate purposes as the Board of
Directors shall determine.
X. NONTRANSFERABILITY OF OPTIONS
No Option granted hereunder shall be transferable, whether by
operation of law or otherwise, other than by will or the laws of descent and
distribution, and any Option granted hereunder shall be exercisable, during the
lifetime of the grantee thereof, only by such grantee. Except to the extent
provided above, Options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.
XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
Notwithstanding any other provision contained herein, in the
event of any change in the Shares subject to the Plan or to any Option granted
under the Plan (through merger, consolidation (whether or not the Company is a
surviving corporation), reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, extraordinary dividend payable in cash or
property, combination of shares, exchange of shares, or other like change in
capital structure of the Company), an adjustment shall be made to each
outstanding Option such that each such Option shall thereafter be exercisable
for such securities, cash and/or other property as would have been received in
respect of the Shares subject to such Option had such Option been exercised in
full immediately prior to such change, and such an adjustment shall be made
successively each time any such change shall occur. The term "Shares" after any
such change shall refer to the securities, cash and/or property then receivable
upon exercise of an Option. In addition, in the event of any such change, the
Committee shall make any further adjustment to the maximum number of Shares
which may be acquired under the Plan pursuant to the exercise of Options, the
maximum number of Shares for which Options may be granted to any one employee of
the Company, and the number of Shares and price per Share subject to outstanding
Options as shall be equitable to prevent dilution or enlargement of rights under
such Options, and the determination of the Committee as to these matters shall
be conclusive; provided, however, that (a) each such adjustment with respect to
an Incentive Option shall comply with the rules of Section 424(a) of the Code
(or any successor provision), and (b) in no event shall any adjustment be made
which would render any Incentive Option granted hereunder other than an
"incentive stock option" as defined in Section 422 of the Code.
In the event of a "change in control" of the Company, all then
outstanding Options shall immediately become exercisable. For purposes of the
Plan, a "change in control" of the Company occurs if (a) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
normally entitled to vote for the election of directors of the Company is
acquired by another person, firm or corporation or by a cooperating group of
such individuals or entities, (b) the Board of Directors approves the sale of
all or substantially all of the property or assets of the Company, or (c) the
Board of Directors approves a consolidation or merger of the Company with
another corporation, the consummation of which would result in the occurrence of
an event described in clause (a) above.
Notwithstanding anything contained herein to the contrary, the
Committee, in its discretion, may determine that, upon the occurrence of a
transaction described in the preceding paragraph, each Option outstanding
hereunder shall terminate within a specified number of days after notice to the
holder, and such holder shall receive, with respect to each Share subject to
such Option, an amount equal to the excess of the fair market value of such
Shares immediately prior to the occurrence of such transaction over the exercise
price per Share of such Option; such amount shall be payable in cash, in one or
more of the kinds of property payable in such transaction, or in a combination
thereof, as the Committee in its discretion shall determine. The provisions
contained in the preceding sentence shall be inapplicable to an Option granted
within six (6) months before the occurrence of a transaction described above if
the holder of such Option is subject to the reporting requirements of Section
16(a) of the Exchange Act.
XII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the
employment of any holder of an Option and it shall not impose any obligation on
the part of any holder of an Option to remain in the employ of the Company or of
any subsidiary corporation or parent corporation thereof.
XIII. PURCHASE FOR INVESTMENT
Except as hereinafter provided, the Committee may require the
holder of an Option granted hereunder, as a condition of exercise of such
Option, to execute and deliver to the Company a written statement, in form
satisfactory to the Committee, in which such holder represents and warrants that
such holder is purchasing or acquiring the Shares acquired thereunder for such
holder's own account, for investment only and not with a view to the resale or
distribution thereof, and agrees that any subsequent resale or distribution of
any of such Shares shall be made only pursuant to either (i) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer of sale or sale of such Shares,
obtain a prior favorable written opinion of counsel, in form and substance
satisfactory to counsel for the Company, as to the application of such exemption
thereto. The foregoing restriction shall not apply to (x) issuances by the
Company so long as the Shares being issued are registered under the Securities
Act and a prospectus in respect thereof is current or (y) reofferings of Shares
by affiliates of the Company (as defined in Rule 405 or any successor rule or
regulation promulgated under the Securities Act) if the Shares being reoffered
are registered under the Securities Act and a prospectus in respect thereof is
current.
Nothing herein shall be construed as requiring the Company to
register Shares subject to any Option under the Securities Act. In addition, if
at any time the Committee shall determine that the listing or qualification of
the Shares subject to such Option on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of an Option, or the issuance of Shares thereunder, such Option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
XIV. ISSUANCE OF STOCK CERTIFICATES; LEGENDS,
PAYMENT OF EXPENSES
Upon any exercise of an Option which may be granted hereunder
and payment of the purchase price and applicable taxes, if any, in accordance
with Article XV hereof, in respect thereof in accordance with the terms of this
Plan and the Option, a certificate or certificates for the Shares shall be
issued by the Company in the name of the person exercising the Option and shall
be delivered to or upon the order of such person.
The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as the
Committee, in its discretion, determines to be necessary or appropriate to (a)
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (b) implement the provisions of the Plan and
any agreement between the Company and the optionee or grantee with respect to
such Shares, or (c) permit the Company to determine the occurrence of a
disqualifying disposition, as described in Section 421(b) of the Code, of Shares
transferred upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect
to the issuance or transfer of Shares, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and
expenses shall be borne by the recipient of the Shares unless such Registration
Statement has been filed by the Company for its own corporate purposes (and the
Company so states) in which event the recipient of the Shares shall bear only
such fees and expenses as are attributable to the inclusion of the Shares he or
she receives in the Registration Statement.
All Shares issued as provided herein shall be fully paid and
nonassessable to the extent permitted by law.
XV. WITHHOLDING TAXES
The Company may require an employee exercising a Non-Qualified
Option granted hereunder, or disposing of Shares acquired pursuant to the
exercise of an Incentive Option in a disqualifying disposition (within the
meaning of Section 421(b) of the Code), to reimburse the corporation that
employs such employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or
disposition of such Shares. In lieu thereof, the corporation that employs such
employee shall have the right to withhold the amount of such taxes from any
other sums due or to become due from such corporation to the employee upon such
terms and conditions as the Committee shall prescribe. The corporation that
employs such employee may, in its discretion, hold the stock certificate to
which such employee is entitled upon the exercise of an Option as security for
the payment of such withholding tax liability, until cash sufficient to pay that
liability has been accumulated. In addition, at any time that the Company
becomes subject to a withholding obligation under applicable law with respect to
the exercise of a Non-Qualified Option (the "Tax Date"), except as set forth
below, a holder of a Non-Qualified Option may elect to satisfy, in whole or in
part, the holder's related personal tax liabilities (an "Election") by (a)
directing the Company to withhold from Shares issuable in the related exercise
either a specified number of Shares or Shares having a specified value (in each
case not in excess of the related personal tax liabilities), (b) tendering
Shares previously issued pursuant to the exercise of an Option or other shares
of the Company's common stock owned by the holder for at least six (6) months
prior to such tender or (c) combining any or all of the foregoing options in any
fashion. An Election shall be irrevocable. The withheld Shares and other Shares
tendered in payment shall be valued at their fair market value (determined in
accordance with the principles set forth in Article V hereof) on the Tax Date.
The Committee may disapprove of any Election, suspend or terminate the right to
make Elections or provide that the right to make Elections shall not apply to
particular Shares or exercises. The Committee may impose any additional
conditions or restrictions on the right to make an Election as it shall deem
appropriate. In addition, the Company shall be authorized to effect any such
withholding upon exercise of a Non-Qualified Option by retention of shares
issuable upon such exercise having a fair market value at the date of exercise
(as determined under Article V) which is equal to the amount to be withheld;
provided, however, that the Company shall not be authorized to effect such
withholding without the prior written consent of the employee if such
withholding would subject such employee to liability under Section 16(b) of the
Exchange Act. The Committee may prescribe such rules as it determines with
respect to employees subject to the reporting requirements of Section 16(a) of
the Exchange Act to effect such tax withholding in compliance with the Rules
established by the Securities and Exchange Commission (the "Commission") under
Section 16 of the Exchange Act and the positions of the staff of the Commission
thereunder expressed in no-action letters exempting such tax withholding from
liability under Section 16(b) of the Exchange Act.
XVI. LISTING OF SHARES AND RELATED MATTERS
The Board of Directors may delay any issuance or delivery of
Shares if it determines that listing, registration or qualification of Shares
covered by the Plan upon any national securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Board of
Directors.
XVII. AMENDMENT OF THE PLAN
The Board of Directors may, from time to time, amend the Plan,
provided that no amendment shall be made, without the approval of the
stockholders of the Company where such approval is necessary to satisfy (i) any
requirements of the Code relating to Incentive Options or (ii) applicable state
law, that will (a) increase the total number of Shares reserved for Options
under the Plan (other than an increase resulting from an adjustment provided for
in Article XI hereof), (b) reduce the exercise price of any Incentive Option
granted hereunder, (c) modify the provisions of the Plan relating to
eligibility, (d) extend the duration of the Plan or the period during which
Options may be exercised pursuant to Article VI hereof, or (e) materially
increase the benefits accruing to participants under the Plan. The Committee
shall be authorized to amend the Plan and the Options granted thereunder to
permit the Incentive Options granted thereunder to qualify as incentive stock
options within the meaning of Section 422 of the Code and the Treasury
regulations promulgated thereunder. The rights and obligations under any Option
granted before amendment of the Plan or any unexercised portion of such Option
shall not be adversely affected by amendment of the Plan or the Option without
the consent of the holder of such Option.
XVIII. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate
the Plan; provided, however, that the Board of Directors shall not suspend or
terminate the Plan prior to granting the Options on the dates set forth in
Article II to the key employees of the Company listed on Subsections A and B of
Annex A hereto. The Plan shall terminate at the close of business on the
Termination Date. Options may not be granted while the Plan is suspended or
after it is terminated. Rights and obligations under any Option granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the written consent of the person to whom
the Option was granted. The power of the Committee to construe and administer
any Options granted prior to the termination or suspension of the Plan under
Article III nevertheless shall continue after such termination or during such
suspension.
XIX. SAVINGS PROVISION
With respect to persons subject to Section 16 of the Exchange
Act, transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law determined by the
Committee in its sole discretion.
XX. GOVERNING LAW
The Plan and such Options as may be granted hereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Florida from time to time obtaining.
XXI. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not
be deemed to affect the validity of any other provision.
XXII. EFFECTIVE DATE
The Plan shall become effective at 9:00 A.M., Sarasota,
Florida time, on January 1, 1994 (the "Effective Date"); provided, however, that
if the Plan is not approved by a vote of the stockholders of the Company at an
annual meeting or any special meeting or by unanimous written consent within
twelve (12) months after the Effective Date, any Options granted hereunder shall
be Non-Qualified Options whether or not initially designated as such by the
Committee.
