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Exhibit 10.1
EYE CARE INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
1. Purposes.
The EYE CARE INTERNATIONAL, INC. 1997 STOCK OPTION PLAN (the "Plan") is
intended to provide the employees, directors, independent contractors and
consultants of Eye Care International, Inc. (the "Company") and/or any
subsidiary or parent thereof with an added incentive to commence and/or continue
their services to the Company and to induce them to exert their maximum efforts
toward the Company's success. By thus encouraging employees, directors,
independent contractors and consultants and promoting their continued
association with the Company, the Plan may be expected to benefit the Company
and its stockholders. The Plan allows the Company to grant Incentive Stock
Options ("ISOs") (as defined in Section 422(b) of the Internal Revenue Code of
1986, as amended (the "Code"), Non-Qualified Stock Options ("NQSOs") not
intended to qualify under Section 422(b) of the Code and Stock Appreciation
Rights ("SARs") (collectively the "Options"). The vesting of one or more Options
granted hereunder may be based on the attainment of specified performance goals
of the participant or the performance of the Company, one or more subsidiaries,
parent and/or division of one or more of the above.
2. Shares Subject to the Plan.
The total number of shares of Class A Common Stock of the Company,
$.001 par value per share, that may be subject to Options granted under the Plan
shall be five hundred thousand (500,000) in the aggregate, subject to adjustment
as provided in Paragraph 8 of the Plan; however, the grant of an ISO to an
employee together with a tandem SAR or any NQSO to an employee together with a
tandem SAR shall only require one share of Class A Common Stock available
subject to the Plan to satisfy such joint Option. The Company shall at all times
while the Plan is in force reserve such number of shares of Class A Common Stock
as will be sufficient to satisfy the requirement of outstanding Options granted
under the Plan. In the event any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available for granting of Options under the Plan.
3. Eligibility.
All employees of the Company or of a "subsidiary" or "parent" of the
Company, as the quoted terms are defined within Section 424 of the Code are
eligible to receive ISO's or ISO's in tandem with SAR's (provided the SAR meets
the requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through
(e) inclusive). ISO's or ISO's in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through (e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who
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is not otherwise an employee is not deemed an employee for such purposes. NQSOs
and NQSO's in tandem with SARs may be granted from time to time under the Plan
to one or more employees of the Company, Officers, members of the Board of
Directors, independent contractors, consultants and other individuals who are
not employees of, but are involved in the continuing development and success of
the Company and/or of a subsidiary of the Company, including persons who have
previously been granted Options under the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by a
Stock Option Committee or Compensation Committee (the "Committee") which shall
be comprised of solely of at least two Outside Directors (as such term is
defined in regulations promulgated from time to time with respect to Section
162(m)(4)(C)(i) of the Code) appointed by such Board of Directors of the
Company. As and to the extent authorized by the Board of Directors of the
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors or Committee shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISOs,
NQSOs, and/or SARs in tandem with NQSOs, and/or SARs in tandem with ISOs) and
the number of shares of Class A Common Stock to be subject to each Option, the
manner and form in which the optionee can tender payment upon the exercise of
his Option, and to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions of
Option agreements that may be entered into in connection with Options (which
need not be identical), subject to the limitation that agreements granting ISOs
must be consistent with the requirements for the ISOs being qualified as
"incentive stock options" as provided in Section 422 of the Code, and to make
all other determinations and take all other actions necessary or advisable for
the administration of the Plan. In making such determinations, the Board of
Directors and/or the Committee may take into account the nature of the services
rendered by such individuals, their present and potential contributions to the
Company's success, and such other factors as the Board of Directors and/or the
Committee, in its discretion, shall deem relevant. The Board of Directors'
and/or the Committee's determinations on the matters referred to in this
Paragraph shall be conclusive.
(b) Notwithstanding anything contained herein to the contrary, at
anytime during the period the Company's Class A Common Stock is registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "1934
Act), the Committee, if one has been appointed to administer all or part of the
Plan, shall have the exclusive right to grant Options to Covered Employees as
defined under Section 162(m)(3) of the Code (generally executive officers
subject to Section 16 of the 1934 Act) and set forth the terms and conditions
thereof. With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended, to the extent possible, comply with
all applicable conditions of Rule 16b-3, as amended from time to time, (and its
successor provisions, if any) under the 1934 Act and Section 162(m)(4)(C) of the
Code of 1986, as amended. To the extent any provision of the Plan or action by
the Board of Directors or Committee fails to so
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comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board of Directors and/or such Committee.
5. Terms of Options.
Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs or SARs in tandem with
NQSOs or SARs in tandem with ISOs. An ISO or an NQSO enables the optionee to
purchase from the Company, at any time during a specified exercise period, a
specified number of shares of Class A Common Stock at a specified price (the
"Option Price"). The optionee, if granted a SAR in tandem with a NQSO or ISO,
may receive from the Company, in lieu of exercising his option to purchase
shares pursuant to his NQSO or ISO, at one of the certain specified times during
the exercise period of the NQSO or ISO as set by the Board of Directors or the
Committee, the excess of the fair market value upon such exercise (as determined
in accordance with subparagraph (b) of this Paragraph 5) of one share of Class A
Common Stock over the Option Price per share specified upon grant of the NQSO or
ISO/SAR multiplied by the number of shares of Class A Common Stock covered by
the SAR so exercised. The character and terms of each Option granted under the
Plan shall be determined by the Board of Directors and/or the Committee
consistent with the provisions of the Plan, including the following:
(a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Class A Common Stock subject to
each ISO and each SAR issued in tandem with an ISO shall not be less than the
fair market value of such shares of Class A Common Stock at the time such ISO is
granted. Such fair market value shall be determined by the Board of Directors
and, if the shares of Class A Common Stock are listed on a national securities
exchange or traded on the over-the-counter market, the fair market value shall
be the closing price on such exchange, or the mean of the closing bid and asked
prices of the shares of Class A Common Stock on the over-the-counter market, as
reported by the Nasdaq Stock Market, the National Association of Securities
Dealers OTC Bulletin Board or the National Quotation Bureau, Inc., as the case
may be, on the day on which the Option is granted or, if there is no closing
price or bid or asked price on that day, the closing price or mean of the
closing bid and asked prices on the most recent day preceding the day on which
the Option is granted for which such prices are available. If an ISO or SAR in
tandem with an ISO is granted to any individual who, immediately before the ISO
is to be granted, owns (directly or through attribution) more than 10% of the
total combined voting power of all classes of capital stock of the Company or a
subsidiary or parent of the Company, the Option Price of the shares of Class A
Common Stock subject to such ISO shall not be less than 110% of the fair market
value per share of the shares of Class A Common Stock at the time such ISO is
granted.
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(c) The Option Price of the shares of Class A Common Stock subject to
an NQSO or an SAR in tandem with a NQSO granted pursuant to the Plan shall be
determined by the Board of Directors or the Committee, in its sole discretion,
but in no event less than 85% of the fair market value per share of the shares
of Class A Common Stock at the time of grant.
(d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO or an SAR in tandem with an ISO is
granted to any individual who, immediately before the ISO is granted, owns
(directly or through attribution) more that 10% of the total combined voting
power of all classes of capital stock of the Company or of a subsidiary or
parent of the Company, such ISO shall by its terms expire and shall not be
exercisable after the expiration of five (5) years from the date of its grant.
(e) An SAR may be exercised at any time during the exercise period of
the ISO or NQSO with which it is granted in tandem and prior to the exercise of
such ISO or NQSO. Notwithstanding the foregoing, the Board of Directors and/or
the Committee shall in their discretion determine from time to time the terms
and conditions of SAR's to be granted, which terms may vary from the
afore-described conditions, and which terms shall be set forth in a written
stock option agreement evidencing the SAR granted in tandem with the ISO or
NQSO. The exercise of an SAR granted in tandem with an ISO or NQSO shall be
deemed to cancel such number of shares subject to the unexercised Option as were
subject to the exercised SAR. The Board of Directors or the Committee has the
discretion to alter the terms of the SARS if necessary to comply with Federal or
state securities law. Amounts to be paid by the Company in connection with an
SAR may, in the Board of Director's or the Committee's discretion, be made in
cash, Class A Common Stock or a combination thereof.
(f) An Option granted under the Plan shall become exercisable, in whole
at any time or in part from time to time, but in no event may an Option (i) be
exercised as to less than one hundred (100) shares of Class A Common Stock at
any one time, or the remaining shares of Class A Common Stock covered by the
Option if less than one hundred (100), and (ii) except with respect to
performance based Options, become fully exercisable more than five years from
the date of its grant nor shall less than 20% of the Option become exercisable
in any of the first five years of the Option, if not terminated as provided in
Section 6 hereof. The Board of Directors or the Committee, if applicable,
shall,in the event it so elects in its sole discretion, set one or more
performance standards with respect to one or more Options upon which vesting is
conditioned(which performance standards may vary among the Options).
(g) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (to the attention
of the Secretary) of written notice of the number of full shares of Class A
Common Stock with respect to which the Option is being exercised, accompanied by
payment in full, which payment at the option of the optionee shall be in the
form of (i) cash or certified or bank check payable to the order of the Company,
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of the Option Price of such shares of Class A Common Stock , or, (ii) if
permitted by the Committee or the Board of Directors, as determined by the
Committee or the Board of Directors in its sole discretion at the time of the
grant of the Option with respect to an ISO and at or prior to the time of
exercise with respect to a NQSO, by the delivery of shares of Class A Common
Stock having a fair market value equal to the Option Price or the delivery of an
interest-bearing promissory note having an original principal balance equal to
the Option Price and an interest rate not below the rate which would result in
imputed interest under the Code (provided, in order to qualify as an ISO, more
than one year shall have passed since the date of grant and one year from the
date of exercise), or (iii) at the option of the Committee or the Board of
Directors, determined by the Committee or the Board of Directors in its sole
discretion at the time of the grant of the Option with respect to an ISO and at
or prior to the time of exercise with respect to a NQSO, by a combination of
cash, promissory note and/or such shares of Class A Common Stock (subject to the
restriction above) held by the employee that have a fair market value together
with such cash and principal amount of any promissory note that shall equal the
Option Price, and, in the case of a NQSO, at the discretion of the Committee or
Board of Directors by having the Company withhold from the shares of Class A
Common Stock to be issued upon exercise of the Option that number of shares
having a fair market value equal to the exercise price and/or the tax
withholding amount due, or otherwise provide for withholding as set forth in
Paragraph 9(c) hereof, or in the event an employee is granted an ISO or NQSO in
tandem with an SAR and desires to exercise such SAR, such written notice shall
so state such intention. To the extent allowed by applicable Federal and state
securities laws, the Option Price may also be paid in full by a broker-dealer to
whom the optionee has submitted an exercise notice consisting of a fully
endorsed Option, or through any other medium of payment as the Board of
Directors and/or the Committee, in its discretion, shall authorize.
(h) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares of Class A Common Stock covered by such
holder's Option until such shares of Class A Common Stock shall be issued to
such holder upon the exercise of the Option.
(i) All ISOs or SARs in tandem with ISOs granted under the Plan shall
not be transferable otherwise than by will or the laws of descent and
distribution and may be exercised during the lifetime of the holder thereof only
by the holder. The Board or the Committee, in its sole discretion, shall
determine whether an Option other than an ISO or SAR in tandem with an ISO shall
be transferable. No Option granted under the Plan shall be subject to execution,
attachment or other process.
(j) The aggregate fair market value, determined as of the time any ISO
or SAR in tandem with an ISO is granted and in the manner provided for by
Subparagraph (b) of this Paragraph 5, of the shares of Class A Common Stock with
respect to which ISOs granted under the Plan are exercisable for the first time
during any calendar year and under incentive stock options qualifying as such in
accordance with Section 422 of the Code granted under any other incentive stock
option plan maintained by the Company or its parent or subsidiary
corporations, shall not exceed $100,000. Any grant of Options in excess of such
amount shall be deemed a grant of a NQSO.
(k) Notwithstanding anything contained herein to the contrary, an SAR
which was granted in tandem with an ISO shall (i) expire no later than the
expiration of the underlying ISO; (ii) be for no more than 100% of the spread at
the time the SAR is exercised; (iii) shall only be
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transferable when the underlying ISO is transferable; (iv) only be exercised
when the underlying ISO is eligible to be exercised; and (v) only be exercisable
when there is a positive spread.
6. Death or Termination of Employment/Consulting Relationship.
(a) Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company voluntarily by the employee or termination of a
consulting relationship with the Company prior to the termination of the term
thereof, a holder of an Option under the Plan may exercise such Options to the
extent such Options were exercisable as of the date of termination at any time
within thirty (30) days after termination, subject to the provisions of
Subparagraph (d) of this Paragraph 6. Except as provided herein, or otherwise
determined by the Board of Directors or the Committee in its sole discretion, if
such employment or consulting relationship shall terminate for any reason other
than death, voluntary termination by the employee or for cause, then such
Options may be exercised at anytime within three (3) months after such
termination. Notwithstanding anything contained herein to the contrary, unless
otherwise determined by the Board of Directors or the Committee in its sole
discretion, any options granted hereunder to an Optionee and then outstanding
shall immediately terminate in the event the Optionee is terminated for
cause,and the other provisions of this Section 6 shall not be applicable
thereto. For purposes of this Section 6, termination for cause shall be deemed
the decision of the Company, in its sole discretion, that Optionee has not
adequately performed the services for which he/she/it was hired.
(b) If the holder of an Option granted under the Plan dies (i)while
employed by the Company or a subsidiary or parent corporation or while providing
consulting services to the Company or a subsidiary or parent corporation or (ii)
within three (3) months after the termination of such holder's
employment/consulting, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within such time as determined bythe
Board of Directors or the Committee in its sole discretion, but in no event less
than six months after the individual's death, to the extent such Options were
exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
(c) If the holder of an Option under the Plan becomes disabled within
the definition of section 22(e)(3) of the Code while employed by the Company or
a subsidiary or parent corporation, such Option may, subject to the provisions
of subparagraph (d) of this Paragraph 6, be exercised at any time within six
months less one day after such holder's termination of employment due to the
disability.
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(d) Except as otherwise determined by the Board of Directors or the
Committee in its sole discretion, an Option may not be exercised pursuant to
this Paragraph 6 except to the extent that the holder was entitled to exercise
the Option at the time of termination of employment, consulting relationship or
death, and in any event may not be exercised after the original expiration date
of the Option. Notwithstanding anything contained herein which may be to the
contrary, such termination or death prior to vesting shall, unless otherwise
determined by the Board of Directors or Committee, in its sole discretion, be
deemed to occur at a time the holder was not entitled to exercise the Option.
(e) The Board of Directors or the Committee, in its sole discretion,
may at such time or times as it deems appropriate, if ever, accelerate all or
part of the vesting provisions with respect to one or more outstanding options.
The acceleration of one Option shall not infer that any Option is or to
be accelerated.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Class A Common Stock
are hereafter changed by reason of recapitalization, reclassification, stock
split-up, combination or exchange of shares of Class A Common Stock or the like,
or by the issuance of dividends payable in shares of Class A Common Stock , an
appropriate adjustment shall be made by the Board of Directors, as determined by
the Board of Directors and/or the Committee, in the aggregate number of shares
of Class A Common Stock available under the Plan, in the number of shares of
Class A Common Stock issuable upon exercise of outstanding Options, and the
Option Price per share. In the event of any consolidation or merger of the
Company with or into another company, where the Company is not the surviving
entity, or the conveyance of all or substantially all of the assets of the
Company to another company for solely stock and/or securities, each then
outstanding Option shall upon exercise thereafter entitle the holder thereof to
such number of shares of Class A Common Stock or other securities or property to
which a holder of shares of Class A Common Stock of the Company would have been
entitled to upon such consolidation, merger or conveyance; and in any such case
appropriate adjustment, as determined by the Board of Directors of the Company
(or successor entity) shall be made as set forth above with respect to any
future changes in the capitalization of the Company or its successor entity. In
the event of the proposed dissolution or liquidation of the Company, or, except
as provided in (b) below, the sale of substantially all the assets of the
Company for other than stock and/or securities, all outstanding Options under
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the Plan will automatically terminate, unless otherwise provided by the Board of
Directors of the Company or any authorized committee thereof.
(b) Any Option granted under the Plan, may, at the discretion of the
Board of Directors of the Company and said other corporation, be exchanged for
options to purchase shares of capital stock of another corporation which the
Company, and/or a subsidiary thereof is merged into, consolidated with, or all
or a substantial portion of the property or stock of which is acquired by said
other corporation or separated or reorganized into. The terms, provisions and
benefits to the optionee of such substitute option(s) shall in all respects be
identical to the terms, provisions and benefits of optionee under his Option(s)
prior to said substitution. To the extent the above may be inconsistent with
Sections 424(a)(1) and (2) of the Code, the above shall be deemed interpreted so
as to comply therewith.
(c) Any adjustment in the number of shares of Class A Common Stock
shall apply proportionately to only the unexercised portion of the Options
granted hereunder. If fractions of shares of Class A Common Stock would result
from any such adjustment, the adjustment shall be revised to the next higher
whole number of shares of Class A Common Stock.
9. Further Conditions of Exercise.
(a) Unless the shares of Class A Common Stock issuable upon the
exercise of an Option have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, prior to the
exercise of the Option, an optionee must represent in writing to the Company
that such shares of Class A Common Stock are being acquired for investment
purposes only and not with a view towards the further resale or distribution
thereof, and must supply to the Company such other documentation as may be
required by the Company, unless in the opinion of counsel to the Company such
representation, agreement or documentation is not necessary to comply with said
Act.
(b) The Company shall not be obligated to deliver any shares of Class A
Common Stock until they have been listed on each securities exchange on which
the shares of Class A Common Stock may then be listed or until there has been
qualification under or compliance with such state or federal laws, rules or
regulations as the Company may deem applicable.
(c) The Board of Directors or Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with the exercise of any Option, including, but not
limited to, (i) the withholding of payment of all or any portion of such Option
and/or SAR until the holder reimburses the Company for the amount the Company is
required to withhold with respect to such taxes, or (ii) the cancelling of any
number of shares of Class A Common Stock issuable upon exercise of such Option
and/or SAR in an amount sufficient to reimburse the Company for the amount it is
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required to so withhold, (iii) the selling of any property contingently credited
by the Company for the purpose of exercising such Option, in order to with hold
or reimburse the Company for the amount it is required to so withhold, or (iv)
withholding the amount due from such employee's wages if the employee is
employed by the Company or any subsidiary thereof.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of capital stock of the Company entitled to vote thereon.
(c) The Board of Directors of the Company may at any time, prior to
ten(10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments of
the Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company entitled to
vote thereon, increase (except as provided by Paragraph 8) the maximum number of
shares of Class A Common Stock as to which Options or shares may be granted
under the Plan, or materially change the standards of eligibility under the
Plan. Any amendment to the Plan which, in the opinion of counsel to the Company,
will be deemed to result in the adoption of a new Plan, will not be effective
until approved by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company entitled to vote thereon.
(d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors
of the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed
pursuant hereto shall be deemed to confer upon any individual to whom an Options
or may be granted hereunder any right to remain in the employ of the Company or
of a subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
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