Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of
1934
Check the
appropriate box:
ý Preliminary
Information Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
¨ Definitive
Information Statement
IMMUNOBIOTICS,
INC.
(Name of
Registrant As Specified In Its Charter)
Payment
of Filing Fee (Check the Appropriate Box):
ý No
fee required
¨ Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1. Title
of each class of securities to which transaction applies:
_________________________________________
2. Aggregate
number of securities to which transaction applies:
_________________________________________
3. Per
unit price or other underlying value of transaction computed pursuant
to
Exchange
Act Rule 0-11
_________________________________________
4. Proposed
maximum aggregate value of transaction
_________________________________________
5. Total
fee paid
_________________________________________
¨ Check
box if any party of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
The
purpose of this letter is to inform you that a majority of our stockholders have
given our board the authority to adopt the ImmunoBiotics, Inc. 2009 Long Term
Incentive Plan (the “Plan”).
The
holders of shares representing 54.21% of our voting power have executed a
written consent giving our board the authority to approve and adopt the Plan.
The Plan is described in greater detail in the information statement
accompanying this notice. No additional consents are required to adopt the Plan
under the Florida Business Corporation Act and our articles of incorporation and
bylaws. WE ARE NOT
ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Because the written consent of holders of a majority of our voting power
satisfies all applicable stockholder voting requirements, we are not asking you
for a proxy; please do not send us one.
The
accompanying information statement is for information purposes only. Please read
it carefully.
This
information statement is being mailed on or about August ____, 2009, to the
stockholders of record of ImmunoBiotics, Inc. at the close of business on August6, 2009 (the “Record Date”). This information statement is being sent to you for
information purposes only. No action is requested or required on your part. This
information statement constitutes notice to our stockholders of corporate action
by stockholders without a meeting, as required by Section 607 of the Florida
Business Corporation Act.
This
information statement is being furnished to you to inform you that holders of
shares representing a majority of the voting power of shares of our common
stock, par value $0.0001 per share, have adopted, by written consent,
resolutions authorizing us to adopt the ImmunoBiotics, Inc. 2009 Long Term
Incentive Plan (the “Plan”).
As of the
close of business on the record date, we had 100,000,000 shares of common stock
authorized, of which 15,460,000, shares were outstanding. Each outstanding share
of common stock is entitled to one vote per share.
The
approval of the holders of a majority of our outstanding shares of common stock
is required for us to be able to receive a federal income tax deduction for
certain compensation under the Plan under Section 162(m) of the Internal Revenue
Code of 1986, as amended, and for qualifying the shares under the Plan for
special tax treatment under Section 422 of the Internal Revenue Code of 1986, as
amended. Under Florida law and our organizational documents, we are entitled to
obtain that approval by written consent. We have obtained written
consents approving the adoption of the Plan from stockholders holding
approximately 54.21% of the voting power of our common stock.
We will
bear the expenses relating to this information statement, including expenses in
connection with preparing and mailing this information statement and all
documents that now accompany or may in the future supplement it. We contemplate
that brokerage houses, custodians, nominees, and fiduciaries will forward this
information statement to the beneficial owners of our common stock held of
record by these persons and we will reimburse them for their reasonable expenses
incurred in this process.
Only one
information statement is being delivered to multiple stockholders sharing an
address, unless we have received contrary instructions from one or more of the
stockholders. We will undertake to deliver promptly upon written or oral request
a separate copy of the information statement to a stockholder at a shared
address to which a single copy of the information statement was delivered. You
may make a written or oral request by sending a written notification to our
principal executive offices stating your name, your shared address, and the
address to which we should direct the additional copy of the information
statement or by calling our principal executive offices at (800) 524-9172. If
multiple stockholders sharing an address have received one copy of this
information statement and would prefer us to mail each stockholder a separate
copy of future mailings, you may send notification to or call our principal
executive offices. Additionally, if current stockholders with a shared address
received multiple copies of this information statement and would prefer us to
mail one copy of future mailings to stockholders at the shared address,
notification of that request may also be made by mail or telephone call to our
principal executive offices.
TABLE
OF CONTENTS
VOTING
SECURITIES
3
DISSENTERS’
RIGHT OF APPRAISAL
3
ADOPTION
OF THE 2009 LONG TERM INCENTIVE PLAN
3
SECURITY
OWNERSHIP
6
BOARD
OF DIRECTORS’ RECOMMENDATION AND STOCKHOLDER APPROVAL
7
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
7
FORWARD-LOOKING
STATEMENTS
7
WHERE
YOU CAN FIND MORE INFORMATION
8
INCORPORATION
OF FINANCIAL INFORMATION
8
VOTING
SECURITIES
Pursuant
to ImmunoBiotics’ Bylaws and the Florida Business Corporation Act, any action
which may be taken at a meeting of shareholders may be taken without a meeting
if a consent in writing setting forth the action is signed by holders of
outstanding stock having not less than the minimum number of votes necessary to
pass such action at the meeting at which all of the shares entitled to vote
thereon were present and voted. The Company’s articles of incorporation does not
authorize cumulative voting. As of the record date, the Company had
15,460,000 voting shares of common stock issued and outstanding of which
7,730,001 shares are required to pass any stockholder
resolutions. The consenting stockholders are the record and
beneficial owners of 8,380,842 shares of the Company’s common stock as of August6, 2009, which represents 54.21% of the issued and outstanding shares of the
Company’s Common Stock. Pursuant to Section 607 of the Florida Business
Corporation Act, the consenting stockholders voted in favor of the actions
described herein in a unanimous written consent, dated August 5, 2009. No
consideration was paid for the consent.
DISSENTERS’
RIGHT OF APPRAISAL
Under
Florida law and our articles of incorporation and bylaws, no stockholder has any
right to dissent to the proposed adoption of the Plan, and no stockholder is
entitled to appraisal of or payment for their shares of our stock.
On August5, 2009 our Board of Directors approved and adopted our 2009 Long Term Incentive
Plan (the “Plan”), subject to shareholder approval. On August 5,2009, shareholders owning approximately 54.21% of the outstanding shares of our
common stock approved the Plan by action taken by written consent without a
meeting in accordance with the Florida Business Corporation Act. No further vote
of our shareholders is required to approve the Plan. Such approval by our
shareholders will be effective 20 calendar days after the date this Information
Statement is first mailed to our shareholders.
The
principal provisions of the Plan are summarized below.
Purpose of the Plan. The
purpose of the Plan is to promote long-term growth and profitability by
providing our key directors, officers, employees and consultants with incentives
to improve stockholder value and contribute to our growth and financial success
and enable us to attract, retain and reward the best available persons for
positions of substantial responsibility.
Eligibility. The Plan
provides for the granting to employees of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended,
and for the granting to employees, outside directors and consultants of
non-statutory stock options. In addition, the Plan permits the granting of
shares of restricted stock. Approximately, two employees (including our
executive officers) and five consultants are eligible to receive awards under
the Plan.
Administration. The Plan is
administered by a committee appointed by our Board of Directors or by the full
Board. Subject to the discretion of the Board, all members of such committee
must be a non-employee director and an outside director, as defined in the Plan.
Currently, the Plan is administered by our board of directors. Subject to the
limitations set forth in the Plan, the administrator has the authority to select
the persons to whom grants are to be made, to designate the number of shares to
be covered by each stock award, to determine whether an award will be restricted
stock or an option and whether an option is to be an incentive stock option or a
non-statutory stock option, to establish vesting schedules, to specify the
option exercise price and the type of consideration to be paid upon exercise,
and, subject to some restrictions, to specify other terms of stock
awards.
Options
Option Grants. Options
granted under the Plan will have an exercise price equal to the fair market
value of a share of our common stock on the option grant date. Incentive stock
options may only be granted to employees.
3
Exercise Price. The
administrator establishes the option exercise price, which in the case of
incentive stock options, must be at least the fair market value of the common
stock on the date of the grant or, with respect to optionees who own at least
10% of our outstanding common stock, 110% of fair market value. The fair market
value of our common stock for purposes of the Plan is determined by such methods
or procedures as shall be established from time to time by the
administrator.
Vesting. Options granted
under the Plan vest as follows: for initial grants at the rate specified in the
option agreement. However, in no event may an option be exercised
later than the earlier of the expiration of the term of the option or ten years
from the date of the grant of the option, or when an optionee owns stock
representing more than 10% of the voting power, five years from the date of the
grant of the option in the case of incentive stock options.
Limitation on Statutory Stock
Options. Any incentive stock options granted to an optionee which, when
combined with all other incentive stock options becoming exercisable for the
first time in any calendar year that are held by that person, would have an
aggregate fair market value in excess of $100,000, shall automatically be
treated as non-statutory stock options.
Restricted
Stock.
Awards
of shares of restricted stock will be made on such terms as determined by the
administrator and shall include provisions regarding the forfeiture of such
shares in the event employment by the participant, or service as a director,
terminates prior to the termination of the restrictions applicable to such
shares. The terms of such awards will be contained in a restricted stock
agreement entered into between the Company and the participant and may include,
among other provisions, the ability of the Company to purchase such Shares under
certain circumstances and that such shares will be held in escrow by the Company
until the termination of the applicable restrictions. The holder of shares of
restricted stock will generally be entitled to voting and other rights of
ownership prior to the termination of restrictions.
Transfer. Options granted
under the Plan are generally not transferable by the optionee except by will or
the laws of descent and distribution, and to certain related individuals with
the consent of the administrator. Restricted stock may not be transferred until
all of the restrictions terminate or expire.
Change in Control. In the
event of a change in control, any outstanding option that is not assumed or
continued, or an equivalent option or right is not substituted therefor pursuant
to the change in control transaction’s governing document, shall become fully
vested and exercisable immediately prior to the effective date of such change in
control and shall expire upon the effective date of such change in control and
all restrictions applicable to restricted stock shall terminate. The term
“change in control” shall be deemed to have occurred if (i) any sale, exchange
or other disposition of substantially all of the Corporation's assets; or (ii)
any merger, share exchange, consolidation or other reorganization or business
combination in which the Corporation is not the surviving or continuing
corporation, or in which the Corporation's stockholders become entitled to
receive cash, securities of the Corporation other than voting common stock, or
securities of another issuer.
Amendment and Termination.
The Plan may be amended, altered, suspended or terminated by our board of
directors at any time, but no such amendment, alteration, suspension or
termination may adversely affect the terms of any award previously granted
without the consent of the affected grantee, and any amendment will be subject
to shareholder approval to the extent required by applicable law, rules or
regulations. Unless terminated sooner, the Plan will terminate automatically on
September 1, 2019, ten years from the effective date.
Stock Subject to the Plan.
The maximum number of shares of common stock with respect to which plan awards
may be granted under the Plan is 10,000,000 assuming effectiveness of the
above-described Plan, as of August 31, 2009, there would be 10,000,000 shares
available for award. To date, no shares of restricted stock or
options have been issued under the Plan.
4
Federal
Income Tax Consequences
A
recipient of an incentive stock option will not recognize any taxable income
upon the grant of the option or at the time of exercise (although the optionee
will have income for alternative minimum income tax purposes at that time as if
the option were a nonqualified stock option). If the shares acquired upon
exercise of the incentive stock option are sold or exchanged after the later of
(a) one year from the date of exercise of the options and (b) two
years from the date of grant of the option, the difference between the amount
realized by the optionee on that sale or exchange and the option price will be
taxed to the optionee as a long-term capital gain or loss. If the shares are
disposed of before such holding period requirements are satisfied, then the
optionee will have ordinary income in the year of disposition equal to the
difference between the exercise price and the lower of the fair market value of
the stock at the date of the option exercise or the sale of the stock and the
optionee will have capital gain or loss, long-term or short-term, as the case
may be, in an amount equal to the difference between (i) the amount
realized by the optionee upon that disposition of the shares and (ii) the
option price paid by the optionee increased by the amount of ordinary income, if
any, so recognized by the optionee.
Any
options granted under the Plan to non-employee directors will be nonqualified
stock options, which do not qualify as incentive stock options and will not
qualify for any special tax benefits to the option holder. An option holder
generally will not recognize any taxable income at the time of the grant of
a nonqualified stock option. However, upon the option’s exercise, the
option holder will recognize ordinary income for federal income tax
purposes measured by the excess of the fair market value of the shares on
the exercise date over the exercise price. The income realized by an option
holder who is also an employee will be subject to income and other employee
withholding taxes.
The
option holder’s basis for determination of gain or loss upon the subsequent
disposition of shares acquired upon the exercise of a nonqualified stock option
will be the amount paid for such shares plus any ordinary income recognized as a
result of the exercise of such option. Upon disposition of any shares acquired
pursuant to the exercise of a nonqualified stock option, the difference between
the sale price and the option holder’s basis in the shares will be treated as a
capital gain or loss and generally will be characterized as long-term capital
gain or loss if the shares have been held for more than one year at their
disposition.
In
general, there will be no federal income tax deduction allowed to the Company
upon the grant or termination of a nonqualified stock option or a sale or
disposition of the shares acquired upon the exercise of a nonqualified stock
option. However, upon the exercise of a nonqualified stock option, the Company
will be entitled to a deduction for federal income tax purposes equal to the
amount of ordinary income that an option holder is required to recognize as a
result of the exercise, provided that the deduction is not otherwise disallowed
under the Internal Revenue Code (the “Code”).
In
general, a recipient of Restricted Stock will not incur any federal income tax
liability upon grant because the shares will be subject to a substantial risk of
forfeiture. Instead, he or she will recognize ordinary income at the time of
vesting (at the time all restrictions lapse) equal to the excess, if any, of the
fair market value of the shares on the vesting date of the shares over any
amount paid for the shares. Alternatively, a recipient may elect to recognize
income at the time of grant by making a Section 83(b) election and filing
such election with the IRS within 30 days of the date of grant, in which
case the recipient will recognize ordinary income at the time of grant equal to
the excess, if any, of the fair market value of the stock at the time of grant
over any amount paid for the shares; in that case, there is no further income
recognition when the restrictions lapse. The Corporation is entitled to a tax
deduction in an amount equal to the ordinary income recognized by the
participant.
AWARDS TO BE ISSUED UNDER THE
PLAN
To date,
no awards have been granted under the Plan. Because the administrator of the
Plan has complete discretion to determine awards under the Plan, it is not
possible to determine the benefits or amounts, if any, that will be received or
allocated to any person under the Plan. No awards would have been allocated to
any of the named individuals for the last completed fiscal year if the Plan had
been in effect at such time.
The
following table sets forth the awards that the individuals and groups referred
to below have been allocated as of August 6, 2009, under the Plan.
The
following table sets forth, as of August 6, 2009, information concerning the
beneficial ownership of common stock by each director of the Company, the Chief
Executive Officer and the other compensated executive officers provided that
their annual compensation exceeds $100,000, and all directors and executive
officers as a group. Unless otherwise indicated below, the business
address for each named individual is the principal executive office address,
which is 1062 Calle Negocio, Suite C, San Clemente, CA92673. According to rules
adopted by the Securities and Exchange Commission, a person is the “beneficial
owner” of securities if he or she has, or shares, the power to vote such
securities or to direct their investment. Unless otherwise indicated, each of
the shareholders has sole voting and investment power with respect to shares
beneficially owned.
The table
also sets forth, as of August 6, 2009, the name, address, stock ownership and
voting power of each person or group of persons known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock. Unless
otherwise indicated, each of the shareholders has sole voting and investment
power with respect to shares beneficially owned.
Name
and Address(1)
Amount
and
Nature
Of
Beneficial
Ownership
Percentage
of
Class
Daniel
J. Smith(2)
679,970
4.40
%
Thomas
Lahey(2)
5,830,842(2)
37.72
%
Vithal
Rajadhyaksha(4)
2,550,000
16.49
%
All
officers and directors as a group (3 people)
9,060,812
58.61
%
(1)
Unless
otherwise indicated, the address for each is c/o ImmunoBiotics, Inc., 1062
Calle Negocio, Suite C, San Clemente, CA92673
(2)
Mr.
Smith became the Chief executive Officer and President on May 14, 2009
when Mr. Lahey resigned from such positions. Mr. Lahey remains
in the position of Chairman of the Board
(3)
These
shares consist of 4,780,842 shares owned directly by Mr. Lahey, 1,000,000
shares owned by members in his immediate family and 50,000 shares owned by
entities and trusts controlled by Mr. Lahey
(4)
Mr.
Rajadhyaksha resigned as the Chief Financial Officer of the Company on May14, 2009 but remained as a Senior Vice President until August 10, 2009
when he resumed the title of Chief financial
Officer
6
Executive
Compensation
SUMMARY
COMPENSATION TABLE
The
following table sets forth the aggregate cash compensation paid during the 2007
and 2008 fiscal years to our Chief Executive Officer and to our other
compensated executive officers other than our CEO, for the applicable
years.
Name
and Principal Position
Year
Salary
($)
Bonus
($)
All
Other
Compensation
($)
Total
($)
Thomas
Lahey
2007
—
—
—
—
Chairman(1)
2008
$75,000
—
—
$
75,000
Vithal
Rajadhyaksha
Chief
Financial Officer(2)
—
—
—
—
—
—
—
—
—
—
(1)
Mr.
Lahey resigned as the Chief Executive Officer and President of the Company
on May 14, 2009 but continues to serve as the Chairman of the
Board
(2)
Mr.
Rajadhyaksha resigned as the Chief Financial Officer of the Company on May14, 2009 but remained as a Senior Vice President until August 10, 2009
when he resumed the title of Chief financial
Officer
Historically,
we paid no cash compensation to any Board member for serving on our Board of
Directors. Beginning in our 2008 fiscal year, providing reimbursement of
expenses incurred in attending Board meetings. No director who is an employee
will receive separate compensation for services rendered as a director. Our
directors are eligible to participate in the Plan and are eligible to receive
awards granted under the Plan.
BOARD
OF DIRECTORS’ RECOMMENDATION
AND
STOCKHOLDER APPROVAL
As of
August 5, 2009, our board of directors and stockholders holding a majority of
our voting power voted to authorize our board of directors to adopt the Plan. In
the absence of a meeting, the affirmative consent of holders of a majority of
the vote represented by our outstanding shares of common stock was required to
approve the Plan. Because holders of approximately 54.21% of our voting power
signed a written consent in favor of the Plan, we are authorized to adopt the
Plan.
The
information contained in this information statement constitutes the only notice
we will be providing stockholders.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except in
their capacity as stockholders, none of our officers, directors or any of their
respective affiliates has any interest in the adoption to the Plan.
7
FORWARD-LOOKING
STATEMENTS
This
information statement may contain certain “forward-looking” statements (as that
term is defined in the Private Securities Litigation Reform Act of 1995 or by
the U.S. Securities and Exchange Commission in its rules, regulations and
releases) representing our expectations or beliefs regarding our company. These
forward-looking statements include, but are not limited to, statements
concerning our operations, economic performance, financial condition, and
prospects and opportunities. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
“may,”“will,”“expect,”“believe,”“anticipate,”“intend,”“could,”“estimate,”“might,” or “continue” or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. These
statements, by their nature, involve substantial risks and uncertainties,
certain of which are beyond our control, and actual results may differ
materially depending on a variety of important factors, including factors
discussed in this and other of our filings with the U.S. Securities and Exchange
Commission.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the information and reporting requirements of the Securities Exchange
Act of 1934, as amended, and in accordance with the Securities Exchange Act, we
file periodic reports, documents, and other information with the Securities and
Exchange Commission relating to our business, financial statements, and other
matters. These reports and other information may be inspected and are available
for copying at the offices of the Securities and Exchange Commission, 100 F
Street, N.E., Washington, DC 20549. Our SEC filings are also available to the
public on the SEC’s website at http://www.sec.gov.
INCORPORATION
OF FINANCIAL INFORMATION
We
“incorporate by reference” into this Information Statement the information in
certain documents we file with the SEC, which means that we can disclose
important information to you by referring you to those documents. We incorporate
by reference into this information statement the following documents we have
previously filed with the SEC: our quarterly report on Form 10-Q for the
quarterly period ended March 31, 2009 and our Registration Statement on Form
S-1. You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
As we
obtained the requisite stockholder vote for the adoption of the Plan described
in this information statement upon delivery of written consents from the holders
of a majority of our outstanding shares of common stock, WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY. This information statement is
for informational purposes only. Please read this information statement
carefully.
8
IMMUNOBIOTICS,
INC.
2009
LONG TERM INCENTIVE PLAN
1. ESTABLISHMENT,
PURPOSE AND TYPES OF AWARDS
IMMUNOBIOTICS, INC.
hereby establishes the IMMUNOBIOTICS, INC. LONG TERM INCENTIVE PLAN (the
"Plan"). The purpose of the Plan is to promote the long-term growth and
profitability of ImmunoBiotics, Inc. (the "Corporation") by (i) providing key
people and consultants with incentives to improve stockholder value and to
contribute to the growth and financial success of the Corporation and (ii)
enabling the Corporation to attract, retain and reward the best available
persons for positions of substantial responsibility.
The Plan
permits the granting of stock options, including non-qualified stock options and
incentive stock options qualifying under Section 422 of the Code, in any
combination (collectively, "Options") and the granting of restricted
stock.
2. DEFINITIONS
Under
this Plan, except where the context otherwise indicates, the following
definitions apply:
(a)
"Board" shall mean the Board of Directors of the Corporation.
(b)
"Change in Control" shall mean (i) any sale, exchange or other disposition of
substantially all of the Corporation's assets; or (ii) any merger, share
exchange, consolidation or other reorganization or business combination in which
the Corporation is not the surviving or continuing corporation, or in which the
Corporation's stockholders become entitled to receive cash, securities of the
Corporation other than voting common stock, or securities of another
issuer.
(c)
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
regulations issued thereunder.
(d)
"Committee" shall mean the Board or committee of Board members appointed
pursuant to Section 3 of the Plan to administer the Plan.
(e)
"Common Stock" shall mean shares of the Corporation's common stock, $.001 par
value.
(f)
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g)
"Fair Market Value" of a share of the Corporation's Common Stock for any purpose
on a particular date shall be the last reported sale price per share of Common
Stock, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on a national securities exchange or
included for quotation on a system established by the National Association of
Securities Dealers, Inc. ( the “Nasdaq System”) , or if the Common Stock is not
so listed or admitted to trading or included for quotation, the last quoted
price, or if the Common Stock is not so quoted, the average of the high bid and
low asked prices, regular way, in the over-the-counter market, as reported by
the Nasdaq System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use or, if the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices, regular way, as furnished by a professional market maker making a market
in the Common Stock as selected in good faith by the Committee or by such other
source or sources as shall be selected in good faith by the Committee; and,
provided further, that in the case of incentive stock options, the determination
of Fair Market Value shall be made by the Committee in good faith in conformance
with the Treasury Regulations under Section 422 of the Code. If, as the case may
be, the relevant date is not a trading day, the determination shall be made as
of the next preceding trading day. As used herein, the term "trading day" shall
mean a day on which public trading of securities occurs and is reported in the
principal consolidated reporting system referred to above, or if the Common
Stock is not listed or admitted to trading on a national securities exchange or
included for quotation on the Nasdaq System, any day other than a Saturday, a
Sunday or a day in which banking institutions in the State of New York are
closed.
9
(h)
"Grant Agreement" shall mean a written agreement between the Corporation and a
grantee memorializing the terms and conditions of an award granted pursuant to
the Plan.
(i)
"Grant Date" shall mean the date on which the Committee formally acts to grant
an award to a grantee or such other date as the Committee shall so designate at
the time of taking such formal action.
(j)
"Parent" shall mean a corporation, whether now or hereafter existing, within the
meaning of the definition of "parent corporation" provided in Section 424(e) of
the Code, or any successor thereto of similar import.
(k) “Plan Awards” shall mean an award of options or restricted stock
as the Committee determines.
(l)
"Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act on the
effective date of the Plan, or any successor provision prescribing conditions
necessary to exempt the issuance of securities under the Plan (and further
transactions in such securities) from Section 16(b) of the Exchange
Act.
(m)
"Securities Act" shall mean the Securities Act of 1933, as amended.
(n)
"Subsidiary" and "Subsidiaries" shall mean only a corporation or corporations,
whether now or hereafter existing, within the meaning of the definition of
"subsidiary corporation" provided in Section 424(f) of the Code, or any
successor thereto of similar import.
3. ADMINISTRATION
(a)
Procedure. The Plan shall be administered by the Board. In the alternative, the
Board may appoint a Committee consisting of not less than two (2) members of the
Board to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members of
the Committee and, thereafter, directly administer the Plan. In the event that
the Board is the administrator of the Plan in lieu of a Committee, the term
"Committee" as used herein shall be deemed to mean the Board.
Members
of the Board or Committee who are either eligible for Plan Awards or have been
granted Plan Awards may vote on any matters affecting the administration of the
Plan or the grant of Plan Awards pursuant to the Plan, except that no such
member shall act upon the granting of a Plan Award to himself or herself, but
any such member may be counted in determining the existence of a quorum at any
meeting of the Board or the Committee during which action is taken with respect
to the granting of a Plan Award to him or her.
The
Committee shall meet at such times and places and upon such notice as it may
determine. A majority of the Committee shall constitute a quorum. Any acts by
the Committee may be taken at any meeting at which a quorum is present and shall
be by majority vote of those members entitled to vote. Additionally, any acts
reduced to writing or approved in writing by all of the members of the Committee
shall be valid acts of the Committee.
(b)
Rule 16b-3 Requirements. Unless the Board is acting as the Committee or the
Board specifically determines otherwise, the members of the Committee shall be
both "non-employee directors" within the meaning of Rule 16b-3, and "outside
directors" within the meaning of Section 162(m) of the Code. The Board shall
take all action necessary to cause the Plan to be administered in accordance
with the then effective provisions of Rule 16b-3, provided that any amendment to
the Plan required for compliance with such provisions shall be made in
accordance with Section 11 of the Plan.
(c)
Powers of the Committee. The Committee shall have all the powers vested in it by
the terms of the Plan, such powers to include authority, in its sole and
absolute discretion, to grant Plan Awards under the Plan, prescribe Grant
Agreements evidencing such Plan Awards and establish programs for granting Plan
Awards. The Committee shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to:
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(i)
determine
the eligible persons to whom, and the time or times at which Plan Awards
shall be granted,
(ii)
determine
the types of Plan Awards to be
granted,
(iii)
determine
the number of shares to be covered by each Plan
Awards,
(iv)
impose
such terms, limitations, restrictions and conditions upon any such Plan
Awards as the Committee shall deem
appropriate,
(v)
modify,
extend or renew outstanding Plan Awards, accept the surrender of
outstanding Plan Awards and substitute new Plan Awards, provided that no
such action shall be taken with respect to any outstanding Plan Awards
which would adversely affect the grantee without the grantee's consent,
and
(vi)
accelerate
or otherwise change the time in which a Plan Award may be exercised, in
whole or in part, including, but not limited to, any restriction or
condition with respect to the vesting or exercisability of a Plan Award
following termination of any grantee's
employment.
The
Committee shall have full power and authority to administer and interpret the
Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.
(d) Limited
Liability. To the maximum extent permitted by law, no member of the Committee
shall be liable for any action taken or decision made in good faith relating to
the Plan or any Plan Award thereunder.
(e) Indemnification.
To the maximum extent permitted by law, the members of the Committee shall be
indemnified by the Corporation in respect of all their activities under the
Plan.
(f) Effect
of Committee's Decision. All actions taken and decisions and determinations made
by the Committee on all matters relating to the Plan pursuant to the powers
vested in it hereunder shall be in the Committee's sole and absolute discretion
and shall be conclusive and binding on all parties concerned, including the
Corporation, its stockholders, any participants in the Plan and any other
employee of the Corporation, and their respective successors in
interest.
4. SHARES
AVAILABLE FOR THE PLAN: MAXIMUM AWARDS
Subject
to adjustments as provided in Section 10 of the Plan, the shares of stock that
may be delivered or purchased under the Plan, including with respect to
incentive stock options intended to qualify under Section 422 of the Code, shall
not exceed an aggregate of 10,000,000 shares of Common Stock of the Corporation.
The Corporation shall reserve said number of shares for Plan Awards to be
awarded under the Plan, subject to adjustments as provided in Section 10 of the
Plan. If any Plan Award, or portion of a Plan Award, under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, the shares subject to such
Plan Award shall thereafter be available for further Plan Awards under the Plan
unless such shares would not be deemed available for future Plan Awards pursuant
to Section 16 of the Exchange Act.
5. PARTICIPATION
Participation
in the Plan shall be open to all employees, officers, directors and consultants
of the Corporation, or of any Parent or Subsidiary of the Corporation, as may be
selected by the Committee from time to time. To the extent necessary to comply
with Rule 16b-3 or to constitute an "outside director" within the meaning of
Section 162(m) of the Code, and only in the event that Rule 16b-3 or Section
162(m) of the Code is applicable to the Plan or a Plan Award thereunder,
Committee members shall not be eligible to participate in the Plan while members
of the Committee.
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Awards
may be granted to such eligible persons and for or with respect to such number
of shares of Common Stock as the Committee shall determine, subject to the
limitations in Section 4 of the Plan. A grant of any type of Plan Award made in
any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Plan Award to such person in that
year or subsequent years.
6. STOCK
OPTIONS
Subject
to the other applicable provisions of the Plan, the Committee may from time to
time grant to eligible participants non-qualified stock options or incentive
stock options as that term is defined in Section 422 of the Code. The Options
granted shall be subject to the following terms and conditions.
(a) Grant
of Option. The grant of an Option shall be evidenced by a Grant Agreement,
executed by the Corporation and the grantee, stating the number of shares of
Common Stock subject to the Option evidenced thereby and the terms and
conditions of such Option, in such form as the Committee may from time to time
determine.
(b) Price.
The price per share payable upon the exercise of each Option ("exercise price")
shall be determined by the Committee; provided, however, that in the case of
incentive stock options, the exercise price shall not be less than 100% of the
Fair Market Value of the shares on the date the Option is granted.
(c) Payment.
Options may be exercised in whole or in part by payment of the exercise price of
the shares to be acquired in accordance with the provisions of the Grant
Agreement, and/or such rules and regulations as the Committee may have
prescribed, and/or such determinations, orders, or decisions as the Committee
may have made. Payment of the exercise price shall be made in cash (or cash
equivalents acceptable to the Committee) or by such other means as the Committee
may prescribe. The Corporation may make or guarantee loans to grantees to assist
grantees in exercising Options.
The
Committee, subject to such limitations as it may determine, may authorize
payment of the exercise price, in whole or in part, by delivery of a properly
executed exercise notice, together with irrevocable instructions, to: (i) a
brokerage firm designated by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
(d) Terms
of Options. The term during which each Option may be exercised shall be
determined by the Committee. In no event shall an Option be exercisable less
than six months or more than ten years from the date it is granted. In no event
shall an Option be exercisable prior to the date on which a registration
statement registering the common stock of the Corporation under the Securities
Act is declared effective by the Securities and Exchange
Commission. Prior to the exercise of the Option and delivery of the
shares certificates represented thereby, the grantee shall have none of the
rights of a stockholder with respect to any shares represented by an outstanding
Option.
(e) Restrictions
on Incentive Stock Options. The aggregate Fair Market Value (determined as of
the Grant Date) of shares of Common Stock with respect to which all incentive
stock options first become exercisable by any grantee in any calendar year under
this or another plan of the Corporation and its Parent and Subsidiary
corporations may not exceed $100,000 or such other amount as may be permitted
from time to time under Section 422 of the Code. To the extent that such
aggregate Fair Market Value shall exceed $100,000, or other applicable amount,
such Options (taking Options into account in the order in which they were
granted) shall be treated as non-qualified stock options. In such case, the
Corporation may designate the shares of Common Stock that are to be treated as
stock acquired pursuant to the exercise of an incentive stock option by issuing
a separate certificate for such shares and identifying the certificate as
incentive stock option shares in the stock transfer records of the
Corporation.
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The
exercise price of any incentive stock option granted to a grantee who owns
(within the meaning of Section 422(b)(6) of the Code, after the application of
the attribution rules in Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of shares of the Corporation or its Parent
or Subsidiary corporations (within the meaning of Sections 422 and 424 of the
Code) shall be not less than 110% of the Fair Market Value of the Common Stock
on the grant date and the term of such Option shall not exceed five
years.
(f) Other
Terms and Conditions. Options may contain such other provisions, not
inconsistent with the provisions of the Plan, as the Committee shall determine
appropriate from time to time. No Option shall be an incentive stock option
unless so designated by the Committee at the time of grant or in the Grant
Agreement evidencing such Option.
7. RESTRICTED
STOCK
Subject
to the other applicable provisions of the Plan, the Committee may from time to
time grant to eligible participants shares of restricted stock. The restricted
stock granted shall be subject to the following terms and
conditions.
(a) Grant of
Restricted Stock Award. The Committee shall from time to time in its
sole discretion select which eligible persons shall be awarded restricted stock,
determine the purchase price and form of payment for restricted stock and any
other terms and conditions applicable to restricted stock consistent with this
Plan. Upon selection of a participant to be awarded restricted stock,
the Committee shall instruct the Secretary of the Corporation to issue a
certificate representing such restricted stock and may impose such conditions
upon issuance of restricted stock as it deems appropriate.
(b) Agreement. The
restricted stock shall be granted pursuant to a Grant Agreement in form and
having such terms as approved by the Committee.
(c) Restriction. All
restricted stock is subject to restriction as the Committee shall provide, which
may include restrictions concerning voting rights, transferability and
restriction based upon employment or performance provided that the Committee my
remove any restrictions upon such terms and conditions as it deems
appropriate.
(d) Transferability.
Restricted stock may not be transferred, sold or encumbered until all
restrictions terminate or expire.
(e)
Section 162(m) performance restrictions. For purposes of qualifying
grants of restricted stock as "performance-based compensation" under
Section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of performance goals. The performance
goals shall be set by the Committee on or before the latest date permissible to
enable the restricted stock to qualify as "performance-based compensation" under
Section 162(m) of the Code. In granting restricted stock which is intended
to qualify under Section 162(m) of the Code, the Committee shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the restricted stock under Section 162(m) of the
Code (e.g., in determining the performance goals).
(f)
Legend on Certificates. The Committee, in its discretion, may legend the
certificates representing restricted stock to give appropriate notice of such
restrictions.
(g)
Termination of Employment. Except as otherwise
expressly provided for herein or in the applicable restricted stock agreement,
any shares of restricted stock which are subject to restriction at the time of
an employee's termination of employment with the Corporation for any reason, or
when a director's service as director of the Company ends or when a consulting
arrangement terminates, as applicable, shall be forfeited upon such termination
and the participant shall have no further rights to or with respect to such
shares. In the event of special hardship circumstances of a participant whose
employment is involuntarily terminated (other than for Cause), the Committee
may, in it sole discretion, waive in whole or in part any or all remaining
restrictions with respect to such participant’s shares of restricted
stock.
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(h)
Escrow; Rights as a Stockholder. The Secretary of the
Corporation or such other escrow holder as the Committee may appoint shall
retain physical custody of each certificate representing restricted stock until
all of the restrictions imposed under the restricted stock agreement with
respect to the shares evidenced by such certificate expire or shall have been
removed. While such shares are held by the escrow holder, the participant shall
have, unless otherwise provided by the Committee and subject to the provisions
of this Section , all the rights of a stockholder with respect to said
shares, subject to any restrictions among other shareholders of common stock,
including the right to receive all dividends and other distributions paid or
made with respect to the shares represented by such certificate; provided,
however, that in the discretion of the Committee, any extraordinary
distributions with respect to the Common Stock shall be subject to the
restrictions set forth in this Section.
(i)Return
of Restricted Stock to Corporation. On the date set forth in the
applicable restricted stock agreement, the restricted stock for which
restrictions have not lapsed shall revert to the Corporation and again shall
become available for grant under the Plan.
8. WITHHOLDING
OF TAXES
The
Corporation may require, as a condition to any exercise of an Option under the
Plan, that the grantee pay to the Corporation, in cash, any federal,
state or local taxes of any kind required by law to be withheld with respect to
any issuance, vesting or exercise of any Plan Award (hereinafter referred to as
a “taxable event”) under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such
taxes.
9. TRANSFERABILITY
To
the extent required to comply with Rule 16b-3, and in any event in the case of
an incentive stock option, no Option granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Option may be exercised
during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or legal
representative.
10. ADJUSTMENTS;
BUSINESS COMBINATIONS
In
the event of a reclassification, recapitalization, stock split, stock dividend,
combination of shares, or other similar event, the maximum number and kind of
shares reserved for issuance or with respect to which Options may be granted
under the Plan shall be adjusted to reflect such event, and the Committee shall
make such adjustments as it deems appropriate and equitable in the number, kind
and price of shares covered by outstanding Options made under the Plan, and in
any other matters which relate to Options and which are affected by the changes
in the Common Stock referred to above. Any adjustment in Incentive Stock Options
under this Section 10 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 10 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. Further, with respect to Plan Awards intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee
determines that such adjustments or substitutions may be made without causing
the Corporation to be denied a tax deduction on account of Section 162(m)
of the Code. The Corporation shall give each participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes
14
In
the event of any proposed Change in Control, the Committee shall take such
action as it deems appropriate to effectuate the purposes of this Plan and to
protect the grantees of Plan Awards, which action may include, but without
limitation, any one or more of the following: (i) acceleration or change of the
exercise dates or vesting of any Plan Awards and terminate the restrictions
applicable to Restricted Stock; (ii) arrangements with grantees for the payment
of appropriate consideration to them for the cancellation and surrender of any
Plan Awards; and (iii) in any case where equity securities other than Common
Stock of the Corporation are proposed to be delivered in exchange for or with
respect to Common Stock of the Corporation, arrangements providing that any Plan
Awards shall become one or more Plan Awards with respect to such other equity
securities. Notwithstanding anything to the contrary, in the event of a Change
in Control, any outstanding option that is not assumed or continued, or an
equivalent option or right is not substituted therefor pursuant to the change in
control transaction’s governing document, shall become fully vested and
exercisable immediately prior to the effective date of such change in control
and shall expire upon the effective date of such change in control and all
restrictions applicable to restricted stock shall terminate.
In
the event the Corporation dissolves and liquidates (other than pursuant to a
plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant Agreement (i) each grantee shall
have the right to exercise his Plan Award at any time up to ten days prior to
the effective date of such liquidation and dissolution; and (ii) the Committee
may make arrangements with the grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any Plan Award that
is so canceled or surrendered at any time up to ten days prior to the effective
date of such liquidation and dissolution. The Committee may establish a
different period (and different conditions) for such exercise, cancellation, or
surrender to avoid subjecting the grantee to liability under Section 16(b) of
the Exchange Act. Any Plan Award not so exercised, canceled, or surrendered
shall terminate on the last day for exercise prior to such effective
date.
11. TERMINATION
AND MODIFICATION OF THE PLAN
The
Board, without further approval of the stockholders, may modify or terminate the
Plan, except that no modification shall become effective without prior approval
of the stockholders of the Corporation if stockholder approval would be required
for continued compliance with Rule 16b-3.
The
Committee shall be authorized to make minor or administrative modifications to
the Plan as well as modifications to the Plan that may be dictated by
requirements of federal or state laws applicable to the Corporation or that may
be authorized or made desirable by such laws. The Committee may amend or modify
the grant of any outstanding Plan Award in any manner to the extent that the
Committee would have had the authority to make such Plan Award as so modified or
amended. No modification may be made that would materially adversely affect any
Plan Award previously made under the Plan without the approval of the
grantee.
12. NON-GUARANTEE
OF EMPLOYMENT
Nothing
in the Plan or in any Grant Agreement thereunder shall confer any right on an
employee to continue in the employ of the Corporation or shall interfere in any
way with the right of the Corporation to terminate an employee at any
time.
13. TERMINATION
OF EMPLOYMENT
For
purposes of maintaining a grantee's continuous status as an employee and accrual
of rights under any Plan Awards, transfer of an employee among the Corporation
and the Corporation's Parent or Subsidiaries shall not be considered a
termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.
14. WRITTEN
AGREEMENT
Each
Grant Agreement entered into between the Corporation and a grantee with respect
to a Plan Award granted under the Plan shall incorporate the terms of this Plan
and shall contain such provisions, consistent with the provisions of the Plan,
as may be established by the Committee.
15
15. NON-UNIFORM
DETERMINATIONS
The
Committee's determinations under the Plan (including, without limitation,
determinations of the persons to receive Plan Awards, the form, amount and
timing of such Plan Awards, the terms and provisions of such Plan Awards and the
agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Plan Awards
under the Plan, whether or not such persons are similarly situated.
16. LIMITATION
ON BENEFITS
With
respect to persons subject to Section 16 of the Exchange Act, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3.
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 and
deemed advisable by the Committee.
17. LISTING
AND REGISTRATION
If
the Corporation determines that the listing, registration or qualification upon
any securities exchange or upon any Nasdaq system or under any law, of shares
subject to any Plan Award is necessary or desirable as a condition of, or in
connection with, the granting of same or the issue or purchase of shares
thereunder, no such Plan Award may be exercised in whole or in part and no
restrictions on such Plan Award shall lapse, unless such listing, registration
or qualification is effected free of any conditions not acceptable to the
Corporation.
18. COMPLIANCE
WITH SECURITIES LAWS
The
Corporation may require that a grantee, as a condition to exercise of an Plan
Award, and as a condition to the delivery of any share certificate, provide to
the Corporation, at the time of each such exercise and each such delivery, a
written representation that the shares of Common Stock being acquired shall be
acquired by the grantee solely for investment and will not be sold or
transferred without registration or the availability of an exemption from
registration under the Securities Act and applicable state securities laws. The
Corporation may also require that a grantee submit other written representations
which will permit the Corporation to comply with federal and applicable state
securities laws in connection with the issuance of the Common Stock, including
representations as to the knowledge and experience in financial and business
matters of the grantee and the grantee's ability to bear the economic risk of
the grantee's investment. The Corporation may require that the grantee obtain a
"purchaser representative" as that term is defined in applicable federal and
state securities laws. The stock certificates for any shares of Common Stock
issued pursuant to this Plan may bear a legend restricting transferability of
the shares of Common Stock unless such shares are registered or an exemption
from registration is available under the Securities Act and applicable state
securities laws. The Corporation may notify its transfer agent to stop any
transfer of shares of Common Stock not made in compliance with these
restrictions. Common Stock shall not be issued with respect to a Plan Award
granted under the Plan unless the exercise of such Plan Award and the issuance
and delivery of share certificates for such Common Stock pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any national securities exchange or Nasdaq
system upon which the Common Stock may then be listed or quoted, and shall be
further subject to the approval of counsel for the Corporation with respect to
such compliance to the extent such approval is sought by the
Committee.
19. GOVERNING
LAW
The
validity, construction and effect of the Plan, of Grant Agreements entered into
pursuant to the Plan, and of any rules, regulations, determinations or decisions
made by the Board or Committee relating to the Plan or such Grant Agreements,
and the rights of any and all persons having or claiming to have any interest
therein or thereunder, shall be determined exclusively in accordance with
applicable federal laws and the laws of the State of Florida, without regard to
its conflict of laws rules and principles.
The
Plan is effective as of August 5, 2009, the date on which the Plan was adopted
by the Board, subject to approval of the stockholders within twelve months of
such date. Unless previously terminated, the Plan shall terminate on the close
of business on August 4, 2019, ten years from the effective date. Subject to
other applicable provisions of the Plan, all Plan Awards granted under the Plan
prior to termination of the Plan shall remain in effect until such Plan Awards
have been satisfied or terminated in accordance with the Plan and the terms of
such Plan Awards.
17
Dates Referenced Herein and Documents Incorporated by Reference