Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10QSB Quarterly Report 14 80K
2: EX-3.4 Amendment to Bylaws 1 6K
3: EX-10.1 2002 Employee, Stock Option Plan 14± 55K
4: EX-10.2 Employment Agreement 12 52K
5: EX-99.1 Miscellaneous Exhibit 1 7K
6: EX-99.2 Unaudited Pro Forma Consolidated Statements 2 15K
EX-10.1 — 2002 Employee, Stock Option Plan
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EXHIBIT 10.1
LIL MARC, INC.
2002 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
1. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Lil Marc, Inc. 2002 Employee, Director and
Consultant Stock Option Plan, have the following meanings:
Administrator means the Board of Directors, unless it has delegated
power to act on its behalf to the Committee, in which case the
Administrator means the Committee.
Affiliate means a corporation which, for purposes of Section 424 of the
Code, is a parent or subsidiary of the Company, direct or indirect.
Board of Directors means the Board of Directors of the Company.
Code means the United States Internal Revenue Code of 1986, as amended.
Committee means the committee of the Board of Directors to which the
Board of Directors has delegated power to act under or pursuant to the
provisions of the Plan.
Common Stock means shares of the Company's common stock, $0.01 par
value per share.
Company means Lil Marc, Inc., a Nevada corporation.
Disability or Disabled means permanent and total disability as defined
in Section 22(e)(3) of the Code.
Employee means any employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by
the Administrator to be eligible to be granted one or more Options
under the Plan.
Fair Market Value of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are regularly
reported for the Common Stock, the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting system for
the trading day immediately preceding the applicable date;
(2) If the Common Stock is not traded on a national securities exchange
but is traded on the over-the-counter market, if sales prices are not
regularly reported for the Common Stock for the trading day referred to
in clause (1), and if bid and asked prices for the Common Stock are
regularly reported, the mean between the bid and the asked price for
the Common Stock at the close of trading in the over-the-counter market
for the trading day on which Common Stock was traded immediately
preceding the applicable date; and
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as the
Administrator, in good faith, shall determine.
ISO means an option meant to qualify as an incentive stock option under
Section 422 of the Code.
Non-Qualified Option means an option which is not intended to qualify
as an ISO.
Option means an ISO or Non-Qualified Option granted under the Plan.
Option Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
Participant means an Employee, director or consultant of the Company or
an Affiliate to whom one or more Options are granted under the Plan. As
used herein, "Participant" shall include "Participant's Survivors"
where the context requires.
Plan means this Lil Marc, Inc. 2002 Employee, Director and Consultant
Stock Option Plan.
Shares means shares of the Common Stock as to which Options have been
or may be granted under the Plan or any shares of capital stock into
which the Shares are changed or for which they are exchanged within the
provisions of Paragraph 3 of the Plan. The Shares issued upon exercise
of Options granted under the Plan may be authorized and unissued shares
or shares held by the Company in its treasury, or both.
Survivor means a deceased Participant's legal representatives and/or
any person or persons who acquired the Participant's rights to an
Option by will or by the laws of descent and distribution.
2. PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Employees and directors
of and certain consultants to the Company in order to attract such people, to
induce them to work for the benefit of the Company or of an Affiliate and to
provide additional incentive for them to promote the success of the Company or
of an Affiliate. The Plan provides for the granting of ISOs and Non-Qualified
Options.
3. SHARES SUBJECT TO THE PLAN.
The number of Shares which may be issued from time to time pursuant to this Plan
shall be 3,500,000, or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 16 of the Plan.
If an Option ceases to be "outstanding", in whole or in part, the Shares which
were subject to such Option shall be available for the granting of other Options
under the Plan. Any Option shall be treated as "outstanding" until such Option
is exercised in full, or terminates or expires under the provisions of the Plan,
or by agreement of the parties to the pertinent Option Agreement.
4. ADMINISTRATION OF THE PLAN.
The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:
a. Interpret the provisions of the Plan or of any Option or Option
Agreement and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;
b. Determine which employees of the Company or of an Affiliate shall be
designated as Employees and which of the Employees, directors and
consultants shall be granted Options;
c. Specify the terms and conditions upon which an Option or Options may
be granted; and
d. Adopt any sub-plans applicable to residents of any specified
jurisdiction as it deems necessary or appropriate in order to comply
with or take advantage of any tax laws applicable to the Company or to
Plan Participants or to otherwise facilitate the administration of the
Plan, which sub-plans may include additional restrictions or conditions
applicable to Options or Shares acquired upon exercise of Options.
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.
5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be an Employee, director or
consultant of the Company or of an Affiliate at the time an Option is granted.
Notwithstanding the foregoing, the Administrator may authorize the grant of an
Option to a person not then an employee, director or consultant of the Company
or of an Affiliate; provided, however, that the actual grant of such Option
shall be conditioned upon such person becoming eligible to become a Participant
at or prior to the time of the execution of the Option Agreement evidencing such
Option. ISOs may be granted only to Employees. Non-Qualified Options may be
granted to any Employee, director or consultant of the Company or an Affiliate.
The granting of any Option to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in any other grant
of Options.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly executed
by the Company and, to the extent required by law or requested by the Company,
by the Participant. The Administrator may provide that Options be granted
subject to such terms and conditions, consistent with the terms and conditions
specifically required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:
A. Non-Qualified Options: Each Option intended to be a Non-Qualified
Option shall be subject to the terms and conditions which the
Administrator determines to be appropriate and in the best interest of
the Company, subject to the following minimum standards for any such
Non-Qualified Option:
a. Option Price: Each Option Agreement shall state the option price
(per share) of the Shares covered by each Option, which option price
shall be determined by the Administrator but shall not be less than
the par value of the Common Stock.
b. Each Option Agreement shall state the number of Shares to which it
pertains;
c. Each Option Agreement shall state the date or dates on which it
first is exercisable and the date after which it may no longer be
exercised, and may provide that the Option rights accrue or become
exercisable in installments over a period of months or years, or upon
the occurrence of certain conditions or the attainment of stated goals
or events; and
d. Exercise of any Option may be conditioned upon the Participant's
execution of a Share purchase agreement in form satisfactory to the
Administrator providing for certain protections for the Company and
its other shareholders, including requirements that:
i. The Participant's or the Participant's Survivors' right to
sell or transfer the Shares may be restricted; and
ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and must also
acknowledge that the Shares will bear legends noting any
applicable restrictions.
B. ISOs: Each Option intended to be an ISO shall be issued
only to an Employee and be subject to the following terms and
conditions, with such additional restrictions or changes as
the Administrator determines are appropriate but not in
conflict with Section 422 of the Code and relevant regulations
and rulings of the Internal Revenue Service:
a. Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph
6(A) above, except clause (a) thereunder.
b. Option Price: Immediately before the ISO is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:
i. 10% or less of the total combined voting power of all
classes of stock of the Company or an Affiliate, the Option
price per share of the Shares covered by each ISO shall not be
less than 100% of the Fair Market Value per share of the
Shares on the date of the grant of the Option; or
ii. More than 10% of the total combined voting power of all
classes of stock of the Company or an Affiliate, the Option
price per share of the Shares covered by each ISO shall not be
less than 110% of the said Fair Market Value on the date of
grant.
c. Term of Option: For Participants who own:
i. 10% or less of the total combined voting power of all
classes of stock of the Company or an Affiliate, each ISO
shall terminate not more than ten years from the date of the
grant or at such earlier time as the Option Agreement may
provide; or
ii. More than 10% of the total combined voting power of all
classes of stock of the Company or an Affiliate, each ISO
shall terminate not more than five years from the date of the
grant or at such earlier time as the Option Agreement may
provide.
d. Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of ISOs which may become exercisable in
any calendar year (under this or any other ISO plan of the
Company or an Affiliate) so that the aggregate Fair Market
Value (determined at the time each ISO is granted) of the
stock with respect to which ISOs are exercisable for the first
time by the Participant in any calendar year does not exceed
$100,000.
7. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company or its designee, together with provision for
payment of the full purchase price in accordance with this Paragraph for the
Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Option Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Option Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Administrator, through delivery of shares of Common Stock
having
a Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option and held for at least six months, or (c)
at the discretion of the Administrator, by delivery of the grantee's
personal note, for full, partial or no recourse, bearing interest
payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, with or
without the pledge of such Shares as collateral, or (d) at the
discretion of the Administrator, in accordance with a cashless exercise
program established with a securities brokerage firm, and approved by
the Administrator, or (e) at the discretion of the Administrator, by
any combination of (a), (b), (c) and (d) above. Notwithstanding the
foregoing, the Administrator shall accept only such payment on exercise
of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which such
Option was exercised to the Participant (or to the Participant's Survivors, as
the case may be). In determining what constitutes "reasonably promptly," it is
expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without
limitation, state securities or "blue sky" laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be evidenced by an appropriate certificate or certificates
for fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise of any
installment of any Option; provided that the Administrator shall not accelerate
the exercise date of any installment of any Option granted to any Employee as an
ISO (and not previously converted into a Non-Qualified Option pursuant to
Paragraph 19) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in Paragraph 6.B.d.
The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator determines whether such amendment would constitute a
"modification" of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder
of such ISO.
8. RIGHTS AS A SHAREHOLDER.
No Participant to whom an Option has been granted shall have rights as a
shareholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.
9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
By its terms, an Option granted to a Participant shall not be transferable by
the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as approved by the Administrator in its discretion and set
forth in the applicable Option Agreement. Notwithstanding the foregoing, an ISO
transferred except in compliance with clause (i) above shall no longer qualify
as an ISO. The designation of a beneficiary of an Option by a Participant, with
the prior approval of the Administrator and in such form as the Administrator
shall prescribe, shall not be deemed a transfer prohibited by this Paragraph.
Except as provided above, an Option shall be exercisable, during the
Participant's lifetime, only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.
10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY.
Except as otherwise provided in a Participant's Option Agreement, in the event
of a termination of service (whether as an employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised an Option,
the following rules apply:
a. A Participant who ceases to be an employee, director or consultant
of the Company or of an Affiliate (for any other reason than
termination "for cause", Disability, or death for which events there
are special rules in Paragraphs 11, 12, and 13, respectively), may
exercise any Option granted to him or her to the extent that the Option
is exercisable on the date of such termination of service, but only
within such term as the Administrator has designated in a Participant's
Option Agreement.
b. Except as provided in Subparagraph (c) below, or Paragraph 12 or 13,
in no event may an Option intended to be an ISO, be exercised later
than ninety (90) days after the Participant's termination of
employment.
c. The provisions of this Paragraph, and not the provisions of
Paragraph 12 or 13, shall apply to a Participant who subsequently
becomes Disabled or dies after the termination of employment, director
status or consultancy, provided, however, in the case of a
Participant's Disability or death within ninety (90) days after the
termination of employment, director status or consultancy, the
Participant or the Participant's Survivors may exercise the Option
within one year after the date of the Participant's termination of
service, but in no event after the date of expiration of the term of
the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to a
Participant's termination of employment, termination of director status
or termination of consultancy, but prior to the exercise of an Option,
the Board of Directors determines that, either prior or subsequent to
the Participant's termination, the Participant engaged in conduct which
would constitute "cause", then such Participant shall forthwith cease
to have any right to exercise any Option.
e. A Participant to whom an Option has been granted under the Plan who
is absent from work with the Company or with an Affiliate because of
temporary disability (any disability other than a permanent and total
Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have terminated
such Participant's employment, director status or consultancy with the
Company or with an Affiliate, except as the Administrator may otherwise
expressly provide.
f. Except as required by law or as set forth in a Participant's Option
Agreement, Options granted under the Plan shall not be affected by any
change of a Participant's status within or among the Company and any
Affiliates, so long as the Participant continues to be an employee,
director or consultant of the Company or any Affiliate.
11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in a Participant's Option Agreement, the following
rules apply if the Participant's service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated "for cause" prior to
the time that all his or her outstanding Options have been exercised:
a. All outstanding and unexercised Options as of the time the
Participant is notified his or her service is terminated "for cause"
will immediately be forfeited.
b. For purposes of this Plan, "cause" shall include (and is not limited
to) dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or similar agreement between the
Participant and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or any Affiliate. The
determination of the Administrator as to the existence of "cause" will
be conclusive on the Participant and the Company.
c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service but prior to the exercise of an Option, that either prior or
subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause," then the right to exercise any
Option is forfeited.
d. Any definition in an agreement between the Participant and the
Company or an Affiliate, which contains a conflicting definition of
"cause" for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to that Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant's Option Agreement, a Participant
who ceases to be an employee, director or consultant of the Company or of an
Affiliate by reason of Disability may exercise any Option granted to such
Participant:
a. To the extent that the Option has become exercisable but has not
been exercised on the date of Disability; and
b. In the event rights to exercise the Option accrue periodically, to
the extent of a pro rata portion through the date of Disability of any
additional vesting rights that would have accrued on the next vesting
date had the Participant not become Disabled. The proration shall be
based upon the number of days accrued in the current vesting period
prior to the date of Disability.
A Disabled Participant may exercise such rights only within the period ending
one year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.
The Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.
13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in a Participant's Option Agreement, in the event
of the death of a Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate, such Option may be exercised by
the Participant's Survivors:
a. To the extent that the Option has become exercisable but has not
been exercised on the date of death; and
b. In the event rights to exercise the Option accrue periodically, to
the extent of a pro rata portion through the date of death of any
additional vesting rights that would have accrued on the next vesting
date had the Participant not died. The proration shall be based upon
the number of days accrued in the current vesting period prior to the
Participant's date of death.
If the Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one year after the date of death
of such Participant, notwithstanding that the decedent might have been able to
exercise the Option as to some or all of the Shares on a later date if he or she
had not died and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the Option.
14. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:
a. The person(s) who exercise(s) such Option shall warrant to the
Company, prior to the receipt of such Shares, that such person(s) are
acquiring such Shares for their own respective accounts, for
investment, and not with a view to, or for sale in connection with, the
distribution of any such Shares, in which event the person(s) acquiring
such Shares shall be bound by the provisions of the following legend
which shall be endorsed upon the certificate(s) evidencing their Shares
issued pursuant to such exercise or such grant:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall
have been compliance with all applicable state securities laws."
b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be issued upon
such particular exercise in compliance with the 1933 Act without
registration thereunder.
15. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options granted under
this Plan which as of such date shall not have been exercised will terminate and
become null and void; provided, however, that if the rights of a Participant or
a Participant's Survivors have not otherwise terminated and expired, the
Participant or the Participant's Survivors will have the right immediately prior
to such dissolution or liquidation to exercise any Option to the extent that the
Option is exercisable as of the date immediately prior to such dissolution or
liquidation.
16. ADJUSTMENTS.
Upon the occurrence of any of the following events, a Participant's rights with
respect to any Option granted to him or her hereunder which has not previously
been exercised in full shall be adjusted as hereinafter provided, unless
otherwise specifically provided in the Participant's Option Agreement:
A. Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Option shall be appropriately increased or decreased
proportionately and appropriate adjustments shall be made in the purchase price
per share to reflect such events. If additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock deliverable upon the exercise of such Option may be appropriately
increased or decreased proportionately and appropriate adjustments may be made
in the purchase price per share to reflect such events.
B. Corporate Transactions. If the Company is to be consolidated with or acquired
by another entity in a merger, sale of all or substantially all of the Company's
assets other than a transaction to merely change the state of incorporation (a
"Corporate Transaction"), the Administrator or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make appropriate provision
for the continuation of such Options by substituting on an equitable basis for
the Shares then subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or
(ii) upon written notice to the Participants, provide that all Options must be
exercised (either to the extent then exercisable or, at the discretion of the
Administrator or, upon a change of control of the Company, all Options being
made fully exercisable for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which period the
Options shall terminate; or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the Fair Market Value of the Shares subject to
such Options (either to the extent then exercisable or, at the discretion of the
Administrator, all Options being made fully exercisable for purposes of this
Subparagraph) over the exercise price thereof.
C. Recapitalization or Reorganization. In the event of a recapitalization or
reorganization of the Company other than a Corporate Transaction pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, a Participant upon exercising
an Option after the recapitalization or reorganization shall be entitled to
receive for the purchase price paid upon such exercise the number of replacement
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any adjustments made
pursuant to Subparagraph A, B or C above with respect to ISOs shall be made only
after the Administrator determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Administrator determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.
17. ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to Options. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.
18. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person exercising
such right shall receive from the Company cash in lieu of such fractional shares
equal to the Fair Market Value thereof.
19. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
20. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment taxes,
Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts
are required by applicable law or governmental regulation to be withheld from
the Participant's salary, wages or other remuneration in connection with the
exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
21), the Company may withhold from the Participant's compensation, if any, or
may require that the Participant advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the
statutory minimum amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law). For
purposes hereof, the fair market value of the shares withheld for purposes of
payroll withholding shall be determined in the manner provided in Paragraph 1
above, as of the most recent practicable date prior to the date of exercise. If
the fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance the difference
in cash to the Company or the Affiliate employer. The Administrator in its
discretion may condition the exercise of an Option for less than the then Fair
Market Value on the Participant's payment of such additional withholding.
21. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a Disqualifying Disposition of any shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
defined in Section 424(c) of the Code and includes any disposition (including
any sale or gift) of such shares before the later of (a) two years after the
date the Employee was granted the ISO, or (b) one year after the date the
Employee acquired Shares by exercising the ISO, except as otherwise provided in
Section 424(c) of the Code. If the Employee has died before such stock is sold,
these holding period requirements do not apply and no Disqualifying Disposition
can occur thereafter.
22. TERMINATION OF THE PLAN.
The Plan will terminate on July 3, 2012, the date which is ten years from the
earlier of the date of its adoption by the Board of Directors and the date of
its approval by the shareholders. The Plan may be terminated at an earlier date
by vote of the shareholders or the Board of Directors of the Company; provided,
however, that any such earlier termination shall not affect any Option
Agreements executed prior to the effective date of such termination.
23. AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the shareholders of the Company. The Plan may also be
amended by the Administrator, including, without limitation, to the extent
necessary to qualify any or all outstanding Options granted under the Plan or
Options to be granted under the Plan for favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code, and to the extent necessary to
qualify the shares issuable upon exercise of any outstanding Options granted, or
Options to be granted, under the Plan for listing on any national securities
exchange or quotation in any national automated quotation system of securities
dealers. Any amendment approved by the Administrator which the Administrator
determines is of a scope that requires shareholder approval shall be subject to
obtaining such shareholder approval. Any modification or amendment of the Plan
shall not, without the consent of a Participant, adversely affect his or her
rights under an Option previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Option Agreements
in a manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant.
24. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.
25. GOVERNING LAW.
This Plan shall be construed and enforced in accordance with the law of the
State of Nevada.
Dates Referenced Herein
This ‘10QSB’ Filing | | Date | | Other Filings |
---|
| | |
| | 7/3/12 | | None on these Dates |
Filed on: | | 11/14/02 |
For Period End: | | 9/30/02 |
| List all Filings |
2 Subsequent Filings that Reference this Filing
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