MARKLAND TECHNOLOGIES, INC.
2004 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS.
(a) The name of the plan is the Markland Technologies, Inc. 2004 Stock
Incentive Plan (the "PLAN"). The purpose of the Plan is to encourage and enable
officers and employees of, and other persons providing services to, Markland
Technologies, Inc. (the "COMPANY") and its Affiliates to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company and its shareholders, thereby
stimulating their efforts on the Company's behalf and strengthening their desire
to remain with the Company.
The following terms shall be defined as set forth below:
"AFFILIATE" means a parent corporation, if any, and each subsidiary
corporation of the Company, as those terms are defined in Section 424 of the
"AWARD" or "AWARDS", except where referring to a particular category of
grant under the Plan, includes Incentive Stock Options, Non-Statutory Stock
Options, Restricted Stock Awards, Unrestricted Stock Awards, Performance Share
Awards and Stock Appreciation Rights. Awards shall be evidenced by a written
agreement (which may be in electronic form and may be electronically
acknowledged and accepted by the recipient) containing such terms and conditions
not inconsistent with the provisions of this Plan as the Committee shall
"BOARD" means the Board of Directors of the Company.
"CAUSE" means, with respect to any Award holder, a determination by the
Company (including the Board) or any Affiliate that the Holder's employment or
other relationship with the Company or any such Affiliate should be terminated
as a result of (i) a material breach by the Award holder of any agreement to
which the Award holder and the Company (or any such Affiliate) are parties, (ii)
any act (other than retirement) or omission to act by the Award holder that may
have a material and adverse effect on the business of the Company, such
Affiliate or any other Affiliate or on the Award holder's ability to perform
services for the Company or any such Affiliate, including, without limitation,
the proven or admitted commission of any crime (other than an ordinary traffic
violation), or (iii) any material misconduct or material neglect of duties by
the Award holder in connection with the business or affairs of the Company or
any such Affiliate.
"CHANGE OF CONTROL" has the meaning set forth in Section 15(b).
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" has the meaning set forth in Section 2.
"COMPANY" has the meaning set forth in Section 1(a).
"DISABILITY" means disability as set forth in Section 22(e)(3) of the
"EFFECTIVE DATE" means the date on which the Plan is approved by the
Board of Directors as set forth in Section 17.
"ELIGIBLE PERSON" has the meaning set forth in Section 4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" on any given day means the closing price per share
of the Stock on such day on all securities exchanges on which such security may
at the time be listed, or if the Stock is not listed, the closing price quoted
by Nasdaq, or, if the Stock is not quoted by Nasdaq, the average of the highest
bid and lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization; PROVIDED, that (i) if there is no trading on such date,
Fair Market Value shall be deemed to be the closing price per share on the last
preceding date on which the Stock was traded (PROVIDED, that the Committee shall
not have determined that a material event has occurred since such date) and (ii)
if the Stock is not listed, quoted or reported, the Fair Market Value of the
Stock shall be determined in good faith by the Committee.
"INCENTIVE STOCK OPTION" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"INDEPENDENT DIRECTOR" means any director who meets the independence
requirement of the listing requirements applicable to the Stock, if any.
"MATURE SHARES" has the meaning set forth in Section 5(d)(i).
"NON-EMPLOYEE DIRECTOR" means any director who: (i) is not currently an
officer of the Company or an Affiliate, or otherwise currently employed by the
Company or an Affiliate, (ii) does not receive compensation, either directly or
indirectly, from the Company or an Affiliate, for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Rule 404(a) of Regulation S-K promulgated by the SEC, (iii) does not
possess an interest in any other transaction for which disclosure would be
required pursuant to Rule 404(a) of Regulation S-K, and (iv) is not engaged in a
business relationship for which disclosure would be required pursuant to Rule
404(b) of Regulation S-K.
"NON-STATUTORY STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
"NORMAL RETIREMENT" means retirement in good standing from active
employment with the Company and its Affiliates in accordance with the retirement
policies of the Company and its Affiliates then in effect.
"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
"OUTSIDE DIRECTOR" means any director who is an "Outside Director"
under section 1.162-27(e)(3)(i) of the Treasury Regulations.
"PERFORMANCE SHARE AWARD" means an Award pursuant to Section 8.
"PLAN" has the meaning set forth in Section 1(a).
"REQUEST" has the meaning set forth in Section 9.
"RESTRICTED STOCK" has the meaning set forth in Section 6(a).
"RESTRICTED STOCK AWARD" means an Award granted pursuant to Section 6.
"SEC" means the Securities and Exchange Commission or any successor
"STOCK" means the common stock, $0.0001 par value per share, of the
Company, subject to adjustments pursuant to Section 3.
"STOCK APPRECIATION RIGHT" means an Award granted pursuant to Section
"UNRESTRICTED STOCK" has the meaning set forth in Section 7(a).
"UNRESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS.
(a) COMMITTEE. The Plan shall be administered by a committee of the
Board (the "COMMITTEE") consisting of not less than two (2) persons each of whom
qualifies as an Outside Director and a Non-Employee Director, but the authority
and validity of any act taken or not taken by the Committee shall not be
affected if any person administering the Plan is not an Outside Director or a
Non-Employee Director. If the Stock is listed on a national securities exchange
or quoted on Nasdaq, each member of the Committee shall also qualify as an
Independent Director, but, similarly, the failure of any member of the Committee
to be an Independent Director shall not affect the authority and validity of any
act taken or not taken by the Committee. Except as specifically reserved to the
Board under the terms of the Plan, the Committee shall have full and final
authority to operate, manage and administer the Plan on behalf of the Company.
Awards may also be granted by the Board, and at any time when there shall not be
a Committee, all authority for administration of the Plan that would otherwise
be held by the Committee shall be held by the Board.
(b) POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant and modify Awards consistent with the terms of the Plan,
including the power and authority:
(i) to select the persons to whom Awards may from time to time
(ii) to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options, Non-Statutory Stock Options, Restricted
Stock, Unrestricted Stock, Performance Shares and Stock Appreciation Rights, or
any combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any
(iv) to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards; PROVIDED, HOWEVER, that no such action shall adversely affect rights
under any outstanding Award without the participant's consent;
(v) to accelerate the exercisability or vesting of all or any
portion of any Award;
(vi) to extend the period in which any outstanding Stock
Option or Stock Appreciation Right may be exercised; and
(vii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and proceedings as
it shall deem advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all determinations it
deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants. No member or former
member of the Committee or the Board shall be liable for any action or
determination made in good faith with respect to this Plan.
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.
(a) SHARES ISSUABLE. The maximum number of shares of Stock which may be
issued in respect of Awards (including Stock Appreciation Rights) granted under
the Plan, subject to adjustment upon changes in capitalization of the Company as
provided in this Section 3, shall be 25,000,000 shares. For purposes of this
limitation, the shares of Stock underlying any Awards which are forfeited,
cancelled, reacquired by the Company or otherwise terminated (other than by
exercise), shares that are tendered in payment of the exercise price of any
Award and shares that are tendered or withheld for tax withholding obligations
shall be added back to the shares of Stock with respect to which Awards may be
granted under the Plan. Shares issued under the Plan may be authorized but
unissued shares or shares reacquired by the Company.
(b) LIMITATION ON AWARDS. In no event may any Plan participant be
granted Awards (including Stock Appreciation Rights) with respect to more than
2,000,000 shares of Stock in any calendar year. The number of shares of Stock
relating to an Award granted to a Plan participant in a calendar year that is
subsequently forfeited, cancelled or otherwise terminated shall continue to
count toward the foregoing limitation in such calendar year. In addition, if the
exercise price of an Award is subsequently reduced, the transaction shall be
deemed a cancellation of the original Award and the grant of a new one so that
both transactions shall count toward the maximum shares issuable in the calendar
year of each respective transaction.
(c) STOCK DIVIDENDS, MERGERS, ETC. In the event that after approval of
the Plan by the stockholders of the Company in accordance with Section 17, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind of shares of stock or securities with
respect to which Awards may thereafter be granted (including without limitation
the limitations set forth in Sections 3(a) and (b) above), (ii) the number and
kind of shares remaining subject to outstanding Awards, and (iii) the option or
purchase price in respect of such shares. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Committee in its
sole discretion may, as to any outstanding Awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Award, shall require payment or other consideration which
the Committee deems equitable in the circumstances), subject, however, to the
provisions of Section 15.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or an Affiliate as
the result of a merger or consolidation of the employing corporation or other
entity with the Company or an Affiliate or the acquisition by the Company or an
Affiliate of property or stock of the employing corporation or other entity. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY.
Awards may be granted to officers, directors and employees of, and
consultants and advisers to, the Company or its Affiliates ("ELIGIBLE PERSONS").
SECTION 5. STOCK OPTIONS.
The Committee may grant to Eligible Persons options to purchase stock.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options (subject to compliance with applicable law) or Non-Statutory Stock
Options. Unless otherwise so designated, an Option shall be a Non-Statutory
Stock Option. To the extent that any option does not qualify as an Incentive
Stock Option, it shall constitute a Non-Statutory Stock Option.
No Incentive Stock Option shall be granted under the Plan after the
tenth anniversary of the date of adoption of the Plan by the Board.
The Committee in its discretion may determine the effective date of
Stock Options, PROVIDED, HOWEVER, that grants of Incentive Stock Options shall
be made only to persons who are, on the effective date of the grant, employees
of the Company or an Affiliate. Stock Options granted pursuant to this Section 5
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem desirable.
(a) EXERCISE PRICE. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5 shall be determined by the
Committee at the time of grant but shall be, in the case of Incentive Stock
Options, not less than one hundred percent (100%) of Fair Market Value on the
date of grant. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than one hundred
ten percent (110%) of Fair Market Value on the date of grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten (10)
years after the date the option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
ten percent (10%) of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the term of such option shall be no more than five (5)
years from the date of grant.
(c) EXERCISABILITY; RIGHTS OF A SHAREHOLDER. Stock Options shall become
vested and exercisable at such time or times, whether or not in installments, as
shall be determined by the Committee. The Committee may at any time accelerate
the exercisability of all or any portion of any Stock Option. An optionee shall
have the rights of a shareholder only as to shares acquired upon the exercise of
a Stock Option and not as to unexercised Stock Options.
(d) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by delivering written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made by
delivery of cash or bank check or other instrument acceptable to the Committee
in an amount equal to the exercise price of such Options, or, to the extent
provided in the applicable Option Agreement, by one or more of the following
(i) by delivery to the Company of shares of Common Stock of
the Company that either have been purchased by the optionee on the open market,
or have been beneficially owned by the optionee for a period of at least six
months and are not then subject to restriction under any Company plan ("MATURE
SHARES"); such surrendered shares shall have a fair market value equal in amount
to the exercise price of the Options being exercised; or
(ii) a personal recourse note issued by the optionee to the
Company in a principal amount equal to such aggregate exercise price and with
such other terms, including interest rate and maturity, as the Company may
determine in its discretion; PROVIDED, HOWEVER, that the interest rate borne by
such note shall not be less than the lowest applicable federal rate, as defined
in Section 1274(d) of the Code; or
(iii) if the class of Common Stock is registered under the
Securities Exchange Act of 1934 at such time, by delivery to the Company of a
properly executed exercise notice along with irrevocable instructions to a
broker to deliver promptly to the Company cash or a check payable and acceptable
to the Company for the purchase price; PROVIDED, that in the event that the
optionee chooses to pay the purchase price as so provided, the optionee and the
broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe as a condition
of such payment procedure (including, in the case of an optionee who is an
executive officer of the Company, such procedures and agreements as the
Committee deems appropriate in order to avoid any extension of credit in the
form of a personal loan to such officer). The Company need not act upon such
exercise notice until the Company receives full payment of the exercise price;
(iv) by reducing the number of Option shares otherwise
issuable to the optionee upon exercise of the Option by a number of shares of
Common Stock having a fair market value equal to such aggregate exercise price;
provided, HOWEVER, that the optionee otherwise holds an equal number of mature
(v) by any combination of such methods of payment.
The delivery of certificates representing shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent upon
receipt from the Optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase price
for such shares and the fulfillment of any other requirements contained in the
Stock Option or imposed by applicable law.
(e) NON-TRANSFERABILITY OF OPTIONS. Except as the Committee may provide
with respect to a Non-Statutory Stock Option, no Stock Option shall be
transferable other than by will or by the laws of descent and distribution and
all Stock Options shall be exercisable, during the optionee's lifetime, only by
(f) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Stock with respect
to which Incentive Stock Options granted under this Plan and any other plan of
the Company or its Affiliates become exercisable for the first time by an
optionee during any calendar year shall not exceed $100,000.
(g) LOCKUP AGREEMENT. Each Option shall provide that the optionee shall
agree for a period of time (not to exceed 180 days) from the effective date of
any registration of securities of the Company (upon request of the Company or
the underwriters managing any underwritten offering of the Company's securities)
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of, any shares issued pursuant to the exercise of such
Option, without the prior written consent of the Company or such underwriters,
as the case may be.
SECTION 6. RESTRICTED STOCK AWARDS.
(a) NATURE OF RESTRICTED STOCK AWARD. The Committee in its discretion
may grant Restricted Stock Awards to any Eligible Person, entitling the
recipient to acquire, for such purchase price, if any, as may be determined by
the Committee, shares of Stock subject to such restrictions and conditions as
the Committee may determine at the time of grant ("RESTRICTED STOCK"), including
continued employment and/or achievement of pre-established performance goals and
(b) ACCEPTANCE OF AWARD. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within sixty (60) days (or such
shorter date as the Committee may specify) following the award date by making
payment to the Company of the specified purchase price, if any, of the shares
covered by the Award and by executing and delivering to the Company a written
instrument that sets forth the terms and conditions applicable to the Restricted
Stock in such form as the Committee shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Stock Award. Unless the
Committee shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
are vested as provided in Section 6(e) below.
(d) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by the
Company and its Affiliates for any reason (including death, Disability, Normal
Retirement and for Cause), the Company shall have the right, at the discretion
of the Committee, to repurchase shares of Restricted Stock which have not then
vested at their purchase price, or to require forfeiture of such shares to the
Company if acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or forfeiture
within ninety (90) days following such termination of employment (unless
otherwise specified in the written instrument evidencing the Restricted Stock
(e) VESTING OF RESTRICTED STOCK. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." The Committee at any time may
accelerate such date or dates and otherwise waive or, subject to Section 13,
amend any conditions of the Award.
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
SECTION 7. UNRESTRICTED STOCK AWARDS.
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee in its
discretion may grant or sell to any Eligible Person shares of Stock free of any
restrictions under the Plan ("UNRESTRICTED STOCK") at a purchase price
determined by the Committee. Shares of Unrestricted Stock may be granted or sold
as described in the preceding sentence in respect of past services or other
(b) RESTRICTIONS ON TRANSFERS. The right to receive unrestricted Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered, other
than by will or the laws of descent and distribution.
SECTION 8. PERFORMANCE SHARE AWARDS.
A Performance Share Award is an award entitling the recipient to
acquire shares of Stock upon the attainment of specified performance goals. The
Committee may make Performance Share Awards independent of or in connection with
the granting of any other Award under the Plan. Performance Share Awards may be
granted under the Plan to any Eligible Person. The Committee in its discretion
shall determine whether and to whom Performance Share Awards shall be made, the
performance goals applicable under each such Award (which may include, without
limitation, continued employment by the recipient or a specified achievement by
the recipient, the Company or any business unit of the Company), the periods
during which performance is to be measured, and all other limitations and
conditions applicable to the Award or the Stock issuable thereunder.
SECTION 9. STOCK APPRECIATION RIGHTS.
The Committee in its discretion may grant Stock Appreciation Rights to
any Eligible Person (i) alone, or (ii) simultaneously with the grant of a Stock
Option and in conjunction therewith or in the alternative thereto. A Stock
Appreciation Right shall entitle the participant upon exercise thereof to
receive from the Company, upon written request to the Company at its principal
offices (the "REQUEST"), a number of shares of Stock (with or without
restrictions as to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of cash, or any
combination of Stock and cash, as specified in the Request (but subject to the
approval of the Committee in its sole discretion, at any time up to and
including the time of payment, as to the making of any cash payment), having an
aggregate Fair Market Value equal to the product of (a) the excess of Fair
Market Value, on the date of such Request, over the exercise price per share of
Stock specified in such Stock Appreciation Right or its related Option,
multiplied by (b) the number of shares of Stock for which such Stock
Appreciation Right shall be exercised. Notwithstanding the foregoing, the
Committee may specify at the time of grant of any Stock Appreciation Right that
such Stock Appreciation Right may be exercisable solely for cash and not for
SECTION 10. TERMINATION OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) INCENTIVE STOCK OPTIONS:
(i) TERMINATION BY DEATH. If any participant's employment by
the Company and its Affiliates terminates by reason of death, any Incentive
Stock Option owned by such participant may thereafter be exercised to the extent
exercisable at the date of death, by the legal representative or legatee of the
participant, for a period of one hundred eighty (180) days (or such longer
period as the Committee shall specify at any time) from the date of death, or
until the expiration of the stated term of the Incentive Stock Option, if
(ii) TERMINATION BY REASON OF DISABILITY OR NORMAL RETIREMENT.
(A) Any Incentive Stock Option held by a participant
whose employment by the Company and its Affiliates has terminated by reason of
Disability may thereafter be exercised, to the extent it was exercisable at the
time of such termination, for a period of ninety (90) days (or such longer
period as the Committee shall specify at any time) from the date of such
termination of employment, or until the expiration of the stated term of the
Option, if earlier.
(B) Any Incentive Stock Option held by a participant
whose employment by the Company and its Affiliates has terminated by reason of
Normal Retirement may thereafter be exercised, to the extent it was exercisable
at the time of such termination, for a period of ninety (90) days (or such
longer period as the Committee shall specify at any time) from the date of such
termination of employment, or until the expiration of the stated term of the
Option, if earlier.
(C) The Committee shall have sole authority and
discretion to determine whether a participant's employment has been terminated
by reason of Disability or Normal Retirement.
(iii) TERMINATION FOR CAUSE. If any participant's employment
by the Company and its Affiliates has been terminated for Cause, any Incentive
Stock Option held by such participant shall immediately terminate and be of no
further force and effect; PROVIDED, HOWEVER, that the Committee may, in its sole
discretion, provide that such Option can be exercised for a period of up to
thirty (30) days from the date of termination of employment or until the
expiration of the stated term of the Option, if earlier.
(iv) OTHER TERMINATION. Unless otherwise determined by the
Committee, if a participant's employment by the Company and its Affiliates
terminates for any reason other than death, Disability, Normal Retirement or for
Cause, any Incentive Stock Option held by such participant may thereafter be
exercised, to the extent it was exercisable on the date of termination of
employment, for thirty (30) days (or such other period as the Committee shall
specify) from the date of termination of employment or until the expiration of
the stated term of the Option, if earlier.
(b) NON-STATUTORY STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. Any
Non-Statutory Stock Option or Stock Appreciation Right granted under the Plan
shall contain such terms and conditions with respect to its termination as the
Committee, in its discretion, may from time to time determine.
SECTION 11. TAX WITHHOLDING.
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, local
and/or payroll taxes of any kind required by law to be withheld with respect to
such income. The Company and its Affiliates shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.
(b) PAYMENT IN SHARES. A Participant may elect, with the consent of the
Committee, to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to an Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award, or (ii) delivering to
the Company a number of mature shares of Stock with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due.
(c) NOTICE OF DISQUALIFYING DISPOSITION. Each holder of an Incentive
Option shall agree to notify the Company in writing immediately after making a
disqualifying disposition (as defined in Section 421(b) of the Code) of any
Stock purchased upon exercise of an Incentive Stock Option.
SECTION 12. TRANSFER AND LEAVE OF ABSENCE.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from an Affiliate or
from the Company to an Affiliate, or from one Affiliate to another;
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 13. AMENDMENTS AND TERMINATION.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law or for any other lawful purpose, but no such action shall adversely affect
rights under any outstanding Award without the holder's consent.
This Plan shall terminate as of the tenth anniversary of its effective
date. The Board may terminate this Plan at any earlier time for any reason. No
Award may be granted after the Plan has been terminated. No Award granted while
this Plan is in effect shall be altered or impaired by termination of this Plan,
except upon the consent of the holder of such Award. The power of the Committee
to construe and interpret this Plan and the Awards granted prior to the
termination of this Plan shall continue after such termination.
SECTION 14. STATUS OF PLAN.
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
SECTION 15. CHANGE OF CONTROL PROVISIONS.
(a) Upon the occurrence of a Change of Control as defined in this
(i) subject to the provisions of clause (iii) below, after the
effective date of such Change of Control, each holder of an outstanding Stock
Option, Restricted Stock Award, Performance Share Award or Stock Appreciation
Right shall be entitled, upon exercise of such Award, to receive, in lieu of
shares of Stock (or consideration based upon the Fair Market Value of Stock),
shares of such stock or other securities, cash or property (or consideration
based upon shares of such stock or other securities, cash or property) as the
holders of shares of Stock received in connection with the Change of Control;
(ii) the Committee may accelerate, fully or in part, the time
for exercise of, and waive any or all conditions and restrictions on, each
unexercised and unexpired Stock Option, Restricted Stock Award, Performance
Share Award and Stock Appreciation Right, effective upon a date prior or
subsequent to the effective date of such Change of Control, as specified by the
(iii) each outstanding Stock Option, Restricted Stock Award,
Performance Share Award and Stock Appreciation Right may be cancelled by the
Committee as of the effective date of any such Change of Control; PROVIDED, that
(A) prior written notice of such cancellation shall be given to each holder of
such an Award and (B) each holder of such an Award shall have the right to
exercise such Award to the extent that the same is then exercisable or, in full,
if the Committee shall have accelerated the time for exercise of all such
unexercised and unexpired Awards, during the thirty (30) day period preceding
the effective date of such Change of Control.
(b) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
(i) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) becomes, after the Effective Date of this Plan, a
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act) (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
(ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other entity, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(iii) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
SECTION 16. GENERAL PROVISIONS.
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring shares pursuant to an Award to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities laws and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop orders and
restrictive legends on certificates for Stock and Awards as it deems
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan or any
Award under the Plan does not confer upon any employee any right to continued
employment with the Company or any Affiliate.
SECTION 17. EFFECTIVE DATE OF PLAN.
This Plan shall become effective upon (a) its adoption by the Company's
Board of Directors and (b) its approval by the shareholders of the Company
within twelve months following the adoption of this Plan by the Board. If such
shareholder approval is not obtained within twelve months after the Board's
adoption of this Plan, all Options previously granted that that were stated to
be Incentive Stock Options shall become Non-Statutory Stock Options, and the
Company shall cease to issue Incentive Stock Options.
SECTION 18. GOVERNING LAW.
This Plan shall be governed by, and construed and enforced in
accordance with, the substantive laws of the State of Florida
without regard to
its principles of conflicts of laws.
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