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8-K - FORM 8-K 12-30-09 - SPICY PICKLE FRANCHISING INC | f8k-123009_spicy.htm |
EX-10.2 - EXH 10-2 2009 RESTRICTED STOCK PLAN - SPICY PICKLE FRANCHISING INC | exh10-2.htm |
EXHIBIT 10.1
2009 STOCK OPTION PLAN
________________________________________
SPICY
PICKLE FRANCHISING, INC.
2009
STOCK OPTION PLAN
________________________________________
Adopted
by the Resolution of the Directors on December 30, 2009
SPICY
PICKLE FRANCHISING, INC.
2009
STOCK OPTION PLAN
1.
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Purpose.
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The
purpose of this Plan is to advance the interests of the Company and its
stockholders by helping the Company obtain and retain the services of employees,
officers, consultants, and directors, upon whose judgment, initiative and
efforts the Company is substantially dependent, and to provide those persons
with further incentives to advance the interests of the Company.
2.
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Certain
Definitions.
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Unless
the context otherwise requires, the following defined terms (together with other
capitalized
terms defined elsewhere in this Plan) will govern the construction of this Plan,
and of any stock option agreements entered into pursuant to this
Plan:
(a)
|
“10%
Stockholder” means a person who owns, either directly or indirectly by
virtue of the ownership attribution provisions set forth in Section 424(d)
of the Code at the time he or she is granted an Option, stock possessing
more than ten percent (10%) of the total combined voting power or value of
all classes of stock of the Company and/or of its
subsidiaries;
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(b)
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“1933
Act” means the federal Securities Act of 1933, as
amended;
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(c)
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“Board”
means the Board of Directors of the
Company;
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(d)
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“Called
for under an Option,” or words to similar effect, means issuable pursuant
to the exercise of an Option;
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(e)
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“Code”
means the Internal Revenue Code of 1986, as amended (references herein to
Sections of the Code are intended to refer to Sections of the Code as
enacted at the time of this Plan’s adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions
of the Code resulting from recodification, renumbering or
otherwise);
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(f)
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“Committee”
means a committee of two or more Disinterested Directors, appointed by the
Board, to administer and interpret this Plan; provided that the term
“Committee” will refer to the Board during such times as no Committee is
appointed by the Board;
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(g)
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“Company”
means Spicy Pickle Franchising, Inc., a Colorado
corporation;
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(h)
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“Disability”
has the same meaning as “permanent and total disability,” as defined in
Section 22(e)(3) of the Code;
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(i)
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“Disinterested
Director” means a member of the Board who is not during the period of one
year prior to his or her service as an administrator of the Plan, or
during the period of such service, granted or awarded Stock, options to
acquire Stock, or similar equity securities of the Company
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1
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under this Plan or any similar plan of the Company, other
than the grant of a Formula Option pursuant to section 6(m) of this
Plan;
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(j)
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“Eligible
Participants” means persons who, at a particular time, are employees,
officers, consultants, or directors of the Company or its
subsidiaries;
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(k)
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“Fair
Market Value” means, with respect to the Stock and as of the date an ISO
or a Formula Option is granted hereunder, the market price per share of
such Stock determined by the Committee, consistent with the requirements
of Section 422 of the Code and to the extent consistent therewith, as
follows:
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(i)
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If
the Stock was traded on a stock exchange on the date in question, then the
Fair Market Value will be equal to the closing price reported by the
applicable composite-transactions report for such
date;
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(ii)
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If
the Stock was traded over-the-counter on the date in question and was
classified as a national market issue, then the Fair Market Value will be
equal to the last-transaction price quoted by the NASDAQ system for such
date;
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(iii)
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If
the Stock was traded over-the-counter on the date in question but was not
classified as a national market issue, then the Fair Market Value will be
equal to the average of the last reported representative bid and asked
prices quoted by the NASDAQ system for such date;
and
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(iv)
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If
none of the foregoing provisions is applicable, then the Fair Market Value
will be determined by the Committee in good faith on such basis as it
deems appropriate.
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(l)
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“Formula
Option” means an NSO granted to members of the Committee pursuant to
section 6(m) hereof;
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(m)
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“ISO”
has the same meaning as “incentive stock option,” as defined in Section
422 of the Code;
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(n)
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“Just
Cause Termination” means a termination by the Company of an Optionee’s
employment by and/or service to the Company (or if the Optionee is a
director, removal of the Optionee from the Board by action of the
stockholders or, if permitted by applicable law and the by-laws of the
Company, the other directors), in connection with the good faith
determination of the Company’s board of directors (or of the Company’s
stockholders if the Optionee is a director and the removal of the Optionee
from the Board is by action of the stockholders, but in either case
excluding the vote of the Optionee if he or she is a director or a
stockholder) that the Optionee has engaged in any acts involving
dishonesty or moral turpitude or in any acts that materially and adversely
affect the business, affairs or reputation of the Company or its
subsidiaries;
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(o)
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“NSO”
means any option granted under this Plan whether designated by the
Committee as a “non-qualified stock option,” a “non-statutory stock
option” or otherwise, other than an option designated by the Committee as
an ISO, or any option so designated but which, for any reason, fails to
qualify as an ISO pursuant to Section 422 of the Code and the rules and
regulations thereunder;
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2
(p)
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“Option”
means an option granted pursuant to this Plan entitling the option holder
to acquire shares of Stock issued by the Company pursuant to the valid
exercise of the option;
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(q)
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“Option
Agreement” means an agreement between the Company and an Optionee, in form
and substance satisfactory to the Committee in its sole discretion,
consistent with this Plan;
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(r)
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“Option
Price” with respect to any particular Option means the exercise price at
which the Optionee may acquire each share of the Option Stock called for
under such Option;
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(s)
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“Option
Stock” means Stock issued or issuable by the Company pursuant to the valid
exercise of an Option;
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(t)
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“Optionee”
means an Eligible Participant to whom Options are granted hereunder, and
any transferee thereof pursuant to a Transfer authorized under this
Plan;
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(u)
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“Plan”
means this 2009 Stock Option Plan of the
Company;
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(v)
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“QDRO”
has the same meaning as “qualified domestic relations order” as defined in
Section 414(p) of the Code;
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(w)
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“Stock”
means shares of the Company’s Common Stock, $0.001 par
value;
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(x)
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“Subsidiary”
has the same meaning as “Subsidiary Corporation” as defined in Section
424(f) of the Code;
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(y)
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“Transfer,”
with respect to Option Stock, includes, without limitation, a voluntary or
involuntary sale, assignment, transfer, conveyance, pledge, hypothecation,
encumbrance, disposal, loan, gift, attachment or levy of such Option
Stock, including without limitation an assignment for the benefit of
creditors of the Optionee, a transfer by operation of law, such as a
transfer by will or under the laws of descent and distribution, an
execution of judgment against the Option Stock or the acquisition of
record or beneficial ownership thereof by a lender or creditor, a transfer
pursuant to a QDRO, or to any decree of divorce, dissolution or separate
maintenance, any property settlement, any separation agreement or any
other agreement with a spouse (except for estate planning purposes) under
which a part or all of the shares of Option Stock are transferred or
awarded to the spouse of the Optionee or are required to be sold; or a
transfer resulting from the filing by the Optionee of a petition for
relief, or the filing of an involuntary petition against such Optionee,
under the bankruptcy laws of the United States or of any other
nation.
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3.
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Eligibility.
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The
Company may grant Options under this Plan only to persons who are Eligible
Participants as of the time of such grant. Subject to the provisions of sections
4(d), 5 and 6 hereof, there is no limitation on the number of Options that may
be granted to an Eligible Participant.
3
4.
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Administration.
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(a)
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Committee. The
Committee, if appointed by the Board, will administer this Plan. If the
Board, in its discretion, does not appoint such a Committee, the Board
itself will administer this Plan and take such other actions as the
Committee is authorized to take hereunder; provided that the Board may
take such actions hereunder in the same manner as the Board may take other
actions under the Company’s Articles of Incorporation and By-laws
generally.
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(b)
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Authority and Discretion of
Committee. The Committee will have full and final authority in its
discretion, at any time and from time to time, subject only to the express
terms, conditions and other provisions of the Company’s Articles of
incorporation, by-laws and this Plan, and the specific limitations on such
discretion set forth herein:
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(i)
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to
select and approve the persons who will be granted Options under this Plan
from among the Eligible Participants, and to grant to any person so
selected one or more Options to purchase such number of shares of Option
Stock as the Committee may
determine;
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(ii)
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to
determine the period or periods of time during which Options may be
exercised, the Option Price and the duration of such Options, and other
matters to be determined by the Committee in connection with specific
Option grants and Options Agreements as specified under this
Plan;
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(iii)
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to
interpret this Plan, to prescribe, amend and rescind rules and regulations
relating to this Plan, and to make all other determinations necessary or
advisable for the operation and administration of this Plan;
and
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(iv)
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to
delegate all or a portion of its authority under subsections (i) and (ii)
of this section 4(b) to one or more directors of the Company who are
executive officers of the Company, but only in connection with Options
granted to Eligible Participants who are not subject to the reporting and
liability provisions of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, and subject to such
restrictions and limitations (such as the aggregate number of shares of
Option Stock called for by such Options that may be granted) as the
Committee may decide to impose on such delegate
directors.
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(c)
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Limitation on Authority.
Notwithstanding the foregoing, or any other provision of this Plan,
the Committee will have no
authority:
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(i)
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to
grant Options to any of its members, whether or not approved by the Board;
and
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(ii)
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to
determine any matters, or exercise any discretion, in connection with the
Formula Options under section 6(m) hereof, to the extent that the power to
make such determinations or to exercise such discretion would cause one or
more members of the Committee no longer to be “Disinterested Directors”
within the meaning of section 2(i)
above.
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4
(d)
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Designation of Options.
Except as otherwise provided herein, the Committee will designate
any Option granted hereunder either as an ISO or as an NSO. To the extent
that the Fair Market Value (determined at the time the Option is granted)
of Stock with respect to which all ISOs are exercisable for the first time
by any individual during any calendar year (pursuant to this Plan and all
other plans of the Company and/or its subsidiaries) exceeds $100,000, such
option will be treated as an NSO. Notwithstanding the general eligibility
provisions of section 3 hereof, the Committee may grant ISOs only to
persons who are employees of the Company and/or its
subsidiaries.
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(e)
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Option Agreements.
Options will be deemed granted hereunder only upon the execution
and delivery of an Option Agreement by the Optionee and a duly authorized
officer of the Company. Options will not be deemed granted hereunder
merely upon the authorization of such grant by the
Committee.
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5.
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Shares
Reserved for Options.
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(a)
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Option Pool.
The aggregate number of shares of Option Stock that may be issued
pursuant to the exercise of Options granted under this Plan will not
exceed Five Million (5,000,000) (the “Option Pool”), provided that such
number will be increased by the number of shares of Option Stock that the
Company subsequently may reacquire through repurchase or otherwise. Shares
of Option Stock that would have been issuable pursuant to Options, but
that are no longer issuable because all or part of those Options have
terminated or expired, will be deemed not to have been issued for purposes
of computing the number of shares of Option Stock remaining in the Option
Pool and available for issuance.
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(b)
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Adjustments
Upon Changes in Stock. In the event of any change in the
outstanding Stock of the Company as a result of a stock split, reverse
stock split, stock dividend, recapitalization, combination or
reclassification, appropriate proportionate adjustments will be made
in:
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(i)
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the
aggregate number of shares of Option Stock in the Option Pool that may be
issued pursuant to the exercise of Options granted
hereunder;
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(ii)
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the
Option Price and the number of shares of Option Stock called for in each
outstanding Option granted hereunder;
and
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(iii)
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other
rights and matters determined on a per share basis under this Plan or any
Option Agreement hereunder. Any such adjustments will be made only by the
Board, and when so made will be effective, conclusive and binding for all
purposes with respect to this Plan and all Options then outstanding. No
such adjustments will be required by reason of the issuance or sale by the
Company for cash or other consideration of additional shares of its Stock
or securities convertible into or exchangeable for shares of its
Stock.
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5
6.
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Terms
of Stock Option Agreements.
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Each
Option granted pursuant to this Plan will be evidenced by an agreement (an
“Option Agreement”) between the Company and the person to whom such Option is
granted, in form and substance satisfactory to the Committee in its sole
discretion, consistent with this Plan. Without limiting the foregoing, each
Option Agreement (unless otherwise stated therein) will be deemed to include the
following terms and conditions:
(a)
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Covenants of Optionee.
At the discretion of the Committee, the person to whom an Option is
granted hereunder, as a condition to the granting of the Option, must
execute and deliver to the Company a confidential information agreement
approved by the Committee. Nothing contained in this Plan, any Option
Agreement or in any other agreement executed in connection with the
granting of an Option under this Plan will confer upon any Optionee any
right with respect to the continuation of his or her status as an employee
of, consultant or independent contractor to, or director of, the Company
or its subsidiaries.
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Vesting Periods. Except
as otherwise provided herein, each Option Agreement may specify the period
or periods of time within which each Option or portion thereof will first
become exercisable (the “Vesting Period”) with respect to the total number
of shares of Option Stock called for thereunder (the “Total Award Option
Stock”). Such Vesting Periods will be fixed by the Committee in its
discretion, and may be accelerated or shortened by the Committee in its
discretion.
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(c)
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Exercise
of the Option.
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(i)
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Mechanics and Notice.
An Option may be exercised to the extent exercisable (1) by giving
written notice of exercise to the Company, specifying the number of full
shares of Option Stock to be purchased and accompanied by full payment of
the Option Price thereof and the amount of withholding taxes pursuant to
subsection 6(c)(ii) below; and (2) by giving assurances satisfactory to
the Company that the shares of Option Stock to be purchased upon such
exercise are being purchased for investment and not with a view to resale
in connection with any distribution of such shares in violation of the
1933 Act; provided, however, that in the event the Option Stock called for
under the Option is registered under the 1933 Act, or in the event resale
of such Option Stock without such registration would otherwise be
permissible, this second condition will be inoperative if, in the opinion
of counsel for the Company, such condition is not required under the 1933
Act, or any other applicable law, regulation or rule of any governmental
agency.
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(ii)
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Withholding Taxes. As a
condition to the issuance of the shares of Option Stock upon full or
partial exercise of an NSO granted under this Plan, the Optionee will pay
to the Company in cash, or in such other form as the Committee may
determine in its discretion, the amount of the Company’s tax withholding
liability required in connection with such exercise. For purposes of this
subsection 6(c)(ii), “tax withholding liability” will mean all federal and
state income taxes, social security tax, and any other taxes applicable to
the compensation income arising from the transaction required by
applicable law to be withheld by the
Company.
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6
(d)
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Payment of Option Price.
Each Option Agreement will specify the Option Price with respect to
the exercise of Option Stock thereunder, to be fixed by the Committee in
its discretion, but in no event will the Option Price for an ISO granted
hereunder be less than the Fair Market Value (or, in case the Optionee is
a 10% Stockholder, one hundred ten percent (110%) of such Fair Market
Value) of the Option Stock at the time such ISO is granted, and in no
event will the Option Price for an NSO granted hereunder be less than
eighty-five percent (85%) of Fair Market Value. The Option Price will be
payable to the Company in United States dollars in cash or by check or,
such other legal consideration as may be approved by the Committee, in its
discretion.
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(i)
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For
example, the Committee, in its discretion, may permit a particular
Optionee to pay all or a portion of the Option Price, and/or the tax
withholding liability set forth in subsection 6(c)(ii) above, with respect
to the exercise of an Option either by surrendering shares of Stock
already owned by such Optionee or by withholding shares of Option Stock,
provided that the Committee determines that the fair market value of such
surrendered Stock or withheld Option Stock is equal to the corresponding
portion of such Option Price and/or tax withholding liability, as the case
may be, to be paid for therewith.
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(ii)
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If
the Committee permits an Optionee to pay any portion of the Option Price
and/or tax withholding liability with shares of Stock with respect to the
exercise of an Option (the “Underlying Option”) as provided in subsection
6(d)(i) above, then the Committee, in its discretion, may grant to such
Optionee (but only if Optionee remains an Eligible Participant at that
time) additional NSOs, the number of shares of Option Stock called for
thereunder to be equal to all or a portion of the Stock so surrendered or
withheld (a “Replacement Option”). Each Replacement Option will be
evidenced by an Option Agreement. Unless otherwise set forth therein, each
Replacement Option will be immediately exercisable upon such grant
(without any Vesting Period) and will be coterminous with the Underlying
Option. The Committee, in its sole discretion, may establish such other
terms and conditions for Replacement Options as it deems
appropriate.
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(e)
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Termination of the Option.
Except as otherwise provided herein, each Option Agreement will
specify the period of time, to be fixed by the Committee in its
discretion, during which the Option granted therein will be exercisable,
not to exceed ten years from the date of grant in the case of an ISO (the
“Option Period”); provided that the Option Period will not exceed five
years from the date of grant in the case of an ISO granted to a 10%
Stockholder. To the extent not previously exercised, each Option will
terminate upon the expiration of the Option Period specified in the Option
Agreement; provided, however, that each such Option will terminate, if
earlier:
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(i)
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ninety
days after the date that the Optionee ceases to be an Eligible Participant
for any reason, other than by reason of death or disability or a Just
Cause Termination;
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(ii)
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twelve
months after the date that the Optionee ceases to be an Eligible
Participant by reason of such person’s death or disability;
or
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(iii)
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immediately
as of the date that the Optionee ceases to be an Eligible Participant by
reason of a Just Cause Termination.
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7
In the
event of a sale of all or substantially all of the assets of the Company, or a
merger or consolidation or other reorganization in which the Company is not the
surviving corporation, or in which the Company becomes a subsidiary of another
corporation (any of the foregoing events, a “Corporate Transaction”), then
notwithstanding anything else herein, the right to exercise all then outstanding
Options will vest immediately prior to such Corporate Transaction and will
terminate immediately after such Corporate Transaction; provided, however, that
if the Board, in its sole discretion, determines that such immediate vesting of
the right to exercise outstanding Options is not in the best interests of the
Company, then the successor corporation must agree to assume the outstanding
Options or substitute therefor comparable options of such successor corporation
or a parent or subsidiary of such successor corporation.
(f)
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Options Nontransferable.
No Option will be transferable by the Optionee otherwise than by
will or the laws of descent and distribution, or in the case of an NSO,
pursuant to a QDRO. During the lifetime of the Optionee, the Option will
be exercisable only by him or her, or the transferee of an NSO if it was
transferred pursuant to a QDRO.
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(g)
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Qualification of Stock.
The right to exercise an Option will be further subject to the
requirement that if at any time the Board determines, in its discretion,
that the listing, registration or qualification of the shares of Option
Stock called for thereunder upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental
regulatory authority, is necessary or desirable as a condition of or in
connection with the granting of such Option or the purchase of shares of
Option Stock thereunder, the Option may not be exercised, in whole or in
part, unless and until such listing, registration, qualification, consent
or approval is effected or obtained free of any conditions not acceptable
to the Board, in its discretion.
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(h)
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Additional Restrictions on
Transfer. By accepting Options and/or Option Stock under this Plan,
the Optionee will be deemed to represent, warrant and agree as
follows:
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(i)
|
Securities Act of 1933.
The Optionee understands that the shares of Option Stock have not
been registered under the 1933 Act, and that such shares are not freely
tradable and must be held indefinitely unless such shares are either
registered under the 1933 Act or an exemption from such registration is
available. The Optionee understands that the Company is under no
obligation to register the shares of Option
Stock.
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(ii)
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Other Applicable Laws.
The Optionee further understands that Transfer of the Option Stock
requires full compliance with the provisions of all applicable
laws.
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(iii)
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Investment Intent.
Unless a registration statement is in effect with respect to the
sale of Option Stock obtained through exercise of Options granted
hereunder: (1) Upon exercise of any Option, the Optionee will purchase the
Option Stock for his or her own account and not with a view to
distribution within the meaning of the 1933 Act, other than as may be
effected in compliance with the 1933 Act and the rules and regulations
promulgated thereunder; (2) no one else will have any beneficial interest
in the Option Stock; and (3) he or she has no present intention of
disposing of the Option Stock at any particular
time.
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8
(i)
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Compliance with Law.
Notwithstanding any other provision of this Plan, Options may be
granted pursuant to this Plan, and Option Stock may be issued pursuant to
the exercise thereof by an Optionee, only after there has been compliance
with all applicable federal and state securities laws, and all of the same
will be subject to this overriding condition. The Company will not be
required to register or qualify Option Stock with the Securities and
Exchange Commission or any State agency, except that the Company will
register with, or as required by local law, file for and secure an
exemption from such registration requirements from, the applicable
securities administrator and other officials of each jurisdiction in which
an Eligible Participant would be granted an Option hereunder prior to such
grant.
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(j)
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Stock Certificates.
Certificates representing the Option Stock issued pursuant to the
exercise of Options will bear all legends required by law and necessary to
effectuate this Plan’s provisions. The Company may place a “stop transfer”
order against shares of the Option Stock until all restrictions and
conditions set forth in this Plan and in the legends referred to in this
section 6(k) have been complied
with.
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(k)
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Notices. Any notice to
be given to the Company under the terms of an Option Agreement will be
addressed to the Company at its principal executive office, Attention:
Corporate Secretary, or at such other address as the Company may designate
in writing. Any notice to be given to an Optionee will be addressed to the
Optionee at the address provided to the Company by the Optionee. Any such
notice will be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or branch
post office regularly maintained.
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(l)
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Other Provisions. The
Option Agreement may contain such other terms, provisions and conditions,
including such special forfeiture conditions, rights of repurchase, rights
of first refusal and other restrictions on Transfer of Option Stock issued
upon exercise of any Options granted hereunder, not inconsistent with this
Plan, as may be determined by the Committee in its sole
discretion.
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(m)
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Formula
Options. [Reserved for future
consideration]
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7.
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Proceeds
from Sale of Stock.
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Cash
proceeds from the sale of shares of Option Stock issued from time to time upon
the exercise of Options granted pursuant to this Plan will be added to the
general funds of the Company and as such will be used from time to time for
general corporate purposes.
8.
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Modification,
Extension and Renewal of Options.
|
Subject
to the terms and conditions and within the limitations of this Plan, and except
with respect to Formula Options, the Committee may modify, extend or renew
outstanding Options granted under this Plan, or accept the surrender of
outstanding Options (to the extent not theretofore exercised) and authorize the
granting of new Options in substitution therefor (to the extent not theretofore
exercised).
9
Notwithstanding
the foregoing, however, no modification of any Option will, without the consent
of the holder of the Option, alter or impair any rights or obligations under any
Option theretofore granted under this Plan.
9.
|
Amendment
and Discontinuance.
|
The Board
may amend, suspend or discontinue this Plan at any time or from time to time;
provided that no action of the Board will cause ISOs granted under this Plan not
to comply with Section 422 of the Code unless the Board specifically declares
such action to be made for that purpose and provided further that no such action
may, without the approval of the stockholders of the Company, materially
increase (other than by reason of an adjustment pursuant to section 5(b) hereof)
the maximum aggregate number of shares of Option Stock in the Option Pool that
may be issued under Options granted pursuant to this Plan or materially increase
the benefits accruing to Plan participants or materially modify eligibility
requirements for the participants. Provided, further, that the provisions of
section 6(m) hereof may not be amended more often than once during any six (6)
month period, other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or the rules and regulations thereunder.
Moreover, no such action may alter or impair any Option previously granted under
this Plan without the consent of the holder of such Option.
10.
|
Plan
Compliance with Rule 16b-3.
|
With
respect to persons subject to Section 16 of the Securities Exchange Act of 1934,
transactions under this plan are intended to comply with all applicable
conditions of Rule 16b- 3 or its successors under the 1934 Act. To the extent
any provision of the plan or action by the plan administrators fails so to
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the plan administrators.
11.
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Copies
of Plan.
|
A copy of
this Plan will be delivered to each Optionee at or before the time he or she
executes an Option Agreement.
Date Plan
Adopted by Board of
Directors: December
30, 2009
10