Unassociated Document
SCHEDULE
14C
(Rule
14c-101)
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of
1934
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Check
the appropriate box:
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x
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Preliminary
Information Statement
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Confidential,
for use of the Commission Only (as permitted by Rule
14c-5(d)(2))
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¨
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Definitive
Information Statement
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OMNI
U.S.A., Inc.
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(Name
of Registrant as Specified in its Charter)
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Payment
of Filing Fee (Check the appropriate box)
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x
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No
fee required
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¨
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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¨
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Fee
paid previously with preliminary materials.
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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OMNI
U.S.A., INC.
2236
Rutherford Road, Suite 107
Carlsbad,
California 92008
(760)
929-7500
INFORMATION
STATEMENT
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE
ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE ALREADY BEEN APPROVED
BY
OUR STOCKHOLDERS. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT
NECESSARY.
This
Information Statement is being furnished to the stockholders of record of Omni
U.S.A., Inc. (“we”
or
the
“Company”)
as of
June 15, 2006 (the “Record
Date”)
to
advise them that the Board of Directors and stockholders of the Company have
approved an amendment (the “Amendment”)
to our
Articles of Incorporation and adopted a 2006 Equity Incentive Plan (the
“Plan”).
The
Amendment, when filed with the Nevada Secretary of State, will change our name
to “Brendan Technologies, Inc.”. Stockholder approval was by written consent of
stockholders who own shares representing 54% of the outstanding votes as of
the
Record Date. This Information Statement is being mailed commencing ______,
2006.
A
copy of
the Certificate of Amendment containing the Amendment is attached to this
Information Statement as Appendix A. A copy of the Plan is attached to this
Information Statement as Appendix B.
Pursuant
to regulations promulgated under the Securities Exchange Act of 1934, as
amended, the Amendment may not be effected until at least 20 calendar days
after
this Information Statement is sent or given to our stockholders. We anticipate
that the Amendment will be filed promptly following the 20th
day
after this Information Statement is first sent to our stockholders. We will
pay
all costs associated with the preparation and distribution of this Information
Statement, including all mailing and printing expenses.
Background
Pursuant
to an Agreement and Plan of Merger dated as of December 29, 2005, the Company
acquired (the “Reverse Merger”) all of the capital stock of Brendan
Technologies, Inc. (“Brendan”). Following the Reverse Merger, the Company sold
its two operating subsidiaries (the “Stock Sale”) to a company controlled by the
Company’s founders. As a result of the Reverse Merger, the stockholders of
Brendan acquired control of the Company. Brendan is engaged in the development
and marketing of scientific computer software for applications in the
pharmaceutical/biotechnical research, clinical diagnostic, environmental, and
other life and physical science markets.
Vote
Required
As
discussed in further detail below, the Amendment and the Plan required the
approval of stockholders holding a majority of the outstanding
votes.
Holders
of shares representing 13,767,578 votes executed the written consent in favor
of
the Amendment and the adoption of the Plan.
Meeting
Not Required
Under
Section 78.390 of the Nevada Revised Statues, an amendment to our Articles
of
Incorporation must be recommended by resolution of the Board of Directors and
be
approved of stockholders entitled to vote on any such amendment. Under Section
78.320 of the Nevada Revised Statues, an affirmative vote by stockholders
holding shares entitling them to exercise at least a majority of the voting
power is sufficient to amend the articles of incorporation. Section 78.320
of
the Nevada Revised Statues provides that, unless otherwise provided in a
corporation’s articles of incorporation, any action required or permitted to be
taken at a meeting of the stockholders may be taken without a meeting if,
without prior notice and without a vote, a written consent thereto is signed
by
stockholders holding not less than the minimum number of votes that would be
necessary to authorize or take such action. In order to eliminate the costs
and
management time involved in holding a special meeting, our Board of Directors
voted to utilize, and did in fact obtain, the written consent of stockholders
holding at least the requisite number of votes that would be necessary to
authorize or take such action.
Dissenters
Rights of Appraisal
There
are
no dissenter’s rights of appraisal applicable to this action to adopt the
Amendment and the Plan.
Security
Ownership of Certain Beneficial Owner and Management
The
following table provides information as of the Record Date regarding our Common
Stock beneficially owned by: (i) each person we know to beneficially own more
than 5% of our outstanding Common Stock; (ii) each of our directors and
executive officers; and (iii) all of our directors and executive officers as
a
group. Subject to applicable community property laws, to our knowledge each
person identified in the table has sole voting and investment power with respect
to the shares shown as beneficially owned. The address of each person in the
table is c/o Omni U.S.A., Inc. at 2236 Rutherford Road, Suite 107, Carlsbad,
California 92008.
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Shares
of Common
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Percentage
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Stock
Beneficially
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of
Outstanding
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Name
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Postion
with the Company
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Owned
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Shares
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Executive
Officers and
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Directors
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John
R. Dunn II
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Chairman
of the Board,
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4,950,000
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19.4%
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Chief
Executive Officer,
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Chief
Technical Officer and
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Director
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George
Dunn
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Vice
President, Secretary
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1,846,000
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7.1%
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and
Chief Operating Officer
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Lowell
W. Giffhorn
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Vice
President, Chief
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70,000
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*
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Financial
Officer and Director
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Theo
Vermaelen
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Director
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669,494
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2.6%
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Steven
Eisold
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Director
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724,359
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2.8%
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All
Exective Officers and
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Directors
as a Group
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(5
persons)
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8,259,853
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31.5%
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Greater
than 5% Owners
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Robert
Tabor
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4,730,589
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18.6%
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Robert
Kirk
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2,049,658
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8.0%
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Massoud
Kharrazian
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1,487,136
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5.8%
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*
Less than 1%
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AMENDMENT
OF THE ARTICLES OF INCORPORATION
The
Amendment will change our name to “Brendan Technologies, Inc.”. To become
effective, the Amendment must be filed with the Nevada Secretary of State.
We
intend to file the Amendment as soon as reasonably practicable following the
20th
day
following the mailing of this Information Statement to our
stockholders.
The
following summarizes the Amendment.
Name
Change
As
a
result of the Reverse Merger and the Stock Sale, our only business is the
business of Brendan. Accordingly, since we are engaged in the business conducted
by Brendan, our name after the Merger will be changed to reflect our new
business.
The
Amendment will change our name to “Brendan Technologies, Inc.” The voting and
other rights that accompany our securities will not be affected by the change
in
our name. Our ticker (trading) symbol, which is currently “OUSA.OB,” and the
CUSIP number will both change as a result of the name change. After the name
change, stockholders will be permitted to, but need not, exchange their
certificates to reflect the change in corporate name. However, the existing
certificate will continue to represent shares of our Common Stock as if the
corporate name had not changed. Our transfer agent will issue stock certificates
with the new company name as stock certificates are sent in upon transfers
of
shares by existing stockholders. The transfer agent for our common stock is
American Stock Transfer & Trust Co., 6201 15th
Ave.,
Brooklyn, NY 11219, telephone number (718) 921-8275.
Vote
Obtained
A
total
of 25,498,794 shares
of
Common Stock were issued and outstanding as of the Record Date. Out of this
total, the affirmative vote of a minimum of 12,749,398 shares
of
Common Stock was required for approval of the Amendment. On May 10, 2006,
stockholders, holding 13,767,578 shares
of
Common Stock, executed a written consent approving the Amendment. Pursuant
to
Section 78.390 of the Nevada Revised Statutes, an affirmative vote by
stockholders holding shares entitling them to exercise at least a majority
of
the voting power is sufficient to amend the articles of incorporation. Under
Section 78.320 of the Nevada Revised Statutes, unless otherwise provided in
our
articles of incorporation, any action required or permitted to be taken at
a
meeting of the stockholders may be taken without a meeting if, without prior
notice and without a vote, a written consent thereto is signed by stockholders
holding not less than the minimum number of votes that would be necessary to
authorize or take such action. Our By-Laws requires the same proportion of
votes. Accordingly, the Amendment was duly approved and no further votes will
be
needed.
2006
EQUITY INCENTIVE PLAN
The
Board
of Directors adopted the Plan to encourage selected persons to accept or
continue employment and to encourage selected employees, directors, consultants
and advisers to improve operations and increase the profitability of the
Company; and increase their interest in the welfare of the Company through
participation in the growth in value of the Common Stock. Employees, directors,
and consultants are eligible to receive awards under the Plan.
The
maximum number of shares of Common Stock that may be issued pursuant to awards
granted under the Plan is 7,500,000 subject
to adjustments in the event of a stock split, stock distribution or other
capital stock event, as described in the Plan. No more than 500,000 shares
may be awarded to any one participant in any 12-month period.
As
of the
date of this Information Statement, stock options to exercise up to 4,300,000
shares of Common Stock had been granted under the Plan of which stock options
to
exercise up to 3,840,000 shares of common stock with exercise prices ranging
from $0.025 to $0.75 per share were the result of the reverse merger between
Omni and Brendan effective as of December 29, 2005, and stock options to
exercise up to 460,000 shares of common stock with exercise prices ranging
from
$0.64 to $0.75 per share were granted subsequent to the reverse merger. All
of
the stock options expire five years from the date of grant. Currently, there
is
no plan to grant additional shares of Common Stock under the Plan; however,
in
the future, the Company intends to grant options to directors, officers,
employees and consultants as additional incentives.
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New
Plan Benefits
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2006
Equity Incentive Plan
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Name
and position
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Dollar
value
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Number
of
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($)
(1)
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units
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John
R. Dunn II, CEO
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$
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-
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100,000
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Executive
Group
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$
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340,000
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960,000
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Non-Executive
Director Group
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$
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-
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200,000
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Non-Executive
Officer Employee Group
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$
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727,000
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3,040,000
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(1)
Based on the closing ask price on July 7, 2006, $0.50, less the
exercise
price
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The
approximate number of people that may receive benefits from the Plan are as
follows: Chief Executive Officer- 1, executive group- 3, non-executive director
group- 6, and non-executive officer employee group- 20.
Administration
The
Plan
will be administered by the Board of Directors of the Company or, at the
discretion of the Board, a committee of the Board of Directors (the Board or
the
committee is hereafter referred to as the “Administrator”).
The
Administrator has full and final authority to select the recipients of awards
and to grant such awards. Subject to the provisions of the Plan, the
Administrator has sole and absolute discretion in determining the terms and
conditions of awards and the number of shares to be issued pursuant thereto,
including the exercise price and conditioning the receipt or vesting of awards
upon the achievement by the Company of specified performance criteria. Subject
to limitations imposed by law, the Board of Directors may amend or terminate
the
Plan at any time and in any manner. However, no such amendment or termination
may deprive the recipient of an award previously granted under the Plan or
any
rights thereunder without the consent of the recipient.
Terms
of Awards
The
Plan
authorizes the Administrator to make awards of stock options, stock appreciation
rights and shares of Common Stock subject to restrictions (restricted stock).
Stock options granted under the Plan may be either incentive stock options
(“ISOs”)
under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Internal
Revenue Code”)
or
options that are not intended to qualify as incentive stock options (referred
to
as “NQOs”).
Each
award will be evidenced by an agreement between the Company and the grantee
which will contain the terms and conditions required by the Plan and such other
terms and conditions not inconsistent therewith as the Administrator may deem
appropriate. However, all stock options granted under the Plan will have an
exercise price and a base value not less than the fair market value of the
Common Stock on the date of grant.
Awards
of
ISOs may be made only to employees of the Company. Awards of NQOs, stock
appreciation rights and restricted stock may be made to directors of the Company
and outside consultants and independent contractors, as well as to employees
of
the Company.
No
award
may be outstanding for more than ten years and an ISO issued to an employee
who
owns more than 10% of the voting stock of the Company may have a term of only
five years and must have an exercise price of no less than 110% of the fair
market value of the Common Stock on the date of grant.
Upon
the
occurrence of specified events, such as a dissolution, liquidation, merger,
or
sale of substantially all of the property and assets of the Company, an award
under the Plan will terminate, subject to certain actions of the Administrator,
within the Administrator’s discretion, to accelerate the vesting of benefits or
provide for the assumption by the surviving corporation or the acquiring
corporation of the award.
An
award
may permit the recipient to pay all or part of the purchase price of the shares
(and/or to pay all or part of such employee’s tax withholding obligation with
respect to such issuance) by (a) delivering previously owned shares of Common
Stock, (b) reducing the amount of shares or other property otherwise issuable
pursuant to the award or (c) delivering a promissory note, the terms and
conditions of which will be determined by the Administrator (if permitted by
the
Sarbanes-Oxley Act of 2002) and by means of a “cashless exercise” under rules
and regulations of the Securities Exchange Commission and the Federal Reserve
Board. If an option permits the recipient to pay for the shares issuable
pursuant thereto with shares issuable under the award, the recipient would
be
able to exercise the option in successive transactions, starting with a
relatively small number of shares and, by a series of exercises using shares
acquired from each such transaction to pay the purchase price of the shares
acquired in the following transaction, to exercise an option for a large number
of shares with no more investment than the original share or shares delivered.
Termination
of the Plan
The
Plan
will terminate ten years after its adoption by the Board of Directors of the
Company, except as to awards then outstanding, which awards will remain in
effect until they have been exercised, the restrictions have lapsed or the
awards have expired or been forfeited. The Board of Directors may also amend,
modify, suspend or terminate the Plan from time to time although no such action
can be taken without stockholder approval if required by applicable
law.
Certain
Federal Tax Consequences
The
following is a brief summary of the principal federal income tax consequences
of
awards under the Plan based on applicable provisions of the Internal Revenue
Code and regulations thereunder now in effect.
With
regard to incentive stock options, no income is recognized by the recipient
employee upon transfer to him of shares pursuant to his exercise of an incentive
stock option. In order to avail himself of this tax benefit, the employee must
make no disposition of the shares so received before he has held such shares
for
at least one year and at least two years have passed since he was granted the
option. Assuming compliance with this and other applicable tax provisions,
the
employee will realize long-term capital gain or loss when he or she disposes
of
the shares, measured by the difference between the exercise price and the amount
received for the shares at the time of disposition. If an eligible employee
disposes of shares acquired by exercise of an incentive stock option before
the
expiration of the above-noted periods, the gain arising from such disqualifying
disposition will be taxable as ordinary income in the year of disposition to
the
extent the lesser of (a) the fair market value of the shares on the date the
option was exercised, or (b) the amount realized upon such disposition, exceeds
the exercise price. Any amount realized in excess of the fair market value
on
the date of exercise is treated as long-term or short-term capital gain,
depending upon the holding period of the shares. If the amount realized upon
such disposition is less than the exercise price the loss will be treated as
long-term or short-term capital loss, depending upon the holding period of
the
shares.
For
purposes of the alternative minimum tax, the employee will recognize as an
addition to his or her tax base, upon the exercise of an incentive stock option,
an amount equal to the excess of the fair market value of the shares at the
time
of exercise over the exercise price. If a disqualifying disposition is made
in
the year of exercise, income for purposes of the regular income tax will be
recognized and the alternative minimum tax base will not additional be
increased.
With
regard to nonqualified stock options and stock appreciation rights, the holder
realizes ordinary income at the time of the exercise of an option or SAR in
an
amount equal to the excess of the fair market value of the shares on the date
of
exercise over the exercise price. Such income is subject to payroll tax
withholding if the holder is an employee. When a holder disposes of shares
acquired upon the exercise of a nonqualified stock option, any amount received
in excess of the fair market value of the shares on the date of exercise will
be
treated as long-term or short-term capital gain, depending upon the holding
period of the shares, and if the amount received is less than the fair market
value of the shares on the date of exercise, the loss will be treated as
long-term or short-term capital loss, depending upon on the holding period
of
the shares. With regard to restricted stock, unless the recipient elects to
recognize ordinary income at the time of receipt of an award, the recipient
will
not recognize taxable income upon the receipt of the award, but at the time
the
award vests will recognize ordinary income equal to the fair market value of
the
shares at the time of vesting.
Deduction
to the Company.
The
Company will be entitled to a deduction for federal income tax purposes at
the
same time and in the same amount as the recipient of an award is considered
to
have realized ordinary income in connection, assuming compliance with Section
162(m) of the Internal Revenue Code.
Vote
Obtained
A
total
of 25,498,794 shares
of
Common Stock were issued and outstanding on an as converted basis as of the
Record Date. Out of this total, the affirmative vote of a minimum of
12,749,398 shares
of
Common Stock were required for approval of the Plan. On May 10, 2006,
stockholders, holding 13,767,578 shares
of
Common Stock, executed a written consent approving the Plan. Pursuant to Section
78.320 of the Nevada Revised Statues, unless otherwise provided in our
certificate of incorporation, any action required or permitted to be taken
at a
meeting of the stockholders may be taken without a meeting if, without prior
notice and without a vote, a written consent thereto is signed by stockholders
holding not less than the minimum number of votes that would be necessary to
authorize or take such action. Accordingly, the Plan was duly approved and
no
further votes will be needed.
We
are
subject to the information requirements of the Securities Exchange Act of 1934,
as amended, and in accordance therewith file reports and other information
including annual and quarterly reports on Form 10-KSB and Form 10-QSB with
the
Securities and Exchange Commission. Reports and other information filed by
us
can be inspected and copied at the public reference facilities maintained at
the
Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, DC 20549. Copies of such material can be obtained upon written
request addressed to the Securities and Exchange Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, DC 20549, at prescribed rates.
The
Securities and Exchange Commission also maintains a web site on the internet
(http://www.sec.gov) where reports, proxy and information statements and other
information regarding issuers that file electronically with the Securities
and
Exchange Commission through the Electronic Data Gathering, Analysis and
Retrieval System may be obtained free of charge.
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By
Order of the
Board of Directors
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/s/ Lowell
W.Giffhorn |
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Lowell
W.Giffhorn, Chief Financial Officer
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APPENDIX
A
CERTIFICATE
OF AMENDMENT TO ARTICLES OF INCORPORATION
FOR
NEVADA PROFIT CORPORATIONS
(PURSUANT
TO NRS 78.385 AND 78.390—AFTER ISSUANCE OF STOCK)
1. Name
of
corporation: Omni U.S.A., Inc.
2. The
articles have been amended as follows (provide article numbers, if
available);
1. The
name of corporation.
Brendan
Technologies, Inc.
3. The
vote
by which the stockholders holding shares in the corporation entitling them
to
exercise at least a majority of the voting power, or such greater proportion
of
the voting power as may be required if the case of a vote by classes or series,
or as may be required by the provisions of the articles of incorporation have
voted in favor of the amendment is: 13,767,578 of 25,498,794 shares outstanding
(54%).
4. Effective
date of filing (optional):
________________________________________
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| 5. Officer
Signature (required): /s/ Lowell W.
Giffhorn |
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Lowell
W.
Giffhorn,
Chief Financial Officer
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APPENDIX
B
2006
EQUITY INCENTIVE PLAN
OF
OMNI
U.S.A., INC.
The
purposes of the 2006 Equity Incentive Plan (“Plan”) of OMNI U.S.A., INC., a
Nevada corporation (the “Company”), are to:
1.1 Encourage
selected employees, directors, consultants and advisers to improve operations
and increase the profitability of the Company;
1.2 Encourage
selected employees, directors, consultants and advisers to accept or continue
employment or association with the Company or its Affiliates; and
1.3 Increase
the interest of selected employees, directors, consultants and advisers in
the
Company’s welfare through participation in the growth in value of the common
stock of the Company, par value $.004995 per share (the “Common
Stock”).
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2.
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TYPES
OF AWARDS; ELIGIBLE
PERSONS
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2.1 The
Administrator (as defined below) may, from time to time, take the following
action, separately or in combination, under the Plan: (i) grant “incentive stock
options” (“ISOs”) intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
“Code”); (ii) grant “non-qualified options” (“NQOs,” and together with ISOs,
“Options”); (iii) grant or sell Common Stock subject to restrictions
(“restricted stock”) and (iv) grant stock appreciation rights (in general, the
right to receive the excess of the fair market value of Common Stock on the
exercise date over its fair market value on the grant date (“SARs”)), either in
tandem with Options or as separate and independent grants. Any such awards
may
be made to employees, including employees who are officers or directors, and
to
individuals described in Section 1 of this Plan who the Administrator believes
have made or will make a contribution to the Company or any Affiliate (as
defined below); provided,
however,
that
only a person who is an employee of the Company or any Affiliate at the date
of
the grant of an Option is eligible to receive ISOs under the plan. The term
“Affiliate” as used in this Plan means a parent or subsidiary corporation as
defined in the applicable provisions (currently Sections 424(e) and (f),
respectively) of the Code. The term “employee” includes an officer or director
who is an employee of the Company. The term “consultant” includes persons
employed by, or otherwise affiliated with, a consultant. The term “adviser”
includes persons employed by, or otherwise affiliated with, an adviser.
2.2 Except
as
otherwise expressly set forth in this Plan, no right or benefit under this
Plan
shall be subject in any manner to anticipation, alienation, hypothecation,
or
charge, and any such attempted action shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to debts, contracts,
liabilities, or torts of any option holder or any other person except as
otherwise may be expressly required by applicable law.
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3.
|
STOCK
SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF
GRANTS
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Subject
to the provisions of Sections 6.1.1 and 8.2 of this Plan, the total number
of
shares of Common Stock which may be offered, or issued as restricted stock
or on
the exercise of Options or SARs under the Plan shall not exceed seven million
five hundred thousand (7,500,000) shares of Common Stock. The shares subject
to
an Option or SAR granted under the Plan which expire, terminate or are cancelled
unexercised shall become available again for grants under this Plan. If shares
of restricted stock awarded under the Plan are forfeited to the Company or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan. Where the exercise price of an Option is
paid
by means of the optionee’s surrender of previously owned shares of Common Stock
or the Company’s withholding of shares otherwise issuable upon exercise of the
Option as may be permitted herein, only the net number of shares issued and
which remain outstanding in connection with such exercise shall be deemed
“issued” and no longer available for issuance under this Plan. No eligible
person shall be granted Options or other awards during any twelve-month period
covering more than five hundred thousand (500,000) shares.
4.1 This
Plan
shall be administered by the Board of Directors of the Company (the “Board”) or
by a committee (the “Committee”) to which administration of this Plan, or of
part of this Plan, is delegated by the Board (in either case, the
“Administrator”). The Board shall appoint and remove members of the Committee in
its discretion in accordance with applicable laws. At the Board’s discretion,
the Committee may be comprised solely of “non-employee directors” within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”), or “outside directors” within the meaning of Section 162(m) of
the Code. The Administrator may delegate non-discretionary administrative duties
to such employees of the Company as the Administrator deems proper and the
Board, in its absolute discretion, may at any time and from time to time
exercise any and all rights and duties of the Administrator under this
Plan.
4.2 Subject
to the other provisions of this Plan, the Administrator shall have the
authority, in its discretion: (i) to grant Options and SARs and grant or sell
restricted stock; (ii) to determine the fair market value of the Common Stock
subject to Options or other awards; (iii) to determine the exercise price of
Options granted, the economic terms of SARs granted, or the offering price
of
restricted stock; (iv) to determine the persons to whom, and the time or times
at which, Options or SARs shall be granted or restricted stock granted or sold,
and the number of shares subject to each Option or SAR or the number of shares
of restricted stock granted or sold; (v) to construe and interpret the terms
and
provisions of this Plan, of any applicable agreement and all Options and SARs
granted under this Plan, and of any restricted stock award under this Plan;
(vi)
to prescribe, amend, and rescind rules and regulations relating to this Plan;
(vii) to determine the terms and provisions of each Option and SAR granted
and
award of restricted stock (which need not be identical), including but not
limited to, the time or times at which Options and SARs shall be exercisable
or
the time at which the restrictions on restricted stock shall lapse; (viii)
with
the consent of the grantee, to rescind any award or exercise of an Option or
SAR
and to modify or amend the terms of any Option, SAR or restricted stock; (ix)
to
reduce the exercise price of any Option, the base value from which appreciation
is to be determined with respect to an SAR or the purchase price of restricted
stock; (x) to accelerate or defer (with the consent of the grantee) the exercise
date of any Option or SAR or the date on which the restrictions on restricted
stock lapse; (xi) to issue shares of restricted stock to an optionee in
connection with the accelerated exercise of an Option by such optionee; (xii)
to
authorize any person to execute on behalf of the Company any instrument
evidencing the grant of an Option. SAR or award of restricted stock; (xiii)
to
determine the duration and purposes of leaves of absence which may be granted
to
participants without constituting a termination of their employment for the
purposes of the Plan; and (xiv) to make all other determinations deemed
necessary or advisable for the administration of this Plan, any applicable
agreement, Option, SAR or award of restricted stock.
4.3 All
questions of interpretation, implementation, and application of this Plan or
any
agreement or Option, SAR or award of restricted stock shall be determined by
the
Administrator, which determination shall be final and binding on all
persons.
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5.
|
GRANTING
OF OPTIONS AND SARS;
AGREEMENTS
|
5.1 No
Options or SARs shall be granted under this Plan after ten (10) years from
the
date of adoption of this Plan by the Board.
5.2 Each
Option and SAR shall be evidenced by a written agreement, in form satisfactory
to the Administrator, executed by the Company and the person to whom such grant
is made. In the event of a conflict between the terms or conditions of an
agreement and the terms and conditions of this Plan, the terms and conditions
of
this Plan shall govern.
5.3 Each
agreement shall specify whether the Option it evidences is an NQO or an ISO,
provided,
however,
all
Options granted under this Plan to non-employee directors, consultants and
advisers of the Company are intended to be NQOs.
5.4 Subject
to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant
of Options or SARs under this Plan to persons who are expected to become
employees, directors, consultants or advisers of the Company, but are not
employees, directors, consultants or advisers at the date of
approval.
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6.
|
TERMS
AND CONDITIONS OF OPTIONS AND SARS
|
Each
Option and SAR granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQOs and SARs shall also be subject to
the
terms and conditions set forth in Section 6.2, but not those set forth in
Section 6.3. ISOs shall also be subject to the terms and conditions set forth
in
Section 6.3, but not those set forth in Section 6.2. SARs shall be subject
to
the terms and conditions of Section 6.4.
6.1 Terms
and Conditions to Which All Options and SARs Are Subject.
All
Options and SARs granted under this Plan shall be subject to the following
terms
and conditions:
6.1.1 Changes
in Capital Structure.
Subject
to Section 6.1.2, if the stock of the Company is changed by reason of a stock
split, reverse stock split, stock dividend, recapitalization, combination or
reclassification, or if the Company effects a spin-off of the Company’s
subsidiary, appropriate adjustments shall be made by the Administrator, in
its
sole discretion, in (a) the number and class of shares of stock subject to
this
Plan and each Option and SAR outstanding under this Plan, and (b) the exercise
price of each outstanding Option; provided,
that
the Company shall not be required to issue fractional shares as a result of
any
such adjustments. Any adjustment, however, in an outstanding Option shall be
made without change in the total price applicable to the unexercised portion
of
the Option but with a corresponding adjustment in the price for each share
covered by the unexercised portion of the Option. Adjustments under this Section
6.1.1 shall be made by the Administrator, whose determination as to the nature
of the adjustments that shall be made, and the extent thereof, shall be final,
binding, and conclusive. If an adjustment under this Section 6.1.1 would result
in a fractional share interest under an option or any installment, the
Administrator’s decision as to inclusion or exclusion of that fractional share
interest shall be final, but no fractional shares of stock shall be issued
under
the Plan on account of any such adjustment.
6.1.2 Corporate
Transactions.
Except
as otherwise provided in the applicable agreement, in the event of a Corporate
Transaction (as defined below), the Administrator shall notify each holder
of an
Option or SAR at least thirty (30) days prior thereto or as soon as may be
practicable. To the extent not then exercised all Options and SARs shall
terminate immediately prior to the consummation of such Corporate Transaction
unless the Administrator determines otherwise in its sole discretion;
provided.
however,
that
the Administrator, in its sole discretion, may (i) permit exercise of any
Options or SARs prior to their termination, even if such Options or SARs would
not otherwise have been exercisable, and/or (ii) provide that all or certain
of
the outstanding Options and SARs shall be assumed or an equivalent Option or
SAR
substituted by an applicable successor corporation or entity or any Affiliate
of
the successor corporation or entity. A “Corporate Transaction” means (i) a
liquidation or dissolution of the Company; (ii) a merger or consolidation of
the
Company with or into another corporation or entity (other than a merger with
a
wholly-owned subsidiary); (iii) a sale of all or substantially all of the assets
of the Company; or (iv) a purchase or other acquisition of more than 50% of
the
outstanding stock of the Company by one person or by more than one person acting
in concert.
6.1.3 Time
of Option or SAR Exercise.
Subject
to Section 5 and Section 6.3.4, an Option or SAR granted under the Plan shall
be
exercisable (a) immediately as of the effective date of the applicable agreement
or (b) in accordance with a schedule or performance criteria as may be set
by
the Administrator and specified in the applicable agreement. However, in no
case
may an Option or SAR be exercisable until a written agreement in form and
substance satisfactory to the Company is executed by the Company and the
grantee.
6.1.4 Grant
Date.
The
date of grant of an Option or SAR under the Plan shall be the effective date
of
the applicable agreement.
6.1.5 Non-Transferability
of Rights.
Except
with the express written approval of the Administrator, which approval the
Administrator is authorized to give only with respect to NQOs and SARs, no
Option or SAR granted under this Plan shall be assignable or otherwise
transferable by the grantee except by will or by the laws of descent and
distribution. During the life of the grantee, an Option or SAR shall be
exercisable only by the grantee.
6.1.6 Payment.
Except
as provided below, payment in full, in cash, shall be made for all stock
purchased at the time written notice of exercise of an Option is given to the
Company and the proceeds of any payment shall be considered general funds of
the
Company. The Administrator, in the exercise of its absolute discretion after
considering any tax, accounting and financial consequences, may authorize any
one or more of the following additional methods of payment:
(a) Subject
to the Sarbanes-Oxley Act of 2002, acceptance of the optionee’s full recourse
promissory note for all or part of the Option price, payable on such terms
and
bearing such interest rate as determined by the Administrator (but in no event
less than the minimum interest rate specified under the Code at which no
additional interest or original issue discount would be imputed), which
promissory note may be either secured or unsecured in such manner as the
Administrator shall approve (including, without limitation, by a security
interest in the shares of the Company);
(b) Subject
to the discretion of the Administrator and the terms of the stock option
agreement granting the Option, delivery by the optionee of shares of Common
Stock already owned by the optionee for all or part of the Option price,
provided the fair market value (determined as set forth in Section 6.1.9) of
such shares of Common Stock is equal on the date of exercise to the Option
price, or such portion thereof as the optionee is authorized to pay by delivery
of such stock;
(c) Subject
to the discretion of the Administrator, through the surrender of shares of
Common Stock then issuable upon exercise of the Option, provided the fair market
value (determined as set forth in Section 6.1.9) of such shares of Common Stock
is equal on the date of exercise to the Option price, or such portion thereof
as
the optionee is authorized to pay by surrender of such stock; and
(d) By
means
of so-called cashless exercises as permitted under applicable rules and
regulations of the Securities and Exchange Commission and the Federal Reserve
Board.
6.1.7 Withholding
and Employment Taxes.
At the
time of exercise and as a condition thereto, or at such other time as the amount
of such obligation becomes determinable, the grantee of an Option or SAR shall
remit to the Company in cash all applicable federal and state withholding and
employment taxes. Such obligation to remit may be satisfied, if authorized
by
the Administrator in its sole discretion, after considering any tax, accounting
and financial consequences, by the holder’s (i) delivery of a promissory note in
the required amount on such terms as the Administrator deems appropriate, (ii)
tendering to the Company previously owned shares of Common Stock or other
securities of the Company with a fair market value equal to the required amount,
or (iii) agreeing to have shares of Common Stock (with a fair market value
equal
to the required amount), which are acquired upon exercise of the Option or
SAR,
withheld by the Company.
6.1.8 Other
Provisions.
Each
Option and SAR granted under this Plan may contain such other terms, provisions,
and conditions not inconsistent with this Plan as may be determined by the
Administrator, and each ISO granted under this Plan shall include such
provisions and conditions as are necessary to qualify the Option as an
“incentive stock option” within the meaning of Section 422 of the
Code.
6.1.9 Determination
of Value.
For
purposes of this Plan, the fair market value of Common Stock or other securities
of the Company shall be determined as follows:
(a) If
the
stock of the Company is listed on a securities exchange or is regularly quoted
by a recognized securities dealer, and selling prices are reported, its fair
market value shall be the closing price of such stock on the date the value
is
to be determined, but if selling prices are not reported, its fair market value
shall be the mean between the high bid and low asked prices for such stock
on
the date the value is to be determined (or if there are no quoted prices for
the
date of grant, then for the last preceding business day on which there were
quoted prices).
(b) In
the
absence of an established market for the stock, the fair market value thereof
shall be determined in good faith by the Administrator, with reference to the
Company’s net worth, prospective earning power, dividend-paying capacity, and
other relevant factors, including the goodwill of the Company, the economic
outlook in the Company’s industry, the Company’s position in the industry, the
Company’s management, and the values of stock of other corporations in the same
or a similar line of business.
6.1.10 Option
and SAR Term.
No
Option or SAR shall be exercisable more than 10 years after the date of grant,
or such lesser period of time as is set forth in the applicable agreement (the
end of the maximum exercise period stated in the agreement is referred to in
this Plan as the “Expiration Date”).
6.2 Terms
and Conditions to Which Only NQOs Are Subject.
Options
granted under this Plan which are designated as NQOs shall be subject to the
following terms and conditions:
6.2.1 Exercise
Price.
The
exercise price of an NQO shall be no less than the fair market value of the
Common Stock on the date of grant.
6.2.2 Termination
of Employment.
Except
as otherwise provided in the applicable agreement, if for any reason a grantee
ceases to be employed by the Company or any of its Affiliates, Options that
are
NQOs and SARs held at the date of termination (to the extent then exercisable)
may be exercised in whole or in part at any time within ninety (90) days of
the
date of such termination (but in no event after the Expiration Date). For
purposes of this Section 6.2.2, “employment” includes service as a director,
consultant or adviser. For purposes of this Section 6.2.2, a grantee’s
employment shall not be deemed to terminate by reason of the grantee’s transfer
from the Company to an Affiliate, or vice versa, or sick leave, military leave
or other leave of absence approved by the Administrator, if the period of any
such leave does not exceed ninety (90) days or, if longer, if the grantee’s
right to reemployment by the Company or any Affiliate is guaranteed either
contractually or by statute.
6.3 Terms
and Conditions to Which Only ISOs Are Subject.
Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 Exercise
Price.
The
exercise price of an ISO shall not be less than the fair market value
(determined in accordance with Section 6.1.9) of the stock covered by the Option
at the time the Option is granted. The exercise price of an ISO granted to
any
person who owns, directly or by attribution under the Code (currently Section
424(d)), stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any Affiliate (a
“Ten
Percent Stockholder”) shall in no event be less than one hundred ten percent
(110%) of the fair market value (determined in accordance with Section 6.1.9)
of
the stock covered by the Option at the time the Option is granted.
6.3.2 Disqualifying
Dispositions.
If
stock acquired by exercise of an ISO granted pursuant to this Plan is disposed
of in a “disqualifying disposition” within the meaning of Section 422 of the
Code (a disposition within two (2) years from the date of grant of the Option
or
within one year after the issuance of such stock on exercise of the Option),
the
holder of the stock immediately before the disposition shall promptly notify
the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the Option as the Company may reasonably
require.
6.3.3 Grant
Date.
If an
ISO is granted in anticipation of employment as provided in Section 5.4, the
Option shall be deemed granted, without further approval, on the date the
grantee assumes the employment relationship forming the basis for such grant,
and, in addition, satisfies all requirements of this Plan for Options granted
on
that date.
6.3.4 Term.
Notwithstanding Section 6.1.10, no ISO granted to any Ten Percent Stockholder
shall be exercisable more than five (5) years after the date of
grant.
6.3.5 Termination
of Employment.
Except
as otherwise provided in the stock option agreement, if for any reason an
optionee ceases to be employed by the Company or any of its Affiliates, Options
that are ISOs held at the date of termination (to the extent then exercisable)
may be exercised in whole or in part at any time within ninety (90) days of
the
date of such termination (but in no event after the Expiration Date). For
purposes of this Section 6.3.5, an optionee’s employment shall not be deemed to
terminate by reason of the optionee’s transfer from the Company to an Affiliate,
or vice versa, or sick leave, military leave or other leave of absence approved
by the Administrator, if the period of any such leave does not exceed ninety
(90) days or, if longer, if the optionee’s right to reemployment by the Company
or any Affiliate is guaranteed either contractually or by statute.
6.4 Terms
and Conditions Applicable Solely to SARs.
In
addition to the other terms and conditions applicable to SARs in this Section
6,
the holder shall be entitled to receive on exercise of an SAR only Common Stock
at a fair market value equal to the benefit to be received by the
exercise.
7.1 An
optionee wishing to exercise an Option or SAR shall give written notice to
the
Company at its principal executive office, to the attention of the officer
of
the Company designated by the Administrator, accompanied by payment of the
exercise price and/or withholding taxes as provided in Sections 6.1.6 and 6.1.7.
The date the Company receives written notice of an exercise hereunder
accompanied by the applicable payment will be considered as the date such Option
or SAR was exercised.
7.2 Promptly
after receipt of written notice of exercise and the applicable payments called
for by Section 7.1, the Company shall, without stock issue or transfer taxes
to
the holder or other person entitled to exercise the Option or SAR, deliver
to
the holder or such other person a certificate or certificates for the requisite
number of shares of Common Stock. A holder or permitted transferee of an Option
or SAR shall not have any privileges as a stockholder with respect to any shares
of Common Stock to be issued until the date of issuance (as evidenced by the
appropriate entry on the books of the Company or a duly authorized transfer
agent) of such shares.
8.1 Grant
or
Sale of Restricted Stock.
8.1.1 No
awards
of restricted stock shall be granted under this Plan after ten (10) years from
the date of adoption of this Plan by the Board.
8.1.2 The
Administrator may issue shares under the Plan as a grant or for such
consideration (including services, and, subject to the Sarbanes-Oxley Act of
2002, promissory notes) as determined by the Administrator. Shares issued under
the Plan shall be subject to the terms, conditions and restrictions determined
by the Administrator. The restrictions may include restrictions concerning
transferability, repurchase by the Company and forfeiture of the shares issued,
together with such other restrictions as may be determined by the Administrator.
If shares are subject to forfeiture or repurchase by the Company, all dividends
or other distributions paid by the Company with respect to the shares may be
retained by the Company until the shares are no longer subject to forfeiture
or
repurchase, at which time all accumulated amounts shall be paid to the
recipient. All Common Stock issued pursuant to this Section 8 shall be subject
to a purchase or grant agreement, which shall be executed by the Company and
the
prospective recipient of the shares prior to the delivery of certificates
representing such shares to the recipient. The purchase or grant agreement
may
contain any terms, conditions, restrictions, representations and warranties
required by the Administrator. The certificates representing the shares shall
bear any legends required by the Administrator. The Administrator may require
any purchaser of restricted stock to pay to the Company in cash upon demand
amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded,
the
Administrator may withhold that amount from other amounts payable by the Company
to the purchaser, including salary, subject to applicable law. With the consent
of the Administrator in its sole discretion, a purchaser may deliver Common
Stock to the Company to satisfy this withholding obligation. Upon the issuance
of restricted stock, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued.
8.2 Changes
in Capital Structure.
In the
event of a change in the Company’s capital structure, as described in Section
6.1.1, appropriate adjustments shall be made by the Administrator, in its sole
discretion, in the number and class of restricted stock subject to this Plan
and
the restricted stock outstanding under this Plan; provided,
however,
that
the Company shall not be required to issue fractional shares as a result of
any
such adjustments.
8.3 Corporate
Transactions.
In the
event of a Corporate Transaction, as defined in Section 6.1.2 hereof, to the
extent not previously forfeited, all restricted stock shall be forfeited
immediately prior to the consummation of such Corporate Transaction unless
the
Administrator determines otherwise in its sole discretion; provided,
however,
that
the Administrator, in its sole discretion, may remove any restrictions as to
any
restricted stock. The Administrator may, in its sole discretion, provide that
all outstanding restricted stock participate in the Corporate Transaction with
an equivalent stock substituted by an applicable successor corporation subject
to the restriction.
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9.
|
EMPLOYMENT
OR CONSULTING
RELATIONSHIP
|
Nothing
in this Plan or any Option granted hereunder shall interfere with or limit
in
any way the right of the Company or of any of its Affiliates to terminate the
employment, consulting or advising of any optionee or restricted stock holder
at
any time, nor confer upon any optionee or restricted stock holder any right
to
continue in the employ of, or consult or advise with, the Company or any of
its
Affiliates.
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10.
|
CONDITIONS
UPON ISSUANCE OF
SHARES
|
10.1 Securities
Act.
Shares
of Common Stock shall not be issued pursuant to the exercise of an Option or
the
receipt of restricted stock unless the exercise of such Option or such receipt
of restricted stock and the issuance and delivery of such shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended (the “Securities
Act”).
10.2 Non-Compete
Agreement.
As a
further condition to the receipt of Common Stock pursuant to the exercise of
an
Option or the receipt of restricted stock, the optionee or recipient of
restricted stock may be required not to render services for any organization,
or
engage directly or indirectly in any business, competitive with the Company
at
any time during which (i) an Option is outstanding to such Optionee and for
six
(6) months after any exercise of an Option or the receipt of Common Stock
pursuant to the exercise of an Option and (ii) restricted stock is owned by
such
recipient and for six (6) months after the restrictions on such restricted
stock
lapse. Failure to comply with this condition shall cause such Option and the
exercise or issuance of shares thereunder and/or the award of restricted stock
to be rescinded and the benefit of such exercise, issuance or award to be repaid
to the Company.
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11.
|
NON-EXCLUSIVITY
OF THIS PLAN
|
The
adoption of this Plan shall not be construed as creating any limitations on
the
power of the Company to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options other
than under this Plan.
Each
optionee, holder of an SAR or recipient of restricted stock, if so requested
by
the Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the Company under the
Securities Act, shall not sell or otherwise transfer any shares of Common Stock
acquired upon exercise of Options, SARs or receipt of restricted stock during
the 180-day period following the effective date of a registration statement
of
the Company filed under the Securities Act; provided,
however,
that
such restriction shall apply only to a registration statement of the Company
which includes securities to be sold on behalf of the Company to the public
in
an underwritten public offering under the Securities Act and the restriction
period shall not exceed 90 days after the registration statement becomes
effective.
The
Board
may at any time amend, alter, suspend or discontinue this Plan. Without the
consent of an optionee, holder of an SAR or holder of restricted stock, no
amendment, alteration, suspension or discontinuance may adversely affect such
person’s outstanding Option(s), SAR(s) or the terms applicable to restricted
stock except to conform this Plan and ISOs granted under this Plan to the
requirements of federal or other tax laws relating to incentive stock options.
No amendment, alteration, suspension or discontinuance shall require stockholder
approval unless (a) stockholder approval is required to preserve incentive
stock
option treatment for federal income tax purposes or (b) the Board otherwise
concludes that stockholder approval is advisable.
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14.
|
EFFECTIVE
DATE OF PLAN;
TERMINATION
|
This
Plan
shall become effective upon adoption by the Board; provided,
however,
that no
Option or SAR shall be exercisable unless and until written consent of the
stockholders of the Company, or approval of stockholders of the Company voting
at a validly called stockholders’ meeting, is obtained within twelve (12) months
after adoption by the Board. If any Options or SARs are so granted and
stockholder approval shall not have been obtained within twelve (12) months
of
the date of adoption of this Plan by the Board, such Options and SARs shall
terminate retroactively as of the date they were granted. Awards may be made
under this Plan and exercise of Options and SARs shall occur only after there
has been compliance with all applicable federal and state securities laws.
This
Plan (but not Options and SARs previously granted under this Plan) shall
terminate within ten (10) years from the date of its adoption by the Board.
Termination shall not affect any outstanding Options or SARs or the terms
applicable to previously awarded restricted stock.
B
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8