EQUITY INCENTIVE PLAN
of the plan is “HOME
EQUITY INCENTIVE PLAN.”
purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose presence and potential contributions are important to
success of the Company, and its Parent and Subsidiaries (if any), by offering
them an opportunity to participate in the Company’s future performance through
awards of Options, Restricted Stock and Stock Awards. Capitalized terms not
defined in the text are defined in Section 3.
in this Plan, the following terms will have the following meanings:
any award under this Plan, including any Option, Restricted Stock or Stock
with respect to each Award, the signed written agreement between the Company
the Participant setting forth the terms and conditions of the
the Board of Directors of the Company.
any cause, as defined by applicable law, for the termination of a Participant’s
employment with the Company or a Parent or Subsidiary of the
the Internal Revenue Code of 1986, as amended.
the Board of Directors.
Home System Group, a Nevada corporation, or any successor
disability, whether temporary or permanent, partial or total, as determined
the Securities Exchange Act of 1934, as amended.
the price at which a holder of an Option may purchase the Shares issuable upon
exercise of the Option.
as of any date, the value of a share of the Company’s Common Stock determined as
such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted
trading as reported in The Wall Street Journal;
such Common Stock is quoted on the NASDAQ National Market, its closing price
the NASDAQ National Market on the date of determination as reported in The
such Common Stock is publicly traded but is not listed or admitted to trading
a national securities exchange, the average of the closing bid and asked prices
on the date of determination as reported in The Wall Street
price per share at which shares of the Company’s Common Stock are initially
offered for sale to the public by the Company’s underwriters in the initial
public offering of the Company’s Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act if the Award is made
the effective date of such registration statement; or
none of the foregoing is applicable, by the Committee in good
an officer or director of the Company or any other person whose transactions
the Company’s Common Stock are subject to Section 16 of the Exchange
an award of an option to purchase Shares pursuant to Section 7.
any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the company
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
person who receives an Award under this Plan.
the factors selected by the Committee, in its sole and absolute discretion,
among the following measures to determine whether the performance goals
applicable to Awards have been satisfied:
revenue and/or net revenue growth;
Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;
Operating income and/or operating income growth;
income and/or net income growth;
Earnings per share and/or earnings per share growth;
stockholder return and/or total stockholder return growth;
Return on equity;
Operating cash flow return on income;
Adjusted operating cash flow return on income;
Economic value added; and
Individual business objectives.
Period” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured
Restricted Stock Awards or Stock Awards.
this Home System Group 2006 Equity Incentive Plan, as amended from time to
an award of Shares pursuant to Section 8.
the U.S. Securities and Exchange Commission.
the Securities Act of 1933, as amended.
shares of the Company’s Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 4 and 19, and any successor security.
an award of Shares, or cash in lieu of Shares, pursuant to Section
any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
combined voting power of all classes of stock in one of the other corporations
in such chain.
for purposes of this Plan with respect to a Participant, that the Participant
has for any reason ceased to provide services as an employee, officer, director,
consultant, independent contractor, or advisor to the Company or a Parent or
Subsidiary of the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or (iii)
any other leave of absence approved by the Company, provided that such leave
for a period of not more than 90 days, unless reemployment upon the expiration
of such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to a formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any employee on an
approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company
or a Subsidiary as it may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the Option
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the “Termination
SUBJECT TO THE PLAN.
of Shares Available.
to Sections 4.2 and 19, the total aggregate number of Shares initially reserved
and available for grant and issuance pursuant to this Plan will be 5,000,000
Shares and will include Shares that are subject to: (a) issuance upon exercise
of an Option but cease to be subject to such Option for any reason other than
exercise of such Option; (b) an Award granted hereunder but forfeited or
repurchased by the Company at the original issue price; and (c) an Award that
otherwise terminates without Shares being issued. At all times the Company
reserve and keep available a sufficient number of Shares as shall be required
satisfy the requirements of all outstanding Options granted under this Plan
all other outstanding but unvested Awards granted under this Plan.
event that the number of outstanding shares is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options, and (c) the number of Shares subject to other outstanding
Awards will be proportionately adjusted, subject to any required action by
Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued
but will either be replaced by a cash payment equal to the Fair Market Value
such fraction of a Share or will be rounded up to the nearest whole Share,
determined by the Committee.
defined in Section 7 below) may be granted only to employees (including officers
and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company or any Parent or Subsidiary of the Company, provided such consultants,
contractors and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. A person may
granted more than one Award under this Plan.
Plan will be administered by the Committee or by the Board acting as the
Committee. Subject to the general purposes, terms and conditions of this Plan,
and to the direction of the Board, the Committee will have full power to
implement and carry out this Plan. Without limitation, the Committee will have
the authority to:
construe and interpret this Plan, any Award Agreement and any other agreement
document executed pursuant to this Plan;
prescribe, amend and rescind rules and regulations relating to this Plan or
select persons to receive Awards;
determine the form and terms of Awards;
determine the number of Shares or other consideration subject to
determine whether Awards will be granted singly, in combination with, in tandem
with, in replacement of, or as alternatives to, other Awards under this Plan
any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;
grant waivers of Plan or Award conditions;
determine the vesting, exercisability and payment of Awards;
correct any defect, supply any omission or reconcile any inconsistency in this
Plan, any Award or any Award Agreement;
determine whether an Award has been earned; and
make all other determinations necessary or advisable for the administration
determination made by the Committee with respect to any Award will be made
the time of grant of the Award or, unless in contravention of any express term
of this Plan or Award, at any later time, and such determination will be final
and binding on the Company and on all persons having an interest in any Award
under this Plan. The Committee may delegate to one or more officers of the
Company the authority to grant an Award under this Plan to Participants who
not Insiders of the Company.
Committee may grant Options to eligible persons and will determine whether
Options will be Incentive Stock Options within the meaning of the Code (“ISO”)
or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the option
be exercised, and all other terms and conditions of the Option, subject to
of Option Grant.
Option granted under this Plan will be evidenced by an Award Agreement which
will expressly identify the Option as an ISO or an NQSO (hereinafter referred
as the “Stock Option Agreement”), and will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to
terms and conditions of this Plan.
date of grant of an Option will be the date on which the Committee makes the
determination to grant such Option, unless otherwise specified by the Committee.
The Stock Option Agreement and a copy of this Plan will be delivered to the
Participant within a reasonable time after the granting of the
may be exercisable within the times or upon the events determined by the
Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration
ten (10) years from the date the Option is granted; and provided further that no
ISO granted to a person who directly or by attribution owns more than ten
percent (10%) of the total combined voting power of all classes of stock of
Company or of any Parent or Subsidiary of the Company (“Ten Percent
Stockholder”) will be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee determines,
provided, however, that in all events a Participant will be entitled to exercise
an Option at the rate of at least 20% per year over five years from the date
grant, subject to reasonable conditions such as continued employment; and
further provided that an Option granted to a Participant who is an officer,
director or consultant may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company.
Exercise Price of an Option will be determined by the Committee when the Option
is granted and may be not less than 85% of the Fair Market Value of the Shares
on the date of grant; provided that: (a) the Exercise Price of an ISO will
not less than 100% of the Fair Market Value of the Shares on the date of grant;
and (b) the Exercise Price of an Option granted to a Ten Percent Stockholder
will not be less than 110% of the Fair Market Value of the Shares on the date
grant. Payment for the Shares purchased may be made in accordance with Section
10 of this Plan.
may be exercised only by delivery to the Company of a written stock option
exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee, (which need not be the same for each Participant), stating the number
of Shares being purchased, the restrictions imposed on the Shares purchased
under such Exercise Agreement, if any, and such representations and agreements
regarding the Participant’s investment intent and access to information and
other matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the Exercise
Price for the number of Shares being purchased.
Notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option will always be subject to the following:
the Participant’s service is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant’s Options only to
the extent that such Options would have been exercisable upon the Termination
Date no later than three (3) months after the Termination Date (or such longer
time period not exceeding five (5) years as may be determined by the Committee,
with any exercise beyond three (3) months after the Termination Date deemed
be an NQSO).
the Participant’s service is Terminated because of the Participant’s death or
Disability (or the Participant dies within three (3) months after a Termination
other than for Cause or because of Participant’s Disability), then the
Participant’s Options may be exercised only to the extent that such Options
would have been exercisable by the Participant on the Termination Date and
be exercised by the Participant (or the Participant’s legal representative) no
later than twelve (12) months after the Termination Date (or such longer time
period not exceeding five (5) years as may be determined by the Committee,
any such exercise beyond (i) three (3) months after the Termination Date when
the Termination is for any reason other than the Participant’s death or
Disability, or (ii) twelve (12) months after the Termination Date when the
Termination is for Participant’s death or Disability, deemed to be an
Notwithstanding the provisions in paragraph 7.6(a) above, if the Participant’s
service is Terminated for Cause, neither the Participant, the Participant’s
estate nor such other person who may then hold the Option shall be entitled
exercise any Option with respect to any Shares whatsoever, after Termination,
whether or not after Termination the Participant may receive payment from the
Company or a Subsidiary for vacation pay, for services rendered prior to
Termination, for services rendered for the day on which Termination occurs,
salary in lieu of notice, or for any other benefits. For the purpose of this
paragraph, Termination shall be deemed to occur on the date when the Company
dispatches notice or advice to the Participant that his service is
Committee may specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such minimum number will
not prevent the Participant from exercising the Option for the full number
Shares for which it is then exercisable.
aggregate Fair Market Value (determined as of the date of grant) of Shares
respect to which ISO are exercisable for the first time by a Participant during
any calendar year (under this Plan or under any other incentive stock option
plan of the Company, Parent or Subsidiary of the Company) will not exceed
$100,000. If the Fair Market Value of Shares on the date of grant with respect
to which ISO are exercisable for the first time by a Participant during any
calendar year exceeds $100,000, then the Options for the first $100,000 worth
Shares to become exercisable in such calendar year will be ISO and the Options
for the amount in excess of $100,000 that become exercisable in that calendar
year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date of this Plan to provide for
different limit on the Fair Market Value of Shares permitted to be subject
ISO, such different limit will be automatically incorporated herein and will
apply to any Options granted after the effective date of such amendment.
Extension or Renewal.
Committee may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefore, provided that any such action
may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise
may not be reduced below the minimum Exercise Price that would be permitted
under Section 7.4 of this Plan for Options granted on the date the action is
taken to reduce the Exercise Price.
Notwithstanding any other provision in this Plan, no term of this Plan relating
to ISO will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan
under Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any ISO under Section 422 of the Code.
Restricted Stock Award is an offer by the Company to sell to an eligible person
Shares that are subject to restrictions. The Committee will determine to whom
offer will be made, the number of Shares the person may purchase, the price
be paid (the “Purchase
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:
of Restricted Stock Award.
purchases under a Restricted Stock Award made pursuant to this Plan will be
evidenced by an Award Agreement (the “Restricted
Stock Purchase Agreement”)
will be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject
the terms and conditions of this Plan. The offer of Restricted Stock will be
accepted by the Participant’s execution and delivery of the Restricted Stock
Purchase Agreement and full payment for the Shares to the Company within thirty
(30) days from the date the Restricted Stock Purchase Agreement is delivered
the person. If such person does not execute and deliver the Restricted Stock
Purchase Agreement along with full payment for the Shares to the Company within
thirty (30) days, then the offer will terminate, unless otherwise extended
Purchase Price of Shares sold pursuant to a Restricted Stock Award will be
determined by the Committee on the date the Restricted Stock Award is granted
and may not be less than 85% of the Fair Market Value of the Shares on the
date, except in the case of a sale to a Ten Percent Stockholder, in which case
the Purchase Price will be 100% of the Fair Market Value. Payment of the
Purchase Price must be made in accordance with Section 10 of this
of Restricted Stock Awards.
Restricted Stock Awards shall be subject to such restrictions as the Committee
may impose. These restrictions may be based upon completion of a specified
number of years of service with the Company or upon completion of the
performance goals as set out in advance in the Participant’s individual
Restricted Stock Purchase Agreement. Restricted Stock Awards may vary from
Participant to Participant and between groups of Participants. Prior to the
grant of a Restricted Stock Award, the Committee shall: (a) determine the
nature, length and starting date of any Performance Period for the Restricted
Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may
awarded to the Participant. Prior to the payment of any Restricted Stock Award,
the Committee shall determine the extent to which such Restricted Stock Award
has been earned. Performance Periods may overlap and Participants may
participate simultaneously with respect to Restricted Stock Awards that are
subject to different Performance Periods and have different performance goals
and other criteria.
During Performance Period.
Participant is Terminated during a Performance Period for any reason, then
Participant will be entitled to payment (whether in Shares, cash or otherwise)
with respect to the Restricted Stock Award only to the extent earned as of
date of Termination in accordance with the Restricted Stock Purchase Agreement,
unless the Committee determines otherwise.
Award is an award of Shares (which may consist of Restricted Stock) for services
rendered to the Company or any Parent or Subsidiary of the Company. A Stock
Award will be awarded pursuant to an Award Agreement (the “Stock
will be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject
the terms and conditions of this Plan. A Stock Award may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant’s individual Stock Award Agreement (the “Performance Stock Award
Agreement”) that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Awards
vary from Participant to Participant and between groups of Participants, and
be based upon the achievement of the Company, Parent or Subsidiary and/or
individual performance factors or upon such other criteria as the Committee
of Stock Awards.
Committee will determine the number of Shares to be awarded to the Participant.
If the Stock Award is being earned upon the satisfaction of performance goals
pursuant to a Performance Stock Award Agreement, then the Committee will: (a)
determine the nature, length and starting date of any Performance Period for
each Stock Award; (b) select from among the Performance Factors to be used
measure the performance, if any; and (c) determine the number of Shares that
be awarded to the Participant. Prior to the payment of any Stock Award, the
Committee shall determine the extent to which such Stock Award has been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Stock Awards that are subject to different Performance Periods
and different performance goals and other criteria. The number of Shares may
fixed or may vary in accordance with such performance goals and criteria as
be determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Awards to take into account changes in law and
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships.
earned portion of a Stock Award may be paid to the Participant by the Company
either currently or on a deferred basis, with such interest or dividend
equivalent, if any, as the Committee may determine. Payment may be made in
form of cash or whole Shares or a combination thereof, either in a lump sum
payment or in installments, all as the Committee will determine.
FOR SHARE PURCHASES. Payment for Shares purchased pursuant to this Plan may
made in cash (by check) or, where expressly approved for the Participant by
Committee and where permitted by law:
cancellation of indebtedness of the Company to the Participant;
surrender of shares that either: (1) have been owned by the Participant for
than six (6) months and have been paid for within the meaning of SEC Rule 144
(and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (2) were
obtained by the Participant in the public market;
waiver of compensation due or accrued to the Participant for services
respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:
through a “same day sale” commitment from the Participant and a broker-dealer
that is a member of the National Association of Securities Dealers (an “NASD
Dealer”) whereby the Participant irrevocably elects to exercise the Option and
to sell a portion of the Shares so purchased to pay for the Exercise Price,
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
through a “margin” commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or
any combination of the foregoing.
Whenever Shares are to be issued in satisfaction of Awards granted under this
Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such Shares.
Whenever, under this Plan, payments in satisfaction of Awards are to be made
cash, such payment will be net of an amount sufficient to satisfy federal,
state, and local withholding tax requirements.
under applicable tax laws, a participant incurs tax liability in connection
the exercise or vesting of any Award that is subject to tax withholding and
Participant is obligated to pay the Company the amount required to be withheld,
the Committee may allow the Participant to satisfy the minimum withholding
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee and will be in writing in a form acceptable to
OF STOCK OWNERSHIP.
Participant will have any of the rights of a stockholder with respect to any
Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant will be a stockholder and will have all
rights of a stockholder with respect to such Shares, including the right to
and receive all dividends or other distributions made or paid with respect
such Shares; provided, that if such Shares are Restricted Stock, then any new,
additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will
subject to the same restrictions as the Restricted Stock.
Company will provide financial statements to each Participant prior to such
Participant’s purchase of Shares under this Plan, and to each Participant
annually during the period such Participant has Awards outstanding; provided,
however, the Company will not be required to provide such financial statements
to Participants whose services in connection with the Company assure them access
to equivalent information.
Awards of Stock and Restricted Stock granted under this Plan, and any interest
therein, will not be transferable or assignable by the Participant, and may
be made subject to execution, attachment or similar process, other than by
or by the laws of descent and distribution. Awards of Options granted under
Plan, and any interest therein, will not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the options are
be passed to beneficiaries upon the death of the trustor, or by gift to
“immediate family” as that term is defined in 17 C.F.R.
the lifetime of the Participant an Award will be exercisable only by the
Participant. During the lifetime of the Participant, any elections with respect
to an Award may be made only by the Participant unless otherwise determined
the Committee and set forth in the Award Agreement with respect to Awards that
are not ISOs.
restriction shall cease to apply to Shares received as a Stock Award or
Restricted Stock Award under this Plan at the time ownership of such shares
vests in the recipient of the Award. Similarly, this restriction shall not
to shares of stock received upon the exercise of vested Options.
certificates for Shares or other securities delivered under this Plan will
subject to such stop transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
ESCROW; PLEDGE OF SHARES.
enforce any restrictions on a Participant’s Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee
appropriately endorsed in blank, with the Company or an agent designated by
Company to hold in escrow until such restrictions have lapsed or terminated,
the Committee may cause a legend or legends referencing such restrictions to
placed on the certificates. Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge and deposit with the Company all
part of the Shares so purchased as collateral to secure the payment of the
Participant’s obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms
collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant’s Shares or other collateral.
In connection with any pledge of the Shares, the Participant will be required
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note
may be released from the pledge on a pro rata basis as the promissory note
EXCHANGE OF AWARDS.
Committee may, at any time or from time to time, authorize the Company, with
consent of the respective Participants, to issue new Awards in exchange for
surrender and cancellation of any or all outstanding Awards.
SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
will not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on
date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure
OBLIGATION TO EMPLOY.
in this Plan or any Award granted under this Plan will confer or be deemed
confer on any Participant any right to continue in the employ of, or to continue
any other relationship with, the Company or any Parent or Subsidiary of the
Company or limit in any way the right of the Company or any Parent or Subsidiary
of the Company to terminate Participant’s employment or other relationship at
any time, with or without cause.
or Replacement of Awards by Successor.
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other
a merger or consolidation with a wholly-owned subsidiary, a reincorporation
the Company in a different jurisdiction, or other transaction in which there
no substantial change in the stockholders of the Company or their relative
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted
replaced by the successor corporation (if any), which assumption, conversion
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject
repurchase restrictions no less favorable to the Participant. In the event
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Committee will determine. Notwithstanding anything in this Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a transaction described
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the
Treatment of Awards.
to any greater rights granted to Participants under the foregoing provisions
this Section 19, in the event of the occurrence of any transaction described
Section 19.1, any outstanding Awards will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation,
or sale of assets.
of Awards by the Company.
Company, from time to time, also may substitute or assume outstanding awards
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either; (a) granting an Award under this Plan
substitution of such other company’s award; or (b) assuming such award as if it
had been granted under this Plan if the terms of such assumed award could be
applied to an Award granted under this Plan. Such substitution or assumption
will be permissible if the holder of the substituted or assumed award would
been eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the terms and conditions of such award
remain unchanged (except that the exercise price and the number and nature
Shares issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option
be granted with a similarly adjusted Exercise Price.
AND EFFECTIVE DATE.
Equity Incentive Plan is effective as of September 29, 2006 the date it was
adopted by the Board.
shall be approved by the stockholders of the Company within twelve (12) months
before or after the date this Plan is adopted by the Board.
OF PLAN/GOVERNING LAW.
earlier terminated as provided herein, this Plan will terminate on December
2006. This Plan and all agreements thereunder shall be governed by and construed
in accordance with the laws of the State of Nevada.
AMENDMENT OR TERMINATION OF PLAN.
may at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without
approval of the stockholders of the Company, amend this Plan in any manner
requires such stockholder approval under the Code, if applicable, or by any
stock exchange or market on which the Common Stock of the Company is listed
OF THE PLAN.
the adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to
Plan shall be taken or made in the Committee’s sole and absolute