EXHIBIT 10.10
PERARDUA CORPORATION
STOCK INCENTIVE PLAN
ARTICLE 1
DEFINITIONS
ARTICLE 1.1 Affiliate means any "subsidiary" or "parent corporation"
(within the meaning of Section 422 of the Code) of the Corporation.
ARTICLE 1.2 Agreement means a written agreement (including any
amendment or supplement thereto) between the Corporation and a Participant
specifying the terms and conditions of an Option or SAR granted to such
Participant.
ARTICLE 1.3 Board means the Board of Directors of the Corporation.
ARTICLE 1.4 Code means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
ARTICLE 1.5 Committee means the Compensation Committee of the Board or,
in the absence of such a committee, the Board.
ARTICLE 1.6 Common Stock means the Common Stock of the Corporation, par
value $0.01 per share.
ARTICLE 1.7 Corporation means PerArdua Corporation.
ARTICLE 1.8 Corresponding SAR means an SAR that is granted in relation
to a particular Option and that can be exercised only upon the surrender to the
Corporation, unexercised, of that portion of the Option to which the exercise of
the SAR relates.
ARTICLE 1.9 Fair Market Value means, on any given date, the fair market
value of a share of Common Stock determined by the Committee in good faith and
using any reasonable method.
ARTICLE 1.10 Initial Value means, with respect to an SAR, the Fair
Market Value of one share of Common Stock on the date of grant, as set forth in
the Agreement.
ARTICLE 1.11 Option means a stock option that entitles the holder to
purchase from the Corporation a stated number of shares of Common Stock at the
price set forth in the Agreement.
ARTICLE 1.12 Participant means an employee of the Corporation or of an
Affiliate, a member of the Board, or a consultant or other independent
contractor providing services to the Corporation, who satisfies the requirements
of Article 4 and is selected by the Committee to receive an Option.
ARTICLE 1.13 Plan means the PerArdua Corporation Stock Incentive Plan.
ARTICLE 1.14 SAR means a stock appreciation right that entitles the
holder to receive, with respect to each share of Common Stock encompassed by the
exercise of such SAR, the excess of the Fair Market Value at the time of
exercise over the Initial Value of the SAR. References to "SARs" include both
Corresponding SARs and SARs granted independently of Options, unless the context
requires otherwise.
ARTICLE 1.15 Ten Percent Shareholder means any individual owning more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation or an Affiliate. An individual shall be considered to
own any voting stock owned (directly or indirectly) by or for his brothers,
sisters, spouse, ancestors or lineal descendants and shall be considered to own
proportionately any voting stock owned (directly or indirectly) by or for a
corporation, partnership, estate or trust of which such individual is a
shareholder, partner or beneficiary.
ARTICLE 2
PURPOSES
The Plan is intended to assist the Corporation in recruiting and
retaining key employees, directors, advisors and consultants with ability and
initiative by enabling employees, directors, advisors and consultants who
contribute significantly to the Corporation or an Affiliate to participate in
its future success and to associate their interests with those of the
Corporation and its shareholders. The Plan is intended to permit the issuance of
both Options qualifying under Section 422 of the Code ("Incentive Stock
Options") and Options not so qualifying. No Option that is intended to be an
Incentive Stock Option shall be invalid for failure to qualify as an Incentive
Stock Option. The proceeds received by the Corporation for the sale of Common
Stock pursuant to this Plan shall be used for general corporate purposes.
ARTICLE 3
ADMINISTRATION
The Plan shall be administered by the Committee. If the Corporation
registers securities under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the individuals who serve as members of the
Committee on and after the date of such registration shall be individuals each
of whom is a "Non-Employee Director" within the meaning of Rule 16b-3
promulgated under Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Committee shall have authority to grant
Options and SARs upon such terms
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(not inconsistent with the provisions of this Plan) as the Committee may
consider appropriate. Such terms may include conditions (in addition to those
contained in this Plan) on the exercisability of all or any part of an Option or
SAR. Notwithstanding any such conditions, the Committee may, in its discretion,
accelerate the time at which any Option or SAR may be exercised; provided,
however, that in the event such acceleration would result in Incentive Stock
Options held by a Participant first becoming exercisable for shares having a
fair market value (determined on the date the Option was granted) in excess of
$100,000 in any calendar year such excess amount of Options shall cease to be
Incentive Stock Options simultaneous with their acceleration. In addition, the
Committee shall have complete authority to interpret all provisions of this
Plan; to prescribe the form of Agreements; to adopt, amend and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee or in connection with the administration
of this Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any
Agreement, Option or SAR. All expenses of administering this Plan shall be borne
by the Corporation.
ARTICLE 4
ELIGIBILITY
ARTICLE 4.1 General. Any employee, director, member of the advisory
board, independent contractor or consultant of the Corporation or of any
Affiliate (including any corporation that becomes an Affiliate after the
adoption of this Plan) who, in the judgment of the Committee, has contributed
significantly or can be expected to contribute significantly to the profits or
growth of the Company or an Affiliate may be granted one or more Options, SARs,
or Options and SARs.
ARTICLE 4.2 Grants. The Committee will designate individuals to whom
Options and SARs are to be granted and will specify the number of shares of
Common Stock subject to each grant. An Option may be granted with or without a
related SAR. A SAR may be granted with or without a related Option. All Options
and SARs granted under the Plan shall be evidenced by Agreements which shall be
subject to applicable provisions of this Plan and to such other provisions as
the Committee may adopt. No Participant may be granted Incentive Stock Options
or related SARs (under all Incentive Stock Option plans of the Corporation and
Affiliates) which are first exercisable in any calendar year for stock having an
aggregate Fair Market Value (determined as of the date an option is granted)
exceeding $100,000. The preceding annual limitation shall not apply with respect
to Options that are not Incentive Stock Options.
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ARTICLE 5
STOCK SUBJECT TO OPTIONS
Upon the exercise of any Option or Corresponding SAR, the Corporation
may deliver to the Participant authorized but unissued Common Stock. The maximum
aggregate number of shares of Common Stock that may be issued pursuant to
Options and Corresponding SARs granted under this Plan is 500,000, subject to
adjustment as provided in Article 9. If an Option is terminated or expires, in
whole or in part, for any reason other than its exercise or the exercise of a
Corresponding SAR, the number of shares of Common Stock allocated to the Option
or portion thereof may be reallocated to other Options or Options and
Corresponding SARs to be granted under this Plan.
ARTICLE 6
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an
Option shall be determined by the Committee on the date of grant. The price per
share for Common Stock purchased on the exercise of any Option that is an
Incentive Stock Option shall not be less than the Fair Market Value on the date
the Option is granted; provided, however, that the price per share shall not be
less than 110% of the Fair Market Value in the case of an Incentive Stock Option
that is granted to a Ten Percent Shareholder.
ARTICLE 7
EXERCISE OF OPTIONS
ARTICLE 7.1 Maximum Option or SAR Period. The maximum period in which
an Option or SAR may be exercised shall be determined by the Committee on the
date of grant. No Option that is an Incentive Stock Option or related SAR shall
be exercisable after the expiration of 10 years from the date the Option was
granted or 5 years in the case of an Incentive Stock Option or related SAR that
was granted to a Ten Percent Shareholder. The terms of any Option or SAR may
provide that it is exercisable for a period less than such maximum periods.
ARTICLE 7.2 Non-Transferability. Any Option or SAR granted under this
Plan shall be non-transferable except by will or by the laws of descent and
distribution. In the event of any such transfer, the Option and any related SAR
must be transferred to the same person or persons. During the lifetime of the
Participant to whom the Option or SAR is granted, the Option or SAR may be
exercised only by the Participant. No right or interest of a Participant in any
Option or SAR shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.
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ARTICLE 7.3 Employee Status. For purposes of determining the
applicability of Section 422 of the Code (relating to Incentive Stock Options),
or in the event that the terms of any Option or SAR provide that it may be
exercised only during employment or within a specified period of time after
termination of employment, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability or
other reasons shall not be deemed interruptions of continuous employment.
ARTICLE 7.4 General Restriction. Each Participant shall, prior to the
exercise of any Option, deliver to the Corporation any reasonable information in
order for the Corporation to be able to satisfy itself that the shares of Common
Stock issuable upon exercise of an Option will be acquired in accordance with
the terms of an applicable exemption from the securities registration
requirements of applicable federal and state securities law. With respect to
Options that are not Incentive Stock Options and without limiting the scope of
the Corporation's or the Committee's discretion to withhold approval or
otherwise administer this Plan, approval may be withheld to the extent that the
exercise, either individually or in the aggregate together with the exercise of
other previously exercised Options and/or offers and sales pursuant to any prior
or contemplated offering of securities, would, in the sole and absolute judgment
of the Corporation, require the filing of a registration statement with the
United States Securities and Exchange Commission or with the securities
commission of any state. The Corporation shall avail itself of any exemptions
from registration contained in applicable federal and state securities laws
which are reasonably available to the Corporation on terms which, in its sole
and absolute discretion, it deems reasonable and not unduly burdensome or
costly. If an Option which is not an Incentive Stock Option cannot be exercised
at the time it would otherwise expire due to the restrictions contained in this
Section, the exercise period for that Option shall be extended for successive
one-year periods until that Option can be exercised in accordance with this
Section.
ARTICLE 8
METHOD OF EXERCISE
ARTICLE 8.1 Exercise. Subject to the provisions of Articles 7 and 11,
an Option or SAR may be exercised in whole at any time or in part from time to
time at such times and in compliance with such requirements as the Committee
shall determine; provided, however, that an SAR that is related to an Incentive
Stock Option may be exercised only to the extent that the related Option is
exercisable and when the Fair Market Value exceeds the option price of any
related Option. Any Option or SAR granted under this Plan may be exercised with
respect to any number of whole shares less than the full number for which the
Option or SAR could be exercised. Such partial exercise of an Option or SAR
shall not affect the right to exercise the Option or SAR from time to time in
accordance with this Plan with respect to remaining shares subject to the Option
or related to the SAR. The exercise of either an Option or Corresponding SAR
shall result in the termination of the other to the extent of the number of
shares with respect to which the Option or Corresponding SAR is exercised.
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ARTICLE 8.2 Payment. Unless otherwise provided by the Agreement,
payment of the option price shall be made in cash or cash equivalent acceptable
to the Committee. If the Agreement provides, payment of all or part of the
option price may be made by surrendering shares of Common Stock to the
Corporation. If Common Stock is used to pay all or part of the option price, the
shares surrendered must have a Fair Market Value (determined as of the day
preceding the date of exercise) that is not less than such price or part
thereof.
ARTICLE 8.3 Determination of Payment of Cash and/or Common Stock Upon
Exercise of SAR. At the Committee's discretion, the amount payable as a result
of the exercise of an SAR may be settled in cash, Common Stock, or a combination
of cash and Common Stock. No fractional shares will be deliverable upon the
exercise of an SAR but a cash payment will be made in lieu thereof.
ARTICLE 8.4 Shareholder Rights. No Participant shall have any rights as
a shareholder with respect to shares subject to his Option or SAR until (i) the
Option or SAR shall have been exercised pursuant to the terms thereof, (ii) all
requirements under applicable law and regulations shall have been complied with
to the satisfaction of the Corporation, (iii) the Corporation shall have signed
and delivered a stock certificate representing the shares to the Participant and
(iv) the Participant's name shall have been entered as a stockholder of record
on the books of the Corporation.
ARTICLE 9
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Corporation effect one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar changes in
capitalization, then the maximum number of shares as to which Options and SARs
may be granted under this Plan shall be proportionately adjusted and the terms
of Options and SARs shall be adjusted as the Committee shall determine to be
equitably required. Any determination made under this Article 9 by the Committee
shall be final and conclusive.
This issuance by the Corporation of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares of obligations
of the Corporation convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
Options or SARs.
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ARTICLE 10
CHANGE IN CONTROL
ARTICLE 10.1 Definition of Change in Control. The following
transactions constitute "Change of Control" events:
a. the adoption of a plan of merger or consolidation of the
Corporation with any other corporation as a result of which the holders of the
outstanding voting stock of the Corporation as a group would receive less than
50% of the voting stock of the surviving or resulting corporation;
b. the adoption of a plan of liquidation or the approval of
the dissolution of the Corporation;
c. the sale or transfer of substantially all of the assets of
the Corporation; or
d. the transfer of more than 50% of the issued and outstanding
shares of Common Stock pursuant to a tender offer or exchange offer for shares
of Common Stock other than any such offer made by the Corporation or an
Affiliate.
ARTICLE 10.2 Effect on Outstanding Options and SARs. In the event of a
Change in Control of the Corporation, the Committee, as constituted before such
Change in Control, in its sole discretion may, as to any outstanding Option or
SAR, either at the time the Option or SAR is granted or any time thereafter,
take any one or more of the following actions: (i) provide for the acceleration
of any time periods relating to the exercise or realization of any such Option
or SAR so that such Option or SAR may be exercised or realized in full on or
before a date initially fixed by the Committee; (ii) provide for the purchase or
settlement of any such Option or SAR by the Company for an amount of cash equal
to the amount which could have been obtained upon the exercise of such Option or
SAR or realization of such Participant's rights had such Option or SAR been
currently exercisable or payable; (iii) make such adjustment to any such Option
or SAR then outstanding as the Committee deems appropriate to reflect such
Change in Control; or (iv) cause any such Option or SAR then outstanding to be
assumed, or new rights substituted therefor, by the acquiring or surviving
corporation in such Change in Control.
ARTICLE 10.3 Notice. Holders of Options will be mailed notice of any
anticipated transaction described in Section 10.1 at least 20 days prior to the
occurrence of such event.
ARTICLE 11
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall be issued,
no certificates for shares of Common Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all applicable federal
and state laws and regulations (including, without limitation,
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withholding tax requirements) and the rules of all domestic stock exchanges on
which the Corporation's shares may be listed. The Corporation shall have the
right to rely on an opinion of its counsel as to such compliance. Any share
certificate issued to evidence Common Stock for which an Option or SAR is
exercised may bear such legends and statements as the Committee may deem
advisable to assure compliance with federal and state laws and regulations. No
Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificate for shares shall be delivered, and no payment shall be made under
this Plan until the Corporation has obtained such consent or approval as the
Committee may deem advisable from regulatory bodies having jurisdiction over
such matters. The exercise of any Option granted under this Plan shall
constitute a Participant's full and complete consent to whatever action the
Committee deems necessary to satisfy any federal and state tax withholding
requirements which the Committee, acting in its discretion, deems applicable to
such exercise.
ARTICLE 12
GENERAL PROVISIONS
ARTICLE 12.1 Effect on Employment. Neither the adoption of this Plan,
its operation, nor any documents describing or referring to this Plan (or any
part thereof) shall confer upon any employee any right to continue in the employ
of the Corporation or an Affiliate or in any way affect any right and power of
the Corporation or an Affiliate to terminate the employment of an employee at
any time with or without assigning a reason thereunder.
ARTICLE 12.2 Unfunded Plan. The Plan, insofar as it provides for
grants, shall be unfunded, and the Corporation shall not be required to
segregate any assets that may at any time be represented by grants under this
Plan. Any liability of the Corporation to any person with respect to any grant
under this Plan shall be based solely upon any contractual obligations that may
be created pursuant to this Plan. No such obligation of the Corporation shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Corporation.
ARTICLE 12.3 Rules of Construction. Headings are given to the articles
and sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
ARTICLE 12.4 Section 16. This Plan is intended to comply with all
aspects of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder in the event the Corporation shall register securities
under Section 12 of the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void to
the extent permitted by law and deemed advisable by the Committee.
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ARTICLE 13
AMENDMENT
The Board may amend from time to time or terminate this Plan; provided,
however, that no amendment may become effective until shareholder approval is
obtained if the amendment (i) increases the aggregate number of shares that may
be issued pursuant to Options and SARs, (ii) reduces the option price, (iii)
changes the class of employees who may be granted Incentive Stock Options, (iv)
changes the class of employees, directors or consultants eligible to become
Participants, or (v) in some other way confers a material benefit on
Participants. No amendment shall, without a Participant's consent, adversely
affect any rights of such Participant under any Option or SAR outstanding at the
time such amendment is made.
ARTICLE 14
DURATION OF PLAN
No Option or SAR may be granted under this Plan after July 1, 2006.
Options and SARs granted before that date shall remain valid in accordance with
their terms.
ARTICLE 15
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that they may have
as directors of the Corporation or as members of the Committee, the members of
the Committee shall be indemnified by the Corporation against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided the settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in the action, suit or proceeding that the
Committee member is liable for negligence or misconduct in the performance of
his or her duties; provided that within sixty (60) days after institution of the
action, suit or proceeding a Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle and defend it.
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ARTICLE 16
EFFECTIVE DATE OF PLAN
Options and SARs may be granted under this Plan upon its adoption by
the Board, provided that no Option or SAR will be effective unless this Plan is
approved (at a duly held shareholders' meeting within twelve months of such
adoption) by shareholders holding a majority of the Corporation's outstanding
voting stock.
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