Exhibit 10.1
ARC WIRELESS SOLUTIONS, INC.
2007 STOCK INCENTIVE PLAN
This 2007 Stock Incentive Plan (the "Plan") is adopted in consideration for
services rendered and to be rendered to ARC Wireless Solutions, Inc.
1. Definitions.
The terms used in this Plan shall, unless otherwise indicated or
required by the particular context, have the following meanings:
Agreement: The written agreement (and any amendment or supplement
thereto) between the Company and an Eligible Person designating the terms and
conditions of an Award.
Award: Any Option, Restricted Stock or Restricted Stock Unit, together
with any other right or interest granted to a Participant pursuant to this Plan.
Board: The Board of Directors of ARC Wireless Solutions, Inc.
Change in Control: (i) The acquisition, directly or indirectly, by any
person or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934) of the beneficial ownership of more than fifty percent of
the outstanding securities of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated, (iii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company, (iv) a complete liquidation or
dissolution of the Company, or (v) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty percent
of the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.
Code: The Internal Revenue Code of 1986, as amended, from time to
time, including regulations thereunder and successor provisions and regulations
thereto.
Common Stock: The Common Stock of ARC Wireless Solutions, Inc.
Company: ARC Wireless Solutions, Inc., a corporation incorporated
under the laws of Utah, and any successors in interest by merger, operation of
law, assignment or purchase of all or substantially all of the property, assets
or business of the Company.
Continuous Status: The employment by, or relationship with, the
Company or any Related Company is not interrupted or terminated. The Board, at
its sole discretion, may determine whether Continuous Status shall be considered
interrupted due to personal or other mitigating circumstances, including leaves
of absence.
Date of Grant: The date on which an Option is granted under the Plan.
Eligible Person: Officers and Employees and other persons who provide
services to the Company or any Related Company, including directors of the
Company or any Related Company.
Employee: An Employee is an employee of the Company or any Related
Company.
Exchange Act: The Securities Exchange Act of 1934, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.
Exercise Price: The price per share of Common Stock payable upon
exercise of an Option.
Fair Market Value: Fair Market Value of a share of Common Stock shall
be the closing price of a share on the date of calculation (or on the last
preceding trading day if shares were not traded on such date) if the shares are
readily tradable on a national securities exchange or other market system, and
if the shares are not readily tradable, Fair Market Value shall be determined,
in good faith, by the Option Committee.
Incentive Stock Options ("ISOs"): An Option granted with the intention
that it qualify as an incentive stock option within the meaning of Section 422
of the Code or any successor provision thereto.
Non-Incentive Stock Options ("Non-ISOs"): Options which are not
intended to qualify as "Incentive Stock Options" under Section 422 of the Code
or any successor provision thereto.
Option: The rights granted to an Eligible Person to purchase Common
Stock pursuant to the terms and conditions of an Agreement.
Option Committee: The Plan shall be administered by the Option
Committee which shall consist of the Board or a committee of the Board as the
Board may time to time designate.
Option Shares: The shares of Common Stock underlying an Option granted
to an Eligible Person.
Optionee: An Eligible Person who has been granted an Option.
Participant: A person who has been granted an Option, Restricted Stock
or a Restricted Stock Unit which remains outstanding, including a person who is
no longer an Eligible Person.
Related Company: Any subsidiary of the Company and any other business
venture in which the Company has a significant interest as determined in the
discretion of the Option Committee.
Restricted Stock: An Award of shares of Common Stock granted to a
Participant pursuant to Section 15, subject to any restrictions and conditions
as are established pursuant to such Section 15.
Restricted Stock Unit: A right, granted to a Participant pursuant to
Section 15, to receive Common Stock, cash or a combination thereof at the end of
a specified deferral period.
Rule 16b-3: Rule 16b-3, promulgated by the SEC under Section 16 of the
Exchange Act, as from time to time in effect and applicable to this Plan.
2
Securities Act: The Securities Act of 1933, as amended from time to
time, including rules thereunder and successor provisions and rules thereto.
2. Purpose and Scope.
(a) The purpose of this Plan is to advance the interests of the
Company and its stockholders by affording Eligible Persons an opportunity for
investment in the Company and the incentive advantages inherent in stock
ownership in this Company.
(b) This Plan authorizes the Option Committee to grant Options to
purchase shares of Common Stock to Eligible Persons selected by the Option
Committee while considering criteria such as employment position or other
relationship with the Company, duties and responsibilities, ability,
productivity, length of service or association, morale, interest in the Company,
recommendations by supervisors, and other matters.
3. Administration of the Plan. The Plan shall be administered by the
Option Committee. The Option Committee shall have the authority granted to it
under this section and under each other section of the Plan. The Option
Committee shall have the authority, in its sole discretion, to determine the
type or types of Awards to be granted pursuant to the Plan. Such Awards may be
granted either alone, in addition to, or in tandem with, any other type of
Award.
In accordance with and subject to the provisions of the Plan and Rule
16b-3, the Option Committee shall select the Eligible Persons to receive Awards,
shall determine (i) the number of shares of Common Stock, Restricted Stock or
Restricted Stock Units to be subject to each Award, (ii) the time at which each
Award is to be granted, (iii) the extent to which the transferability of shares
of Common Stock issued or transferred pursuant to any Award is restricted, (iv)
the Fair Market Value of the Common Stock, (v) whether to accelerate the time of
exercisability of any Award that has been granted, (vi) the period or periods
and extent of exercisability of the Options, and (vii) the manner in which an
Option becomes exercisable. In addition, the Option Committee shall fix such
other terms of each Option, Restricted Stock Award and Restricted Stock Units as
the Option Committee may deem necessary or desirable. The Option Committee shall
determine the form, terms and provisions of each Agreement to evidence each
Award (which need not be identical).
The Option Committee from time to time may adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Option Committee shall keep minutes of
its meetings and those minutes shall be available to every member of the Board.
All actions taken and all interpretations and determinations made by
the Option Committee in good faith (including determinations of Fair Market
Value) shall be final and binding upon all Participants, the Company and all
other interested persons. No member of the Option Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, and all members of the Option Committee shall, in addition
to rights they may have if Directors of the Company, be fully protected by the
Company with respect to any such action, determination or interpretation.
4. The Common Stock. The Board is authorized to appropriate, issue and
sell for the purposes of the Plan, and the Option Committee is authorized to
grant Options, Restricted Stock and Restricted Stock Units with respect to, a
total number, not in excess of 300,000 shares of Common Stock, either treasury
3
or authorized but unissued, as adjusted pursuant to Section 16. All or any
unsold shares subject to an Option, Restricted Stock or Restricted Stock Units
that for any reason expires or otherwise terminates may again be made subject to
Options, Restricted Stock or Restricted Stock Units under the Plan.
5. Eligibility. Options which are intended to qualify as ISOs will be
granted only to Employees. Eligible Persons may hold more than one Option under
the Plan and may hold Options under the Plan and options granted pursuant to
other plans or otherwise, and may hold Restricted Stock and Restricted Stock
Units under the Plan.
6. Option Price. The Exercise Price for the Option Shares shall be
established by the Option Committee or shall be determined by a method
established by the Option Committee; provided that the Exercise Price to be paid
by Optionees for the Option Shares that are intended to qualify as ISOs, shall
not be less than 100 percent of the Fair Market Value of the Option Shares on
the Date of Grant (or, in the case of an individual who owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company, 110 percent of the Fair Market Value of the Option Shares on the
Date of Grant).
7. Duration and Exercise of Options.
(a) The option period shall commence on the Date of Grant and shall be
as set by the Option Committee, but not to exceed 10 years in length.
(b) The Option Committee may determine whether any Option shall be
exercisable in installments only; if the Option Committee determines that an
Option shall be exercisable in installments, it shall determine the number of
installments and the percentage of the Option exercisable at each installment
date. All such installments shall be cumulative.
(c) The Option Committee shall establish and set forth in each
Agreement that evidences an Option whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, after a termination
of Continuous Status, any of which provisions may be waived or modified by the
Option Committee at any time, provided that any such waiver or modification
shall satisfy the requirements for exemption under Section 409A of the Code.
(d) Each Option shall be exercised in whole or in part by delivering
to the Company (or to a brokerage firm designated or approved by the Company) of
written notice of the number of shares with respect to which the Option is to be
exercised and by paying in full the Exercise Price for the Option Shares
purchased as set forth in Section 8; provided, that an Option may not be
exercised in part unless the aggregate purchase price for the Option Shares
purchased is at least $1,000.
(e) No Option may be exercised under this Plan until the Plan is
approved by the shareholders of the Company as provided in Section 17 below.
8. Payment for Option Shares. If the aggregate purchase price of the
Option Shares purchased by any Optionee at one time exceeds $5,000, the Option
Committee may permit all or part of the Exercise Price for the Option Shares to
be paid by delivery to the Company for cancellation shares of the Company's
Common Stock owned by the Optionee with an aggregate Fair Market Value as of the
date of payment equal to the portion of the Exercise Price for the Option Shares
that the Optionee does not pay in cash. In the case of all other Option
4
exercises, the Exercise Price shall be paid in cash or check upon exercise of
the Option, except that the Option Committee may permit an Optionee to elect to
pay the Exercise Price upon the exercise of an Option by authorizing a third
party broker-dealer in securities approved by the Option Committee to sell some
or all of the Option Shares acquired upon exercise of an Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
9. Relationship to Employment or Position. Nothing contained in the Plan,
or in any Option, Restricted Stock Award or Restricted Stock Units granted
pursuant to the Plan, shall confer upon any Participant any right with respect
to continuance of employment by, or other relationship with, the Company, or
interfere in any way with the right of the Company to terminate the
Participant's employment as an Employee or other position or relationship, at
any time.
10. Nontransferability of Option. Except as otherwise provided by the
Option Committee, no Option granted under the Plan shall be transferable by the
Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution.
11. Rights as a Stockholder. No person shall have any rights as a
shareholder with respect to any share covered by an Option until that person
shall become the holder of record of such share and, except as provided in
Section 16, no adjustments shall be made for dividends or other distributions or
other rights as to which there is an earlier record date.
12. Securities Laws Requirements. No Option Shares shall be issued unless
and until, in the opinion of the Company, any applicable registration
requirements of the Securities Act of 1933, as amended, any applicable listing
requirements of any securities exchange on which stock of the same class is then
listed, and any other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery, have been fully complied with.
Each Option and each Option Share certificate may be imprinted with legends
reflecting federal and state securities laws, restrictions and conditions, and
the Company may comply therewith and issue "stop transfer" instructions to its
transfer agent and registrar in good faith without liability.
13. Disposition of Shares. Each Optionee, as a condition of exercise,
shall represent, warrant and agree, in a form of written certificate approved by
the Company, as follows: (a) that all Option Shares are being acquired solely
for his own account and not on behalf of any other person or entity; (b) that no
Option Shares will be sold or otherwise distributed in violation of the
Securities Act of 1933, as amended, or any other applicable federal or state
securities laws; and (c) that he will report all sales of Option Shares to the
Company in writing on a form prescribed by the Company; and (d) that if he is
subject to reporting requirements under Section 16(a) of the Exchange Act, (i)
he will not violate Section 16(b) of the Exchange Act, (ii) he will furnish the
Company with a copy of each Form 4 and Form 5 filed by him or her, and (iii) he
will timely file all reports required under the federal securities laws.
Each Optionee shall immediately notify the Company in writing of any
sale, transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of any
shares of Common Stock acquired through exercise of an ISO, within two years
after the grant of such ISO or within one year after the acquisition of such
shares, setting forth the date and manner of disposition, the number of shares
disposed of and the price at which such shares were disposed. The Company shall
be entitled to withhold from any compensation or other payments then or
thereafter due to the Optionee such amounts as may be necessary to satisfy any
withholding requirements of federal or state law or regulation and, further, to
collect from the Optionee any additional amounts which may be required for such
5
purpose. The Company may, in its discretion, require shares of Common Stock
acquired by an Optionee upon exercise of an ISO to be held in an escrow
arrangement for the purpose of enabling compliance with the provisions of this
section.
14. Incentive Stock Options. To the extent that the aggregate Fair Market
Value of Common Stock with respect to which ISO's are exercisable for the first
time by a Participant during any calendar year exceeds $100,000 or, if
different, the maximum limitation in effect at the Date of Grant under the Code
(the Fair Market Value being determined as of the Date of Grant for the Option),
such portion in excess of $100,000 shall be treated as Non-ISO's.
15. Restricted Stock and Restricted Stock Units.
(a) Restricted Stock. The Option Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
▇. ▇▇▇▇▇ and Restrictions. Restricted Stock shall
be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Option
Committee may impose, which restrictions may lapse
separately or in combination at such times, under such
circumstances (including based on achievement of performance
goals and/or future service requirements), in such
installments or otherwise, as the Option Committee may
determine at the date of grant or thereafter. During the
restricted period applicable to the Restricted Stock, the
Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the
Participant.
ii. Certificates for Stock. Restricted Stock
granted under this Plan may be evidenced in such manner as
the Option Committee shall determine. If certificates
representing Restricted Stock are registered in the name of
the Participant, the Option Committee may require that such
certificates bear an appropriate legend referring to the
terms, conditions and restrictions of the certificates, and
that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.
iii. Dividends and Splits. As a condition to the
grant of an Award of Restricted Stock, the Option Committee
may require or permit a Participant to elect that any cash
dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted
Stock or applied to the purchase of additional Awards under
this Plan. Unless otherwise determined by the Option
Committee, stock distributed in connection with a stock
split or stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with
respect to which such stock or other property has been
distributed.
(b) Restricted Stock Units. The Option Committee is authorized to
grant Restricted Stock Units to Participants, which are rights to receive Common
Stock at the end of a specified deferral period, subject to the following terms
and conditions:
6
i. Award and Restrictions. Settlement of an Award
of Restricted Stock Units shall occur upon expiration of the
deferral period specified for such Restricted Stock Unit by
the Option Committee (or, if permitted by the Option
Committee, as elected by the Participant). In addition,
Restricted Stock Units shall be subject to such restrictions
(which may include a risk of forfeiture) as the Option
Committee may impose, if any, which restrictions may lapse
at the expiration of the deferral period or at earlier
specified times (including based on achievement of
performance goals and/or future service requirements),
separately or in combination, in installments or otherwise,
as the Option Committee may determine. Restricted Stock
Units shall be satisfied by the delivery of cash or Common
Stock in the amount equal to the Fair Market Value for the
specified number of shares of Common Stock covered by the
Restricted Stock Units, or a combination thereof, as
determined by the Option Committee at the date of grant or
thereafter.
ii. Dividend Equivalents. Unless otherwise
determined by the Option Committee at date of grant,
Dividend Equivalents on the specified number of shares of
Common Stock covered by an Award of Restricted Stock Units
shall be either (a) paid with respect to such Restricted
Stock Units on the dividend payment date in cash or in
shares of unrestricted Common Stock having a Fair Market
Value equal to the amount of such dividends, or (b) deferred
with respect to such Restricted Stock Units and the amount
or value thereof automatically deemed reinvested in
additional Restricted Stock Units, other Awards or other
investment vehicles, as the Option Committee shall determine
or permit the Participant to elect.
(c) Waiver of Restrictions. The Option Committee, in its sole
discretion, may waive the repurchase or forfeiture period and any other terms,
conditions, or restrictions on any Restricted Stock or Restricted Stock Units
under such circumstances and subject to such terms and conditions as the Option
Committee shall deem appropriate; provided, however, that the Option Committee
may not adjust performance goals for any Restricted Stock or Restricted Stock
Units intended to be exempt under Section 162(m) of the Code for the year in
which the Restricted Stock or Restricted Stock Unit is settled in such a manner
as would increase the amount of compensation otherwise payable to a Participant.
7
16. Change in Stock, Adjustments, Etc. In the event that each of the
outstanding shares of Common Stock (other than shares held by dissenting
shareholders which are not changed or exchanged) should be changed into, or
exchanged for, a different number or kind of shares of stock or other securities
of the Company, or, if further changes or exchanges of any stock or other
securities into which the Common Stock shall have been changed, or for which it
shall have been exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividends,
reclassification, split-up, combination of shares or otherwise), then
appropriate adjustment shall be made by the Option Committee to the aggregate
number and kind of shares subject to this Plan, and the number and kind of
shares and the price per share subject to outstanding Options, Restricted Stock
and Restricted Stock Units as provided in the respective Agreements in order to
preserve, as nearly as practical, but not to increase, the benefits to
Participants.
17. Effective Date of Plan; Termination Date of Plan. Subject to the
approval of the Plan by the affirmative vote of the holders of a majority of the
Company's securities entitled to vote and represented at a meeting duly held in
accordance with applicable law, the Plan shall be deemed effective August 2,
2007. The Plan shall terminate at midnight on August 2, 2017, except as to
Options previously granted and outstanding under the Plan at that time. No
Options, Restricted Stock and Restricted Stock Units shall be granted after the
date on which the Plan terminates. The Plan may be abandoned or terminated at
any earlier time by the Board, except with respect to any Options, Restricted
Stock and Restricted Stock Units then outstanding under the Plan.
18. Withholding Taxes. The Company, or any Related Company, may take such
steps as it may deem necessary or appropriate for the withholding of any taxes
which the Company, or any Related Company, is required by any law or regulation
or any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Award including, but not limited to,
the withholding of all or any portion of any payment or the withholding of
issuance of Option Shares or Restricted Stock.
19. Change in Control.
In the event of a Change in Control of the Company, (a) the Option
Committee, in its discretion, may, at any time an Award is granted, or at any
time thereafter, accelerate the time period relating to the exercise or
realization of any Options, Restricted Stock and Restated Stock Units, and (b)
with respect to Options, Restricted Stock and Restricted Stock Units, the Option
Committee in its sole discretion may, at any time an Award is granted, or at any
time thereafter, take one or more of the following actions, which may vary among
individual Participants: (i) provide for the purchase of an Option, Restricted
Stock and Restricted Stock Units for an amount of cash or other property that
could have been received upon the exercise of the Option, Restricted Stock and
Restricted Stock Unit had the Option been currently exercisable, (ii) adjust the
terms of the Awards in a manner determined by the Option Committee to reflect
the Change in Control, (iii) cause the Awards to be assumed, or new rights
substituted therefor, by another entity, through the continuance of the Plan and
the assumption of outstanding Options, Restricted Stock and Restricted Stock
Units, or the substitution for such Options, Restricted Stock and Restricted
Stock Units of comparable value covering shares of a successor corporation, with
appropriate adjustments as to the number and kind of shares and exercise prices,
in which event the Plan and such Options, Restricted Stock and Restricted Stock
Units, or the new options and rights substituted therefor, shall continue in the
manner and under the terms so provided, (iv) accelerate the time at which
Options then outstanding may be exercised so that such Options may be exercised
for a limited period of time on or before a specified date fixed by the Option
Committee, after which specified date, all unexercised Options and all rights of
Optionees thereunder shall terminate, or (v) make such other provision as the
Committee may consider equitable.
8
20. Amendment.
(a) The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would impair the
right of a Participant under an outstanding Agreement. In addition, no such
amendment shall be made without the approval of the Company's shareholders to
the extent such approval is required by law or agreement.
(b) The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any Participant without the Participant's consent.
(c) Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without shareholder approval.
21. Other Provisions.
(a) The use of a masculine gender in the Plan shall also include
within its meaning the feminine, and the singular may include the plural, and
the plural may include the singular, unless the context clearly indicates to the
contrary.
(b) Any expenses of administering the Plan shall be borne by the
Company.
(c) This Plan shall be construed to be in addition to any and all
other compensation plans or programs. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the shareholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt such other additional incentive or other
compensation arrangements as the Board may deem necessary or desirable.
(d) The validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and the rights of any and
all personnel having or claiming to have an interest therein or thereunder shall
be governed by and determined exclusively and solely in accordance with the laws
of the State of Utah.
* * * * * * * *
9
