Exhibit 10.30

HERITAGE GLOBAL INC.

2016 STOCK OPTION PLAN

 

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TABLE OF CONTENTS

 

SECTION 1.

 

PURPOSE

1

 

 

 

 

SECTION 2.

 

Definitions

1

 

 

 

 

2.1.

 

“Affiliate”

1

 

 

 

 

2.2.

 

“Award”

1

 

 

 

 

2.3.

 

“Award Agreement”

1

 

 

 

 

2.4.

 

“Board of Directors” or “Board”

1

 

 

 

 

2.5.

 

“Change in Control”

1

 

 

 

 

2.6.

 

“Code”

2

 

 

 

 

2.7.

 

“Committee”

2

 

 

 

 

2.8.

 

“Common Stock”

2

 

 

 

 

2.9.

 

“Employee”

2

 

 

 

 

2.10.

 

“Exchange Act”

2

 

 

 

 

2.11.

 

“Fair Market Value”

2

 

 

 

 

2.12.

 

“ISO”

2

 

 

 

 

2.13.

 

“Non-Qualified Option”

2

 

 

 

 

2.14.

 

“Option”

2

 

 

 

 

2.15.

 

“Participant”

2

 

 

 

 

2.16.

 

“Person”

2

 

 

 

 

2.17.

 

“Regulations”

2

 

 

 

 

2.18.

 

“Share”

3

 

 

 

 

2.19.

 

“Subsidiary”

3

 

 

 

 

SECTION 3.

 

Eligibility

3

 

 

 

 

SECTION 4.

 

Common Stock Subject to the Plan

3

 

 

 

 

4.1.

 

Source of Shares

3

 

 

 

 

4.2.

 

Maximum Number of Shares

3

 

 

 

 

4.3.

 

Forfeitures

3

 

 

 

 

4.4.

 

Maximum Number of ISOs

3

 

 

 

 

SECTION 5.

 

Administration of the Plan

3

 

 

 

 

5.1.

 

Committee

3

 

 

 

 

5.2.

 

Options

3

 

 

 

 

5.3.

 

Plan Interpretation

3

 

 

 

 

5.4.

 

Committee Interpretations Conclusive

3

 

 

 

 

5.5.

 

Committee Voting

4

 

 

 

 

5.6.

 

Committee Exculpation

4

 

 

 

 

 

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SECTION 6.

 

Terms and Conditions of Options

4

 

 

 

 

6.1.

 

ISOs

4

 

 

 

 

6.2.

 

Non-Qualified Options

5

 

 

 

 

6.3.

 

Terms and Conditions Common to All Awards

5

 

 

 

 

6.4.

 

Payment of Exercise Price

6

 

 

 

 

6.5.

 

Modification of Options

6

 

 

 

 

6.6.

 

Rights as a Shareholder

6

 

 

 

 

6.7.

 

Fractional Shares

6

 

 

 

 

6.8.

 

Other Agreement Provisions

6

 

 

 

 

SECTION 7.

 

Adjustments

7

 

 

 

 

7.1.

 

Adjustment to Shares

7

 

 

 

 

7.2.

 

Substitution of Awards on Merger or Acquisition.

7

 

 

 

 

7.3.

 

Effect of Certain Transactions

7

 

 

 

 

7.4.

 

Limited Rights Upon Company’s Restructure

7

 

 

 

 

7.5.

 

Effect of Options on Company’s Capital and Business Structure

8

 

 

 

 

SECTION 8.

 

GENERAL PROVISIONS

8

 

 

 

 

8.1.

 

Effect of the Plan on Employment Relationship

8

 

 

 

 

8.2.

 

Amendment of the Plan

8

 

 

 

 

8.3.

 

Investment Purpose

8

 

 

 

 

8.4.

 

Indemnification of Committee

8

 

 

 

 

8.5.

 

Termination of the Plan

8

 

 

 

 

8.6.

 

Application of Funds

8

 

 

 

 

8.7.

 

No Obligation to Exercise Option

8

 

 

 

 

8.8.

 

Effective Date of the Plan

8

 

 

 

 

8.9.

 

Interpretation

9

 

 

 

 

8.10.

 

Compliance with Section 409A of the Code

9

 

 

 

 

8.11.

 

Compliance with Section 16 of the Exchange Act

9

 

 

 

 

8.12.

 

Headings

9

 

 

 

 

8.13.

 

Waiver of Jury Trial.

9

 

 

 

 

8.14.

 

Governing Law

9

 

 

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HERITAGE GLOBAL INC.

 

2016 Stock Option Plan

SECTION 1. PURPOSE. The purpose of the Heritage Global Inc. 2016 Stock Option
Plan (the “Plan”) is to promote the interests of Heritage Global Inc., a Florida
corporation (the “Company”), and its shareholders by providing an opportunity to
selected employees of the Company or any Subsidiary thereof to purchase Common
Stock of the Company, through the receipt of stock options to acquire stock in
the Company. By encouraging stock ownership, the Company seeks to attract,
retain and motivate such persons and to encourage such persons to devote their
best efforts to the business and financial success of the Company.  It is
intended that this purpose will be affected by the granting of “non-qualified
stock options” or “incentive stock options” to acquire the Common Stock of the
Company. Under the Plan, the Committee shall have the authority (in its sole
discretion) to grant “incentive stock options” within the meaning of section
422(b) of the Code and “non-qualified stock options” to which section 421 of the
Code does not apply.  With respect to any awards granted under the Plan that are
intended to comply with the requirements of “performance-based compensation”
under section 162(m) of the Code, the Plan shall be interpreted in a manner
consistent with such requirements. The Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974 (“ERISA”).

SECTION 2. DEFINITIONS. For purposes of the Plan, the following terms used
herein shall have the following meanings, unless a different meaning is clearly
required by the context.

2.1. “Affiliate” shall mean, with respect to (i) any person directly or
indirectly controlling, controlled by, or under common control with such person,
(ii) any officer, director, general partner, member or trustee of such person,
and (iii) any person who is an officer, director, general partner, member or
trustee of any person described in clauses (i) or (ii) of this sentence. For
purposes of this definition, the terms “controlling,” “controlled by,” or “under
common control with” shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person or
entity, whether through the ownership of voting securities, by contract or
otherwise, or the power to elect at least 50% of the directors, managers,
general partners, or persons exercising similar authority with respect to such
person or entities.

2.2. “Award” shall mean a right that is granted under the Plan to a Participant
by the Company, which may be in the form of Incentive Stock Options or
Nonqualified Stock Options.

2.3. “Award Agreement” shall mean a written agreement (including any amendment
or supplement thereto) between the Company or Subsidiary and a Participant
specifying the terms and conditions of an Award granted to such Participant.

2.4. “Board of Directors” or “Board”shall mean the Board of Directors of the
Company.

2.5. “Change in Control” shall mean the first to occur of:

2.5.1. The date that any one Person, or more than one Person acting as a group,
acquires ownership of stock of the Company that, together with stock held by
such Person or group, constitutes more than fifty percent (50%) of the total
voting power of the stock of Company; provided, however, that the merger or
consolidation of the Company with another entity as a result of which fifty
percent 50% or more of the outstanding voting securities of the surviving or
resulting entity (or of the parent entity of such resulting or surviving entity)
shall be owned in the aggregate by the shareholders of the Company immediately
prior to such merger or consolidation, shall not constitute a Change in Control.

2.5.2. The date of the merger or consolidation of the Company with another
entity as a result of which less than fifty percent (50%) of the outstanding
voting securities of the surviving or resulting entity (or of the parent entity
of such resulting or surviving entity) shall be owned in the aggregate by the
shareholders of the Company immediately prior to such merger or consolidation.

2.5.3. The date that a majority of members of the Board are replaced during any
twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date of the
appointment or election.

2.5.4. On the date that any one Person, or more than one Person acting as a
group, acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets,
directly or indirectly, from the Company that have a total gross fair market
value equal to or more than fifty percent (50%) of the total gross fair market
value of all of the assets owned, directly or indirectly, by the Company
immediately prior to such acquisition or acquisitions. Notwithstanding the
foregoing, a Change in Control shall not be deemed to have occurred

 

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under this Paragraph 2.5.4 (i) upon the acquisition or disposition of inventory
or assets held by the Company for resale; or (ii) when there is a transfer to an
entity that is controlled by the shareholders of the Company immediately after
the transfer as provided in the following sentence.  A transfer of assets by
Company is not treated as a change in the ownership of such assets if the assets
are transferred to (i) a shareholder of the Company (immediately before the
asset transfer) in exchange for or with respect to its stock in the Company,
(ii) an entity, fifty percent (50%) or more of the total voting power of which
is owned, directly or indirectly, by the Company, (iii) a Person, or more than
one Person acting as a group, that owns, directly or indirectly, fifty percent
(50%) or more of the total voting power of all the outstanding stock of the
Company, or (iv) an entity, at least fifty percent (50%) of the total value or
voting power of which is owned, directly or indirectly, by a person described in
(iii) of this Paragraph.

This definition of “Change in Control” is intended to be consistent with the
phrase “change in the ownership or effective control of the corporation, or in
the ownership of a substantial portion of the assets of the corporation” as used
in section 409A(a)(2)(A)(v) of the Code and the Regulations promulgated
thereunder and shall be interpreted and applied in a manner consistent with such
intent.

2.6. “Code” shall mean the Internal Revenue Code of 1986, as amended.

2.7. “Committee” shall mean the Compensation Committee of the Board of Directors
or such other committee as the Board of Directors shall appoint from time to
time to administer the Plan; provided, that the Committee shall at all times
consist of two or more persons, each of whom shall be a member of the Board of
Directors. To the extent required for transactions under the Plan to qualify for
the exemptions available under Rule 16b-3 promulgated under the Exchange Act,
members of the Committee (or any subcommittee thereof) shall be “non-employee
directors” within the meaning of Rule 16b-3. To the extent required for
compensation realized from Options under the Plan to be deductible by the
Company pursuant to section 162(m) of the Code, members of the Committee (or any
subcommittee thereof) shall be “outside directors” within the meaning of such
section.

2.8. “Common Stock” shall mean the common stock, $0.01 par value, of the
Company.

2.9. “Employee” shall mean any person who, at the time  an Option is granted to
such person, is an “employee,” as such term is used in section 422 of the Code
and described in Regulations section 1.421-1(h)(1), of the Company or a
Subsidiary.

2.10. “Exchange Act”shall mean the Securities Exchange Act of 1934, as amended.

2.11. “Fair Market Value”shall mean the fair market value of a share of Common
Stock as of any date, determined by applying the following rules:

2.11.1. If the principal market for the Common Stock is a national securities
exchange, then the fair market value as of that date shall be the reported
closing price of the Common Stock on that date on the principal exchange or
market on which the Common Stock is then listed or admitted to trading.

2.11.2. If sale prices are not available or if the principal market for the
Common Stock is not a national securities exchange, the fair market value of the
Common Stock shall be the reported closing price for the Common Stock on such
day as reported on the OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or a comparable service.

2.11.3. If the day is not a business day and as a result, Paragraphs 2.11.1 and
2.11.2 next above are inapplicable, the fair market value of the Common Stock
shall be determined as of the next earlier business day.

2.11.4. If Paragraphs 2.11.1, 2.11.2 and 2.11.3 next above are otherwise
inapplicable, then the fair market value of the Common Stock shall be determined
in good faith by the Committee in a manner consistent with section 409A of the
Code.

2.12. “ISO”shall mean an option to purchase Common Stock granted under the Plan
that constitutes and shall be treated as an “incentive stock option,” as such
phrase is defined in section 422(b) of the Code.

2.13. “Non-Qualified Option”shall mean an option to purchase Common Stock
granted to an Employee pursuant to the Plan that is not an “incentive stock
option,” with respect to which section 421 of the Code does not apply, and that
shall not constitute nor be treated as an ISO.

2.14. “Option”shall mean any ISO or Non-Qualified Option granted to an Employee
pursuant to this Plan.

2.15. “Participant”shall mean an Employee to whom an Option has been granted
pursuant to this Plan.

 

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2.16. “Person” “shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

2.17. “Regulations” shall mean the Federal Income Tax Regulations, including
Temporary Regulations promulgated under the Code, as such Regulations may be
amended from time to time (including corresponding provisions of succeeding
Regulations).

2.18. “Share” shall mean a share of Common Stock of Heritage Global Inc.

2.19. “Subsidiary”shall have the meaning set forth for “subsidiary corporation”
in section 424(f) of the Code.

SECTION 3. ELIGIBILITY. Options may be granted to any Employee.   The Committee
shall have the sole authority to select the persons to whom Options are to be
granted hereunder and to determine whether a person is to be granted an ISO, a
Non-Qualified Option, or any combination thereof. No person shall have any right
to participate in the Plan.  Any person selected by the Committee for
participation during any one period shall not by virtue of such participation
have the right to be selected as a Participant for any other period.  Any
Participant may hold at any time more than one (1) Award, but only upon such
terms as provided hereunder and any agreement evidencing such Awards.

SECTION 4. COMMON STOCK SUBJECT TO THE PLAN.

4.1. Source of Shares. Upon the exercise of an Option the Company shall deliver
to the Participant authorized but previously unissued Common Stock or Common
Stock that is held by the Company in treasury; provided, however, any Award may
be settled in cash at the discretion of the Committee as provided in Paragraphs
6.3.3 and 7.3.

4.2. Maximum Number of Shares. The maximum aggregate number of shares of Stock
that may be issued pursuant to the Plan is 3,150,000 shares.  The maximum number
of shares of Stock that may be subject to Options granted to any one Participant
during any calendar year is 450,000 shares of Common Stock. The aggregate number
of shares available for grant under this Plan and the number of shares of Common
Stock subject to outstanding awards shall be subject to adjustment as provided
in Section 7.1.

4.3. Forfeitures. If any Award granted hereunder expires or terminates for any
reason without having been exercised in full, the shares of Common Stock subject
thereto shall again be available for issuance of an Award under this Plan.

4.4. Maximum Number of ISOs.  Notwithstanding the provisions of Section 4.3, the
maximum aggregate number of shares of Stock that may be issued pursuant to
Incentive Stock Options under the Plan is 6,000,000 shares, subject to
adjustment as provided in Section 7.1, provided that no adjustment shall be made
and no shares of Common Stock may again be optioned, granted or awarded if such
action would cause an Incentive Stock Option to fail to qualify as an incentive
stock option under section 422 of the Code.

SECTION 5. ADMINISTRATION OF THE PLAN.

5.1. Committee. The Plan shall be administered by the Board or, as directed
specifically otherwise herein, by the Committee.

5.2. Options. The Committee shall have the sole authority and discretion under
the Plan (i) to select the Employees who are to be granted Awards hereunder;
(ii) to designate whether an Employee is to be granted an ISO or a Non-Qualified
Option; (iii) to establish the number of shares of Common Stock that may be
issued upon the exercise of each Option; (iv) to determine the time and the
conditions subject to which Options may be exercised in whole or in part; (v) to
determine the form of the consideration that may be used to purchase shares of
Common Stock upon exercise of any Option (including the circumstances under
which the Company’s issued and outstanding shares of Common Stock may be used by
a Participant to exercise an Option); (vi) to impose restrictions and/or
conditions with respect to shares of Common Stock acquired upon exercise of an
Award; (vii) to determine the circumstances under which shares of Common Stock
acquired upon exercise of any Award may be subject to repurchase by the Company;
(viii) to determine the circumstances and conditions subject to which shares
acquired upon exercise of an Award may be sold or otherwise transferred,
including, without limitation, the circumstances and conditions subject to which
a proposed sale of shares of Common Stock acquired upon exercise of an Award may
be subject to the Company’s right of first refusal (as well as the terms and
conditions of any such right of first refusal); (ix) to establish vesting
provisions for any Award relating to the time (or the circumstance) when the
Award may be exercised by a Participant, including vesting provisions that may
be contingent upon the Company meeting specified financial goals; (x) to
accelerate the time when outstanding Awards may be exercised; provided, however,
that such “acceleration” with respect to any Award is permitted only if such
acceleration would not cause the Award to be subject to the provisions of
section 409A of the Code; and (xi) to establish any other terms, restrictions
and/or conditions applicable to any Award not inconsistent with the provisions
of the Plan, so long as such terms do not cause an Award to be subject to
section 409A of the Code and, with respect to ISOs, not inconsistent with the
provisions of section 422  of the Code.

 

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5.3. Plan Interpretation.  The Committee shall be authorized to interpret the
Plan and any Award granted hereunder and may, from time to time, adopt such
rules and regulations, not inconsistent with the provisions of the Plan, as it
may deem advisable to carry out the purpose of the Plan.

5.4. Committee Interpretations Conclusive. The interpretation and construction
by the Committee of any provision of the Plan, any Option granted hereunder or
any Award Agreement evidencing any such Option shall be final and conclusive
upon all parties, except as may otherwise be determined by the Board of
Directors.

5.5. Committee Voting. Directors of the Company (or members of the Committee)
who are either eligible to receive Awards hereunder, or to whom Awards have been
granted hereunder, may vote on any matter affecting the administration of the
Plan or the granting of Awards under the Plan; provided, however, that no
director (or member of the Committee) shall vote upon the granting of an Award
to himself, but any such director (or Committee member) may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
(or the Committee) at which the Plan is administered or action is taken with
respect to the granting of any Award.

5.6. Committee Exculpation. All expenses and liabilities incurred by the
Committee in the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons in
connection with the administration of the Plan. The Company, and its officers
and directors, shall be entitled to rely upon the advice, opinions or valuations
of any such persons. No member of the Committee or Board of Directors shall be
liable for any action, determination or interpretation taken or made in good
faith with respect to the Plan or any Award granted hereunder.

SECTION 6. TERMS AND CONDITIONS  OF OPTIONS.

6.1. ISOs. The terms and conditions of each ISO granted under the Plan shall be
specified by the Committee, shall be set forth in an Award Agreement between the
Company and the Participant in such form as the Committee shall approve, and
shall be clearly identified therein as an ISO. The terms and conditions of each
ISO shall be such that each ISO issued hereunder shall constitute and be treated
as an “incentive stock option” as defined in section 422 of the Code. The terms
and conditions of any ISO granted hereunder need not be identical to those of
any other ISO granted hereunder. Notwithstanding the above, the terms and
conditions of each ISO shall include the following:

6.1.1. The exercise price shall not be less than one hundred percent (100%) (or
one hundred ten percent (110%) in the case of an Employee referred to in
Paragraph 6.1.3 hereof) of the Fair Market Value of the Shares of Common Stock
subject to the ISO on the date the ISO is granted, but in no event shall the
option price be less than the par value of such shares, which price shall be
payable in U.S. dollars upon the exercise of such ISO and paid, except as
otherwise provided in Section 6.5, in cash or by check immediately upon
exercise.

6.1.2. The Committee shall fix the term of all ISOs granted pursuant to the
Plan, including the date on which such ISO shall expire and terminate; provided,
however, that such term shall in no event exceed ten (10) years from the date on
which such ISO is granted (or, in the case of an ISO granted to an Employee
referred to in Paragraph 6.1.3 hereof, such term shall in no event exceed five
(5) years from the date on which such ISO is granted). Each ISO shall be
exercisable in such amount or amounts, under such conditions and at such times
or intervals or in such installments as shall be determined by the Committee in
its sole discretion. An Employee must exercise an ISO while he is an employee of
the Company or an Subsidiary or within three months of termination of employment
with the Company and its Subsidiaries (one year in the case of termination due
to disability or death), or, if sooner, within a period of time designated in
the Participant’s Agreement.

6.1.3. An ISO shall not be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of section 424(d)
of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or Subsidiary of the Company
(taking into account the attribution rules of section 424(d) of the Code),
unless the exercise price is at least one hundred ten percent (110%) of the Fair
Market Value (determined as of the time the ISO is granted) of the shares of
Common Stock subject to the ISO and the ISO by its terms is not exercisable more
than five (5) years from the date it is granted. Notwithstanding any other
provision of the Plan, the provisions of this Paragraph 6.1.3 shall not apply,
or be construed to apply, to any Non-Qualified Option granted under the Plan.

6.1.4. In the event the Company or any Subsidiary of the Company is required to
withhold the minimum Federal, state or local taxes in respect of any
compensation income realized by the Participant as a result of any
“disqualifying disposition” of any Shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or

 

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local taxes required to be so withheld or, if such payments are insufficient to
satisfy such Federal, state or local taxes, or if no such payments are due or to
become due to such Participant, then such Participant shall be required to pay
to the Company, or make other arrangements satisfactory to the Company regarding
payment to the Company of, the aggregate amount of any such taxes. All matters
with respect to the total amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Committee in its sole discretion.

6.1.5. If upon the exercise of one or more Options granted pursuant to this or
any other plan of the Company or any Subsidiary of the Company that are
designated as ISOs upon the grant thereof, a portion of such exercised Options
are not treated as ISOs pursuant to section 422(d) of the Code, which sets a
limit upon the aggregate Fair Market Value (determined at the time the ISOs are
granted) of stock subject to ISOs that may become exercisable by the optionee
thereof for the first time during any calendar year, then the Company shall
issue one or more certificates evidencing the Common Stock acquired pursuant to
the exercise of ISOs and one or more certificates evidencing the Common Stock
acquired pursuant to the exercise of Options not treated as ISOs in accordance
with section 422 of the Code and shall so identify such certificates in the
Company’s stock transfer records.

6.1.6. Following a transfer of stock to a Participant pursuant to such
Participant’s exercise of an ISO, the Company or any Subsidiary of the Company
shall (on or before January 31 of the calendar year following the year of such
transfer) furnish to such Participant the written statement prescribed by
section 6039 of the Code and the Regulations promulgated thereunder.

6.2. Non-Qualified Options.  The terms and conditions of each Non-Qualified
Option granted under the Plan shall be specified by the Committee, in its sole
discretion, shall be set forth in an Award Agreement between the Company and the
Participant in such form as the Committee shall approve, and such Option shall
be clearly identified therein as a Non-Qualified Option and shall be a
“non-qualified stock option” for Federal income tax purposes to which section
421 of the Code does not apply. The terms and conditions of any Non-Qualified
Option granted hereunder need not be identical to those of any other
Non-Qualified Option granted hereunder. Notwithstanding the above, the terms and
conditions of each Non-Qualified Option shall include the following:

6.2.1. The option price shall be as determined by the Committee, but shall not
be less than one hundred percent (100%) of the Fair Market Value of the Shares
of Common Stock subject to the Non-Qualified Option on the date such
Non-Qualified Option is granted nor less than the par value of such shares.

6.2.2. The Committee shall fix the term of all Non-Qualified Options granted
pursuant to the Plan (including the date on which such Non-Qualified Option
shall expire and terminate). Such term may be more than ten (10) years from the
date on which such Non-Qualified Option is granted. Each Non-Qualified Option
shall be exercisable in such amount or amounts, under such conditions, and at
such times or intervals or in such installments as shall be determined by the
Committee in its sole discretion and as set forth in the agreement evidencing
such Non-Qualified Stock Option.

6.2.3. In the event the Company or a Subsidiary thereof is required to withhold
the minimum Federal, state or local taxes in respect of any compensation income
realized by the Participant in respect of a Non-Qualified Option granted
hereunder or in respect of any shares of Common Stock acquired upon exercise of
a Non-Qualified Option, the Company or a Subsidiary thereof shall deduct from
any payments of any kind otherwise due to such Participant the aggregate amount
of such Federal, state or local taxes required to be so withheld or, if such
payments are insufficient to satisfy such Federal, state or local taxes, or if
no such payments are due or to become due to such Participant, then such
Participant shall be required to pay to the Company, or make other arrangements
satisfactory to the Company regarding payment to the Company of, the aggregate
amount of any such taxes. All matters with respect to the total amount of taxes
to be withheld in respect of any such compensation income shall be determined by
the Committee in its sole discretion.

6.3. Terms and Conditions Common to All Awards. All Awards granted under the
Plan shall include the following provisions:

6.3.1. All Awards, by their terms, shall not be transferable other than by last
will and testament or the laws of descent and distribution; provided, however,
Non-Qualified Options may also be transferable to members of the Participant’s
immediate family (or to one or more trusts for the benefit of such family
members or to partnerships or limited liability companies in which such family
members or trusts are the only partners or members), if (i) the Award Agreement
with respect to which such Non-Qualified Option relates expressly so provides,
and (ii) the Participant does not receive any consideration for the transfer.
Any Award held by any such transferees will continue to be subject to the same
terms and conditions that are applicable to such Award immediately prior to its
transfer.   During a Participant’s lifetime, ISOs shall be exercisable only by
the Participant and Non-Qualified Options may be exercised by the Participant or
the appropriate transferee.

 

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6.3.2. Each Award shall state the number of shares to which it pertains and the
requirements and vesting schedule thereof, if any.

6.3.3. On the date that a Participant’s employment with the Company or an
Subsidiary in his or her capacity as an employee ceases (and the Participant is
not otherwise providing services to the Company or any Subsidiary) for any
reason other than death, disability (as defined in section 22(e)(3) of the
Code), or termination for cause as described in Paragraph 6.3.5, all outstanding
Options held by such Participant shall thereon terminate, except that any
outstanding Options held by the Participant at such time may be exercised by the
Participant, to the extent otherwise then exercisable, for a period of three (3)
months from the date of termination of employment or until the expiration of the
stated term of such Option, whichever period is shorter.

6.3.4. If the Participant ceases to be employed by the Company or one of its
Subsidiaries by reason of death or disability (as defined in section 22(e)(3) of
the Code), the Participant or any person or persons who shall have acquired the
Option directly from the Participant by last will and testament or the
applicable laws of descent and distribution with respect to ISOs and by
transfers permitted in Paragraph 6.3.1 with respect to Non-Qualified Options
shall have the right (i) for twelve (12) months after the date of such
termination of employment by reason of death or disability or (ii) until the
expiration of the stated term of the Option, whichever period is shorter, to
exercise this Option with respect to all shares then available for purchase
under the Award Agreement.

6.3.5. In the event a Participant is terminated from employment with the Company
for “cause,” such Participant’s right to exercise any Award granted hereunder,
whether vested or non-vested, shall terminate upon notice of discharge. For
purposes of this Paragraph 6.3.6, “cause” shall mean final conviction of a
felony or conduct prejudicial to the interests of the Company.

6.3.6. Notwithstanding anything in the Plan to the contrary, the Committee may
grant Non-Qualified Options to Employees, as such term is defined in Section 2.9
hereof with respect to Non-Qualified Options, that do not include the provisions
of Paragraphs 6.3.3 through 6.3.5, or that include modified versions thereof,
provided the Award Agreement evidencing such Award reflects such deletions or
modifications.

6.3.7. The Committee shall determine the extent to which a leave of absence for
military or government service, illness, temporary disability, or other reasons
shall be treated as a termination or interruption of full-time employment for
purposes of determining questions of forfeiture and exercise of an Award after
termination of full-time employment.  With respect to an Incentive Option, such
period of unemployment that is longer than three months following termination
may be treated as employment if consistent with section 422 of the Code pursuant
to a federal statute, Regulations, or a published ruling of the Internal Revenue
Service that has general application.

6.4. Payment of Exercise Price. The payment of the exercise price of an Option
granted under this Plan shall be subject to the following:

6.4.1. Subject to the following provisions of this Section 6.4, the full
exercise price for shares of Common Stock purchased upon the exercise of any
Option shall be paid at the time of such exercise (except that, in the case of
an exercise arrangement approved by the Committee and described in Paragraph
6.4.3, payment may be made as soon as practicable after the exercise).

6.4.2. The exercise price shall be payable in cash or by tendering, by either
actual delivery of shares or by attestation, shares of Common Stock acceptable
to the Committee, and valued at Fair Market Value as of the day of exercise, or
in any combination thereof, as determined by the Committee.

6.4.3. The Committee may permit a Participant (subject to applicable insider
trading policies) to elect to pay the exercise price upon the exercise of an
Option by irrevocably authorizing a third party to sell shares of Common Stock
(or a sufficient portion of the shares) acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the entire
exercise price and the minimum tax withholding resulting from such exercise.

6.5. Modification of Options. Subject to the terms and conditions and within the
limitations of the Plan, the Committee, in its discretion, may modify
outstanding Awards granted under the Plan; provided, however, that no
modification of an Award shall alter or impair any rights or obligations under
any Option theretofore granted under the Plan or cause such Award to become
subject to the provisions of section 409A of the Code.

 

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6.6. Rights as a Shareholder.  Any Participant or transferee of an Option
granted hereunder shall have no rights as a shareholder of the Company with
respect to any shares of Common Stock to which such Award relates until the date
of the issuance of a stock certificate to him for such shares, or the
Participant or transferee is reflected as an owner of such shares in the
Company’s stock records. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as otherwise required by Section 7 hereof.

6.7. Fractional Shares. Only whole Shares of Common Stock may be acquired
through the exercise of an Option. Any amounts tendered in the exercise of an
Award remaining after the maximum number of whole Shares have been purchased
will be returned to the Participant.

6.8. Other Agreement Provisions. The agreements evidencing Awards authorized
under the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of such Awards, as the Committee
shall deem advisable. Any Award Agreement hereunder shall contain such
limitations and restrictions upon the exercise of ISOs as shall be necessary in
order that such ISOs will be “incentive stock options” as defined in section 422
of the Code, or to conform to any change in the law, which provisions shall
control any inconsistent or contradictory provision of the Plan.

SECTION 7. ADJUSTMENTS.

7.1. Adjustment to Shares.  The number and kind of shares of stock with respect
to which Awards hereunder may be granted (both overall and individual
limitations) and which are the subject of outstanding Awards, and the maximum
number and exercise price thereof, shall be adjusted as the Committee determines
to be appropriate, in the event that:

7.1.1. The Company effects one or more Stock dividends, Stock splits, reverse
Stock splits, subdivisions, consolidations or other similar events;

7.1.2. The Company engages in a transaction to which section 424 of the Code
applies; or

7.1.3. There occurs any other event that in the judgment of the Committee
necessitates such action;

provided, however, that if an event described in Paragraphs 7.1.1 and 7.1.2
occurs, the Committee shall make adjustments to the limit on Awards specified in
Article IV that are proportionate to the modifications of the Stock that are on
account of such corporate changes, and further provided, however, (i) that the
limitations of sections 422 and 424 of the Code shall apply with respect to
adjustments made to ISOs so as not to cause any ISO to cease to qualify as an
ISO under section 422 of the Code and (ii) that no adjustments may be made that
(A) would cause any Option to be subject to section 409A of the Code, or (B) if
it causes such Option to be subject to section 409A of the Code, would result in
any additional tax under such section.  All such adjustments by the Committee
shall be effective and binding for all purposes of this Plan.

7.2. Substitution of Awards on Merger or Acquisition. The Committee may grant
Awards in substitution for stock awards, stock options, stock appreciation
rights, restricted stock or similar awards held by an individual who becomes an
employee of the Company or a Subsidiary in connection with a transaction to
which section 424(a) of the Code applies. The terms of such substituted Awards
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Article IV.

7.3. Effect of Certain Transactions.

7.3.1. Except as set forth in Paragraph 7.3.2, in the event of: (a) a
dissolution, liquidation or sale of substantially all of the assets of the
Company or (b) a merger or other reorganization of the Company in which the
Company is not the surviving entity, survives only as a subsidiary of another
entity or is otherwise controlled by the surviving or successor entity whether
or not such event constitutes a Change in Control, any unexercised awards will
terminate, provided, the vesting date of each outstanding Option shall
accelerate and be exercisable within sixty (60) days prior to such occurrence in
whole or in part.

7.3.2. In the event of a Change in Control, outstanding Awards shall be subject
to the transaction agreement entered into with respect to such Change in
Control. Such transaction agreement may provide, without limitation,
continuation by the Company, revision, cancellation, conversion or other
treatment of such Awards, in all cases without consent of the Participant.
Provided, however, in the event that such agreement provides for the
cancellation of the Awards, each holder shall be entitled to the same
consideration or the equivalent value in cash, as provided in such agreement, as
the consideration received by the holder of Common Stock (on a per share basis
and net of any applicable exercise price) pursuant to such transaction agreement
with respect to all Awards which are vested on the date of the transaction.  For
the

 

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avoidance of doubt, any Award with an exercise price that equals or exceeds the
value of the consideration to be paid to the holders of Common Stock (on a per
share basis) may be cancelled without consideration. Any determination to be
made hereunder with respect implementing the treatment as provided in the
transaction agreement shall be made by the Committee and its determination shall
be final, binding and conclusive.

7.3.3. Notwithstanding the foregoing, a portion of the acceleration of vesting
described in Paragraph 7.3.1 shall not occur with respect to an Award to the
extent such acceleration of vesting would cause the Participant or holder of
such Award to realize less income, net of taxes, after deducting the amount of
excise taxes that would be imposed pursuant to section 4999 of the Code, than if
accelerated vesting of that portion of the Award did not occur.  If any portion
of any Award remains unvested due to this Paragraph 7.3.3 due to a transaction
in which the Company is not the surviving entity after the transaction, or the
survives only as a subsidiary or is otherwise controlled by the surviving or
successor entity, such portion of the Award shall be assumed by the surviving or
successor entity, or converted into award of an option for, or stock
appreciation rights, as applicable, of the common stock of the surviving entity,
subject to the terms and conditions that are equivalent to the terms and
conditions of the converted Award in all material respects.

7.4. Limited Rights Upon Company’s Restructure. Except as herein before
expressly provided in this Section 7, a holder of an Award shall have no rights
by reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation, or spin-off of assets or stock of another
corporation, and any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Award granted hereunder.

7.5. Effect of Options on Company’s Capital and Business Structure. The grant of
an Award pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.

SECTION 8. GENERAL PROVISIONS.

8.1. Effect of the Plan on Employment Relationship. Neither the Plan nor any
Award granted hereunder to an Employee shall be construed as conferring upon
such Participant any right to continue in the employ of the Company or the
service of the Company or any Subsidiary, as the case may be, or limit in any
respect the right of the Company or any Subsidiary to terminate such
Participant’s employment or other relationship with the Company or any
Subsidiary, as the case may be, at any time.

8.2. Amendment of the Plan. The Board of Directors may, as permitted by law,
amend the Plan from time to time as it deems desirable; provided, however, that,
without the approval of the holders of a majority of the outstanding Common
Stock of the Company entitled to vote thereon at a shareholders’ meeting, the
Board of Directors may not amend the Plan to (i) increase (except for increases
due to adjustments in accordance with Section 7 hereof) the aggregate number of
shares of Common Stock which may be issued under the Plan, (ii) increase the
benefits accruing to a Participant under this Plan, including any decrease in
the minimum exercise price specified by the Plan, (iii) change the class of
Employees eligible to receive Options under the Plan, or (iv) make any other
revision to the Plan as it relates to ISOs that requires shareholder approval
under the Code. Notwithstanding any other provision of the Plan, shareholder
approval of amendments to the Plan need not be obtained if such approval is not
required under Rule 16b-3 (to the extent applicable to the Company) as of the
effective date of such amendments, and with respect to ISOs, if such approval is
not required under section 422 of the Code.

8.3. Investment Purpose. Each Award under the Plan shall be granted on the
condition that the purchases of stock thereunder shall be for investment
purposes, and not with a view to resale or distribution, except that in the
event the stock subject to such Award is registered under the Securities Act of
1933, as amended, or in the event a resale of such stock without such
registration would otherwise be permissible under applicable laws, rules and
regulations. Such condition shall be inoperative if, in the opinion of counsel
for the Company, such condition is not required under the Securities Act of 1933
or any other applicable law, regulation, or rule of any governmental agency.

8.4. Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company 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 Award granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) 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 such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the performance of
his duties; provided, that within sixty (60) days

 

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after institution of any such action, suit or proceeding, a Committee member
shall in writing offer the Company the opportunity, at its expense, to handle
and defend the same.

8.5. Termination of the Plan. The Board of Directors may terminate the Plan at
any time. No Option may be granted hereunder after termination of the Plan. The
termination or amendment of the Plan shall not alter or impair any rights or
obligations under any Award theretofore granted under the Plan.

8.6. Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to Options granted hereunder shall be used for general
corporate purposes.

8.7. No Obligation to Exercise Option. The granting of an Option hereunder shall
impose no obligation upon the Participant to exercise such Option.

8.8. Effective Date of the Plan. The Plan shall be effective as of the date it
is approved by the Board of Directors; provided, however, that to the extent
that Options are granted under the Plan prior to its approval by the Company’s
shareholders, such Options shall be contingent on approval of the Plan by the
Company’s shareholders within twelve (12) months before or after the date the
Plan is approved by the Board and consistent with the requirements for
shareholder approval of matters requiring shareholder approval under the
Company’s organizational documents and under applicable corporate law. The Plan
shall be unlimited in duration and, in the event of Plan termination, shall
remain in effect as long as any Options under it are outstanding; provided,
however, that no Options may be granted under the Plan after the ten-year
anniversary of the date the Plan is approved by the Board of Directors.

8.9. Interpretation. Any words herein used in the masculine shall read and be
construed in the feminine where they would so apply. Words in the singular shall
be read and construed as though in the plural in all cases where they would so
apply.

8.10. Compliance with Section 409A of the Code. Awards will be designed and
operated in such a manner that they are either exempt from the application of,
or comply with, the requirements of section 409A of the Code such that the
grant, payment, settlement or deferral will not be subject to the additional tax
or interest applicable under section 409A of the Code, except as otherwise
determined in the sole discretion of the Committee. The Plan and each Award
Agreement under the Plan is intended to meet the requirements of section 409A of
the Code and will be construed and interpreted in accordance with such intent,
except as otherwise determined in the sole discretion of the Committee. To the
extent that an Award or payment, or the settlement or deferral thereof, is
subject to section 409A of the Code the Award will be granted, paid, settled or
deferred in a manner that will meet the requirements of section 409A of the
Code, such that the grant, payment, settlement or deferral will not be subject
to the additional tax or interest applicable under section 409A of the Code.  
Notwithstanding the foregoing, the Company makes no representations with respect
to the application of section 409A of the Code to any tax, economic, or legal
consequences of any Awards or payment, or the settlement or deferral thereof to
a Participant and, by the acceptance of any Award, each Participant understands
and agrees to accept the potential application of section 409A of the Code to
the tax and legal consequences of such Award.

8.11. Compliance with Section 16 of the Exchange Act. The transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the Exchange Act. To the extent any provision of this Plan
or action by Committee fails to so comply, it shall be deemed null and void to
the extent permitted by law and deemed advisable by the Committee.

8.12. Headings. Any heading or subheadings in this Plan are inserted for
convenience of reference only and are to be ignored in the construction of any
provisions hereof.

8.13. Waiver of Jury Trial. EACH PARTICIPANT HEREUNDER HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS HE OR SHE MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS PLAN OR ANY AGREEMENT
HEREUNDER OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.   THIS
WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY
SOURCE INCLUDING, BUT NOT LIMITED TO, THE CONSTITUTION OF THE UNITED STATES OR
ANY STATE THEREIN, COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATIONS. BY
AGREEING TO RECEIVE AN AWARD, EACH PARTICIPANT HERETO ACKNOWLEDGES THAT HE OR
SHE IS KNOWINGLY AND VOLUNTARILY WAIVING HIS OR HER RIGHT TO DEMAND TRIAL BY
JURY.

8.14. Governing Law. This Plan shall be construed in accordance with the laws of
the State of Florida.

16436631.4