As filed with the Securities and Exchange Commission on May 20, 2010
Registration No. 333- _______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
EXPRESS-1 EXPEDITED SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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03-0450326
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3399 South Lakeshore Drive, Suite 225
Saint Joseph, Michigan 49085
(Address of principal executive offices, including zip code)
Express-1 Expedited Solutions, Inc.
AMENDED AND RESTATED 2001 STOCK OPTION PLAN
(Full title of the Plan)
Michael R. Welch
Chief Executive Officer
Express-1 Expedited Solutions, Inc.
3399 South Lakeshore Drive, Suite 225,
Saint Joseph, Michigan 49085
Phone: (269) 429-9761
(Name, address and telephone number, including area code, of agent for service)
Copy to:
Clint J. Gage, Esq.
Roetzel & Andress
350 East Las Olas Boulevard, Ste. 1150
Fort Lauderdale, Florida 33301
Phone: (954) 462-4150
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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CALCULATION OF REGISTRATION FEE
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Proposed
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Proposed
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Amount to
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Maximum
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Maximum
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Amount of
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Title of Securities
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be
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Offering Price
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Aggregate Offering
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Registration
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to be Registered
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Registered (1)
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Per Share (2)
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Price (2)
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Fee
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Common Stock,
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5,600,000
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$
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1.51
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$
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8,456,000
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$
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602.91
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$0.001 par value
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shares
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Total
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$
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602.91
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(1)
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The Registration Statement also registers such indeterminate
number of additional shares as may be issued or issuable as a
result of stock splits, stock dividends or similar transactions
covered by Rule 416 under the Securities Act of 1933, as amended.
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(2)
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Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) and (h), based on the average of the
high and low sale prices of the common stock, $0.001 par value,
of the Registrant as reported by NYSE Amex on May 18, 2010.
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INTRODUCTION
This Registration Statement on Form S-8 is filed by Express-1 Expedited Solutions, Inc. (the
“Company” or the “Registrant”) and relates to 5,600,000 shares of the Company’s Common Stock, par
value $0.001 per share, issuable pursuant to the Company’s Amended and Restated 2001 Stock Option
Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Information required by Part I of Form S-8 to be contained in the Section 10(a) prospectus is
omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of
1933, and the Note to Part I of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Information required by Part I of Form S-8 to be contained in the Section 10(a) prospectus is
omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of
1933, and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents that the Company has filed with the Securities and Exchange Commission
(the “Commission”) are incorporated in this registration statement by reference and made a part
hereof:
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1.
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Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, filed on March 26, 2010 (File No.
001-32172);
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2.
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Quarterly Report on Form 10-Q, filed on May 12, 2010;
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3.
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Current Reports on Form 8-K, filed on April 5, 2010, and April 20, 2010;
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4.
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Definitive Proxy Statement on Schedule 14A, filed on April 20, 2010; and
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5.
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The description of the Company’s Common Stock contained in the
company’s Registration Statement on Form 10-SB, filed on January
30, 2002 (File No. 000-49606), including any amendments or reports
filed for the purpose of updating such description.
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All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 subsequent to the effective date of this registration statement,
but prior to the filing of a post-effective amendment to this registration statement indicating
that all securities offered hereby have been sold or deregistering all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
Any statement contained herein or in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of this registration statement,
except as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article VIII of the Company’s Amended and Restated Certificate of Incorporation, as amended,
provides as follows:
The Company shall indemnify any person who was, is or is threatened to be made a party to a
proceeding (as hereinafter defined) by reason of the fact that he or she (i) is or was a
director or officer of the Company or (ii) while a director or officer of the Company, is
or was serving at the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan,
or other enterprise, to the fullest extent permitted under the Delaware General Corporation
Law (the “DGCL”), as the same exists or may hereafter be amended. Such right shall be a
contract right and as such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the Company or elects to
continue to serve as a director or officer of the Company while this Article VIII is in
effect. Any repeal or amendment of this Article VIII shall be prospective only and shall
not limit the rights of any such director or officer of the obligations of the Company with
respect to any claim arising from or related to the services of such director or officer in
any of the foregoing capacities prior to any such repeal or amendment to this Article VIII.
Such right shall include the right to be paid by the Company expenses incurred in defending
any such proceeding in advance of its final disposition to the maximum extent permitted
under the DGCL, as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the Company
within sixty (60) days after a written claim has been received by the Company, the claimant
may at any time thereafter bring suit against the Company to recover the unpaid amount of
the claim, and if successful in whole or in part, the claimant shall also be entitled to be
paid the expenses of prosecuting such claim. It shall be a defense to any such action that
such indemnification or advancement of costs of defense are not permitted under the DGCL,
but the burden of proving such defense shall be on the Company. Neither the failure of the
Company (including its board of directors or any committee thereof, independent legal
counsel, or stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the claimant is
permissible in the circumstances nor as actual determination by the Company (including its
board of directors or any committee thereof, independent legal counsel, or stockholders)
that such indemnification or advancement is not permissible shall be a defense to the
action or create a presumption that such indemnification or advancement is not permissible.
In the event of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs, executors,
administrators and personal representatives. The rights conferred above shall not be
exclusive of any other right which any person may have or hereafter acquire under any
statute, bylaw, resolution of stockholders or directors, agreement, or otherwise.
Without limiting the generality of the foregoing, to the extent permitted by then
applicable law, the grant of mandatory indemnification pursuant to this Article VIII shall
extend to proceedings involving the negligence of such person.
The Company may additionally indemnify any employee or agent of the Company to the fullest
extent permitted by law.
As used herein, the term “proceeding” means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative,
any appeal in such action, suit or proceeding, and any inquiry or investigation that could
lead to such action, suit or proceeding.
Article IX of the Company’s Amended and Restated Certificate of Incorporation, as amended,
provides as follows:
A director of the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director’s duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction
from which the director derived an improper benefit. Any repeal or amendment of this
Article IX by the stockholders of the Company shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the Company
arising from an act or omission occurring prior to the time of such repeal or amendment. In
addition to the circumstances in which a director of the Company is not personally liable
as set forth in the foregoing provisions of this Article IX, a director shall not be liable
to the Company or its stockholders to such further extent as permitted by any law hereafter
enacted, including, without limitation, any subsequent amendment to the DGCL.
Article VII, Section 8 of the Company’s 2
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Amended and Restated Bylaws provides that
the Company will indemnify its directors and officers to the fullest extent permitted by the DGCL
and may, if and to the extent authorized by the Board of Directors, so indemnify such other persons
whom it has the power to indemnify against any liability, reasonable expense or other matter
whatsoever.
Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is
set forth below.
“Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that the person is or
was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of
nolo contendere
or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to believe that the
person’s conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by reason of
the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise against expenses
(including attorneys’ fees) actually and reasonably incurred by the person in connection
with the defense or settlement of such action or suit if the person acted in good faith and
in a manner the person reasonably believed to be in or not opposed to the best interests of
the corporation and except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsections (a) and (b) of this section, or in defense of any
claim, issue or matter therein, such person shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred by such person in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the present or former director,
officer, employee or agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or officer at the
time of such determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a committee of
such directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys’ fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of such director
or officer to repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the corporation as authorized in this section. Such
expenses (including attorneys’ fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person’s official capacity and as to action in another
capacity while holding such office. A right to indemnification or to advancement of
expenses arising under a provision of the certificate of incorporation or a bylaw shall not
be eliminated or impaired by an amendment to such provision after the occurrence of the act
or omission that is the subject of the civil, criminal, administrative or investigative
action, suit or proceeding for which indemnification or advancement of expenses is sought,
unless the provision in effect at the time of such act or omission explicitly authorizes
such elimination or impairment after such action or omission has occurred.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted
against such person and incurred by such person in any such capacity, or arising out
of such person’s status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to “the corporation” shall
include, in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, shall stand in
the same position under this section with respect to the resulting or surviving corporation
as such person would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise taxes
assessed on a person with respect to any employee benefit plan; and references to “serving
at the request of the corporation” shall include any service as a director, officer,
employee or agent of the corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner such
person reasonably believed to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best
interests of the corporation” as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification brought under
this section or under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Court of Chancery may summarily determine a corporation’s
obligation to advance expenses (including attorneys’ fees).”
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our
directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
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Exhibit No.
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Description
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4.1
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Amended and Restated 2001 Stock Option Plan
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5.1
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Opinion of Roetzel & Andress
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23.1
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Consent of Roetzel & Andress (included in Exhibit 5)
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23.2
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Consent of Pender Newkirk & Company LLP
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Item 9. Undertakings.
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(a)
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers and sales are being
made, a post-effective amendment to this registration statement:
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i.
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To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
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ii.
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To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective
registration statement;
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iii.
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To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
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provided however
that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
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(2)
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That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3)
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To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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(b)
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The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as
amended, each filing of the registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee
benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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(c)
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Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Saint Joseph, State of Michigan, on this May 20, 2010.
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Express-1 Expedited Solutions, Inc.
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By:
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/s/ Michael R. Welch
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Michael R. Welch
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Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date indicated.
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Signature
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Title
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Date
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/s/ Michael R. Welch
Michael R. Welch
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Chief Executive Officer, President and
Director
(Principal Executive Officer)
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May 20, 2010
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/s/ John Welch
John Welch
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Interim Chief Financial Officer
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May 20, 2010
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/s/ Jim Martell
Jim Martell
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Chairman of the Board of Directors
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May 20, 2010
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/s/ Jennifer Dorris
Jennifer Dorris
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Director
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May 20, 2010
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/s/ Jay Taylor
Jay Taylor
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Director
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May 20, 2010
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/s/ John Affleck-Graves
John Affleck-Graves
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Director
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May 20, 2010
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/s/ Calvin Whitehead
Calvin Whitehead
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Director
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May 20, 2010
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Director
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May 20, 2010
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EXHIBITS
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4.1
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Amended & Restated 2001 Stock Option Plan
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5.1
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Opinion of Roetzel & Andress
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23.2
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Consent of Pender Newkirk & Company LLP
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Exhibit 4.1
EXPRESS-1 EXPEDITED SOLUTIONS, INC.
AMENDED AND RESTATED
2001 STOCK OPTION PLAN
ARTICLE 1.
Establishment, Objectives, and Duration
1.1
Establishment of the Plan
. Express-1 Expedited Solutions, Inc., a Delaware
corporation (hereinafter referred to as the “Company”), hereby establishes an incentive
compensation plan to be known as 2001 Stock Option Plan (hereinafter referred to as the “Plan”), as
set forth in this document. Subject to the provisions of Article 12 hereof, the Plan shall become
effective as of October 29, 2001 (the “Effective Date”) and shall remain in effect as provided in
Section 1.3 hereof.
1.2
Purpose of the Plan
. The purpose of this Plan is to benefit the Company and its
subsidiaries by enabling the Company to offer to certain present and future Employees, Directors,
and consultants (including sales associates) stock based incentives in the Company, thereby giving
them a stake in the growth and prosperity of the Company and encouraging the continuance of their
services with the Company or subsidiaries.
1.3
Duration of the Plan
. The Plan shall commence on the Effective Date and shall
remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at
any time pursuant to Article 9 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan’s provisions.
ARTICLE 2.
Definitions
Whenever used in the Plan, the following terms shall have the meanings set forth below, and
when the meaning is intended, the initial letter of the word shall be capitalized:
“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
“Board” or “Board of Directors” means the Board of Directors of the Company.
“Change of Control” of the Company shall mean:
(a) The Company is merged or consolidated or reorganized into or with another corporation or
other legal person (an “Acquiror”) and as a result of such merger, consolidation or reorganization
less than 75% of the outstanding voting securities or other capital interests of the surviving,
resulting or acquiring corporation or other legal person are owned in the aggregate by the
stockholders of the Company, directly or indirectly, immediately prior to such merger,
consolidation or reorganization, other than by the Acquiror or any corporation or other legal
person controlling, controlled by or under common control with the Acquiror;
(b) The Company sells all or substantially all of its business and/or assets to an Acquiror,
of which less than 75% of the outstanding voting securities or other capital interests are owned in
the aggregate by the stockholders of the Company, directly or indirectly, immediately prior to such
sale, other than by any corporation or other legal person controlling, controlled by or under
common control with the Acquiror; or
(c) During any period of two consecutive years, individuals who at the beginning of any such
period constitute the directors of the Company cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by the Company’s stockholders,
of each new director of the Company was approved by a vote of at least two-thirds of such directors
of the Company then still in office who were directors of the Company at the beginning of any such
period.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor
legislation thereto.
“Committee” means the Committee as specified in Article 3 herein appointed by the Board to
administer the Plan with respect to grants of Options.
“Common Stock” means the common stock, par value $.001 of the Company.
“Company” means Express-1 Expedited Solutions, Inc., a Delaware corporation, as well as any
successor to such entity as provided in Article 11 herein.
“Director” means any individual who is a member of the Board of Directors of the Company.
“Disability” shall have the meaning ascribed to such term in the Participant’s governing
long-term disability plan. If no long term disability plan is in place with respect to a
Participant, then with respect to that Participant, Disability shall mean: for the first 24 months
of disability, that the Participant is unable to perform his or her job; thereafter, that the
Participant is unable to perform any and every duty of any gainful occupation for which the
Participant is reasonably suited by training, education or experience.
“Effective Date” shall have the meaning ascribed to such term in Section 1.1 hereof.
“Employee” means any employee of the Company or any Subsidiary.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any
successor act thereto.
“Fair Market Value” shall (i) for purposes of setting any Option Price, unless otherwise
required by any applicable provision of the Code or any regulations issued thereunder, or unless
the Committee otherwise determines, mean as of the date of grant of the Option, a). the average of
the high and low sales prices of the Common Stock on the applicable stock exchange (as reported in
The Wall Street Journal) on the trading date immediately preceding such date of grant or the “book
value” of such Shares (if the Company is not traded on any stock exchange, as
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determined by the Company’s regularly employed accountants whose determination shall be
binding or at the discretion of the Board of directors, by an independent appraiser selected by the
Board, in either case giving due consideration to recent transactions involving such stock, if any,
the Company’s net worth and book value, as determined in accordance with generally accepted
accounting procedures; and (ii) for purposes of the valuation of any Shares delivered in payment of
the Option Price upon the exercise of an Option, for purposes of the valuation of any Shares
withheld to pay taxes due in connection with the exercise of an Option, mean the average of the
high and low sales prices of the Common Stock on the American Stock Exchange (as reported in The
Wall Street Journal) on the date of exercise (or if the date of exercise is not a trading day, on
the trading day next preceding the date of exercise).
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“Incentive Stock Option” or “ISO” means an option to purchase Shares granted under Article 6
herein and which is designated as an Incentive Stock Option and which is intended to meet the
requirements of Code Section 422.
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“Insider” shall mean an individual who is, on the relevant date, an officer, director or more
than ten percent (10%) beneficial owner of any class of the Company’s equity securities that is
registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act and the regulations promulgated thereunder.
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“Named Executive Officer” means a Participant who is one of the group of covered employees as
defined in the regulations promulgated under Code Section 162(m), or any successor statute.
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“Nonqualified Stock Option” or “NQSO” means an option to purchase Shares granted under Article
6 herein and which is not intended to meet the requirements of Code Section 422.
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“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in
Article 6 herein.
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“Option Agreement” means writing provided by the Company to each Participant setting forth the
terms and provisions applicable to Options granted under this Plan. The Participant’s acceptance of
the terms of the Option Agreement shall be evidenced by the continued rendering by the Participant
of services on behalf of the Company or its subsidiaries without written objection before any
exercise of the Option. If the Participant objects in writing, the grant of the Option shall be
revoked.
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“Option Price” means the price at which a Share may be purchased by a Participant pursuant to
an Option.
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“Participant” means an Employee, a Director or a consultant (including a sales associate) who
has outstanding an Option granted under the Plan.
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“Performance-Based Exception” means the exception for performance-based compensation from the
tax deductibility limitations of Code Section 162(m).
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“Retirement” means the Participant’s termination of employment with the Company or its
Subsidiaries on or after the date on which the Participant becomes eligible to receive normal or
early retirement benefits under the Company’s 401(k) Retirement Plan, or such successor plan as may
be implemented in the future. If the Participant is not a participant in the 401(k) Retirement
Plan, then retirement may occur on or after the date the Participant has achieved the minimum age
or combination of age and service with the Company and its Subsidiaries that would be required to
receive an immediate annuity from the 401(k) Retirement Plan if he or she were a participant.
Notwithstanding the foregoing, the Committee may, in its sole discretion, determine that a
Participant has met the criteria for a Retirement termination from the Company.
“Shares” means shares of Common Stock of the Company.
“Subsidiary” means any corporation, partnership, joint venture, affiliate, or other entity in
which the Company is the direct or indirect beneficial owner of not less than 20% of all issued and
outstanding equity interests.
ARTICLE 3.
Administration
3.1
The Committee
. The Plan shall be administered by the Stock Option Committee of the
Board, or by any other Committee appointed by the Board. If and to the extent that no Committee
exists that has the authority to administer the Plan, the functions of the Committee shall be
exercised by the full Board. Notwithstanding the foregoing, no option shall be granted to any
member of the Committee unless such grant is approved by the unanimous vote of the Board (which may
be by written consent), and with respect to any such Options to be granted to a member of the
Committee, any reference to the Committee in this Plan shall instead refer to the full Board.
3.2
Authority of the Committee
. Except as limited by law or by the Certificate of
Incorporation or Bylaws of the Company, and subject to the provisions herein, the Committee shall
have full power to select Employees, Directors and consultants (including sales associates) who
shall participate in the Plan; determine the sizes and types of Options; determine the terms and
conditions of Options in a manner consistent with the Plan; construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan’s administration; and (subject to the provisions of Article 9 herein)
amend the terms and conditions of any outstanding Option to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan. Further, the Committee shall
make all other determinations which may be necessary or advisable for the administration of the
Plan. As permitted by law, the Committee may delegate the authority granted to it herein.
3.3
Decisions Binding
. All determinations and decisions made by the Committee pursuant
to the provisions of the Plan and all related orders and resolutions of the Board shall be final,
conclusive and binding on all persons, including the Company, its stockholders, Employees,
consultants (including sales associates) Participants, and their estates and beneficiaries.
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ARTICLE 4.
Shares Subject to the Plan and Maximum Number of Shares Subject to Options
4.1
Shares Available for Options
. The aggregate number of Shares which may be issued
or used for reference purposes under this Plan or with respect to which Options may be granted
shall not exceed 5,600,000 Shares (subject to adjustment as provided in Section 4.3), which may be
either authorized and unissued Shares or Shares held in or acquired for the treasury of the
Company. Upon:
(a) a cancellation, termination, expiration, forfeiture, or lapse for any reason of any
Option; or
(b) payment of an Option Price and/or payment of any taxes arising upon exercise of an Option
with previously acquired Shares or by withholding Shares which otherwise would be acquired on
exercise, then the number of Shares underlying any such Option which were not issued as a result of
any of the foregoing actions shall again be available for the purposes of Options thereafter
granted under the Plan.
4.2
Individual Participant Limitations
. Unless and until the Committee determines that
an Option to a Named Executive Officer shall not be designed to comply with the Performance-Based
Exception, and subject to adjustment as provided in Section 4.3 herein, the maximum aggregate
number of Options that may be granted in any one fiscal year to a Participant shall be 100,000 or
15% of the remaining options available for issue at the time of issuance, whichever is greater.
4.3
Adjustments in Authorized Shares
. In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any merger,
consolidation, separation, including a spin-off, or other distribution of stock or property of the
Company, any reorganization (whether or not such reorganization comes within the definition of such
term in Code Section 368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares available for Options, the number and class of
and/or price of Shares subject to outstanding Options granted under the Plan and the number of
Shares set forth in Sections 4.1 and 4.2, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number subject to any Option shall always be a whole number.
ARTICLE 5.
Eligibility and Participation
5.1
Eligibility
. Persons eligible to participate in this Plan include all officers and
other employees of the Company and its Subsidiaries, Directors and consultants (including Advisory
Board Members and sales associates) of the Company and its Subsidiaries, as determined by the
Committee.
5.2
Actual Participation
. Subject to the provisions of the Plan, the Committee may,
from time to time, select from all eligible Employees, Directors and consultants (including sales
associates), those to whom Options shall be granted and shall determine the terms, conditions and
amount of each Option.
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ARTICLE 6.
Granting of Stock Options
6.1
Grant of Options
. Subject to the terms and provisions of the Plan, Options may be
granted to one or more Participants in such number, and upon such terms, and at any time and from
time to time as shall be determined by the Committee. The Committee may grant Nonqualified Stock
Options or Incentive Stock Options. The Committee shall have complete discretion in determining the
number of Options granted to each Participant (subject to Article 4 herein).
6.2
Option Agreement
. Each Option grant shall be evidenced by an Option Agreement that
shall specify the Option Price, the duration of the Option, the number of Shares to which the
Option pertains, and such other provisions as the Committee shall determine. The Option Agreement
with respect to the Option also shall specify whether the Option is intended to be an ISO within
the meaning of Code Section 422, or an NQSO whose grant is intended not to fall under the
provisions of Code Section 422.
6.3
Option Price
. The Committee shall designate the Option Price for each grant of an
Option under this Plan which Option Price shall be at least equal to one hundred percent (100%) of
the Fair Market Value of a Share on the date the Option is granted, and which Option Price may not
be subsequently changed by the Committee except pursuant to Section 4.3 hereof or to the extent
provided in the Option Agreement.
6.4
Duration of Options
. Each Option granted to a Participant shall expire at such
time as the Committee shall determine at the time of grant; provided, however, that unless
otherwise designated by the Committee at the time of grant, no Option shall be exercisable later
than the tenth (10th) anniversary date of its grant.
6.5
Exercise of Options
. Options granted under this Article 6 shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or for each Participant.
6.6
Payment
. Options granted under this Article 6 shall be exercised by the delivery
of a written notice of exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares. The Option Price
upon exercise of any Option shall be payable to the Company in full either:
(a) in cash or its equivalent,
(b) by tendering previously acquired Shares having an aggregate Fair Market Value at the time
of exercise equal to the total Option Price, or
(c) by a combination of (a) and (b).
The Committee also may allow cashless exercises as permitted under Federal Reserve Board’s
Regulation T, subject to applicable securities law restrictions, or by any other means which the
Committee determines to be consistent with the Plan’s purpose and applicable law. As soon as
practicable after receipt of a written notification of exercise and full payment,
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the Company shall deliver to the Participant, in the Participant’s name, Share certificates in
an appropriate amount based upon the number of Shares purchased under the Option(s).
In connection with the exercise of options granted under the Plan, the Company may make loans
to the Participants as the Committee, in its discretion, may determine. Such loans shall be subject
to the following terms and conditions and such other terms and conditions as the Committee shall
determine not inconsistent with the Plan. Such loans shall bear interest at such rates as the
Committee shall determine from time to time, which rates may be below then current market rates or
may be made without interest. In no event may any such loan exceed the Fair Market Value, at the
date of exercise, of the shares covered by the Option, or portion thereof, exercised by the
Optionee. No loan shall have an initial term exceeding two years, but any such loan may be
renewable at the discretion of the Committee. When a loan shall have been made, Shares having a
fair market value at least equal to 150 percent of the principal amount of the loan shall be
pledged by the Participant to the Company as security for payment of the unpaid balance of the
loan.
6.7 Restrictions on Share Transferability/Restrictions Applicable Until the Company is Subject
to Federal Reporting Requirements. a) The Committee may impose such restrictions on any Shares
acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, restrictions under applicable federal securities laws,
under the requirements of any stock exchange or market upon which such Shares are then listed
and/or traded, and under any blue sky or state securities laws applicable to such Shares, and b)
Notwithstanding any other provisions of this Plan, unless and until the Company has become a
reporting company with respect to any class of its equity securities under the Securities Exchange
Act of 1934, as amended: (1) no option granted under this Plan may be exercised prior to the
calendar month in which that option is scheduled to expire by its terms (without regard to any
provisions for premature termination or cancellation); prior to that calendar month in which that
option is scheduled to expire by its terms, the Company has the right, exercisable in it
discretion, to cancel and purchase any such option for an amount in excess, if any of the Fair
Market Value of the stock subject to that option over its exercise price on the date the Company
exercises such right.
6.8
Termination of Employment, Director Relationship or Consulting Arrangement
. Each
Option Agreement shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant’s employment, service on the Board of
Directors, or consulting arrangement with the Company and/or its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee, shall be included in the Option
Agreement entered into with each Participant, need not be uniform among all Options issued pursuant
to the Plan, and may reflect distinctions based on the reasons for termination of employment,
director relationship or consulting agreement, including, but not limited to, termination of
employment for cause or good reason, or reasons relating to the breach or threatened breach of
restrictive covenants. Subject to Article 8, in the event that a Participant’s Option Agreement
does not set forth such termination provisions, the following termination provisions shall apply:
(a) In the event a Participant’s employment, director relationship or consulting arrangement
with the Company and/or its Subsidiaries is terminated for any reason other than
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death, Disability or Retirement, all Options held by the Participant shall expire and all
rights to purchase Shares thereunder shall terminate immediately; provided, however, that
notwithstanding the foregoing, all Options to which the Participant has a vested right immediately
prior to such termination shall be exercisable for the lesser of (i) 30 days following the date of
termination or (ii) the expiration date of the Option.
(b) In the event a Participant’s employment, director relationship or consulting arrangement
with the Company and/or its Subsidiaries is terminated due to death or Disability, all Options
shall immediately become fully vested on the date of termination.
(c) Subject to Article 8, in the event of termination of the Participant’s employment,
director relationship or consulting arrangement, due to death or Disability, all Options in which
the Participant has a vested right upon termination shall be exercisable for a period of one (1)
year following such termination, or until the expiration date of the Option, whichever is later.
(d) Subject to Article 8, in the event of termination of the Participant’s employment director
relationship or consulting arrangement due to Retirement, all Options in which the Participant has
a vested right upon termination shall be exercisable until the date which is (i) three years
following the date of termination or (ii) the expiration date of the Option, whichever is earlier.
6.9
Nontransferability of Options
.
(a)
Incentive Stock Options
. No ISO granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all ISOs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.
(b)
Nonqualified Stock Options
. Except as otherwise provided in a Participant’s Option
Agreement, no NQSO granted under this Article 6 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant’s Option Agreement, all NQSOs granted to a
Participant under this Article 6 shall be exercisable during his or her lifetime only by such
Participant.
ARTICLE 7.
Rights of Employees, Directors and Consultants
7.1
Employment or Consulting Arrangement
. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s employment or consulting
arrangement at any time, nor confer upon any Participant any right to continue in the employ of or
consulting arrangement with the Company or any Subsidiary, nor interfere with or limit in any way
the right of the Board to remove any Participant who is a Director from service on the Board at any
time in accordance with the provisions of the Company’s By-laws and applicable law.
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For purposes of this Plan, temporary absence from employment because of illness, vacation,
approved leaves of absence, and transfers of employment among the Company and its Subsidiaries,
shall not be considered to terminate employment or to interrupt continuous employment. Temporary
cessation of the provision of consulting services because of illness, vacation or any other reason
approved in advance by the Company shall not be considered a termination of the consulting
arrangement or an interruption of the continuity thereof. Conversion of a Participant’s employment
relationship to a consulting arrangement or from a consulting arrangement to an employment
relationship shall not result in termination of previously granted Options.
7.2
Participation
. No Employee, Director or consultant shall have the right to be
selected to receive an Option under this Plan, or, having been so selected, to be selected to
receive a future Option.
ARTICLE 8.
Change of Control
Upon the occurrence of a Change of Control, unless otherwise specifically prohibited under
applicable laws, or by the rules and regulations of any governing governmental agencies or national
securities exchanges, any and all Options granted hereunder shall become immediately exercisable,
and shall remain exercisable throughout their entire term.
ARTICLE 9.
Amendment, Modification, and Termination
9.1
Amendment, Modification, and Termination
. The Board may at any time and from time
to time, alter, amend, suspend or terminate the Plan in whole or in part, subject to any
requirement of stockholder approval imposed by applicable law, rule or regulation.
9.2
Options Previously Granted
. No termination, amendment, or modification of the Plan
shall adversely affect in any material way any Option previously granted under the Plan, without
the written consent of the Participant holding such Option.
ARTICLE 10.
Withholding
10.1
Tax Withholding
. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of the Plan.
10.2
Share Withholding
. With respect to withholding required upon the exercise of
Options, Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the minimum statutory total tax which
would be imposed on the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.
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ARTICLE 11.
Successors
All obligations of the Company under the Plan with respect to Options granted hereunder shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect merger, consolidation, purchase of all or substantially all of the business
and/or assets of the Company or otherwise.
ARTICLE 12.
Shareholder Ratification
This Plan was initially adopted by the Board of Directors and Shareholders on May 16, 2000,
and was amended and restated by the Board of Directors and Shareholders on June 17, 2005.
ARTICLE 13.
Legal Construction
13.1
Gender and Number
. Except where otherwise indicated by the context, any masculine
term used herein also shall include the feminine; the plural shall include the singular and the
singular shall include the plural.
13.2
Severability
. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.
13.3
Requirements of Law
. The granting of Options and the issuance of Shares under the
Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
13.4
Securities Law Compliance
. With respect to Insiders, 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 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.
13.5
Governing Law
. To the extent not preempted by federal law, the Plan, and all
agreements hereunder, shall be construed in accordance with and governed by the laws of the State
of Delaware.
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