INFORMATION STATEMENT
(Preliminary)
TEGO CYBER INC.
8565 South Eastern Avenue, Suite 150
Las Vegas, Nevada, 89123
(855) 939-0100
INFORMATION STATEMENT REGARDING ACTION TO BE TAKEN BY WRITTEN
CONSENT OF MAJORITY STOCKHOLDERS IN LIEU OF A SPECIAL
MEETING
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO
STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER
DESCRIBED HEREIN
December 10, 2021
GENERAL INFORMATION
This
Information Statement is first being
mailed on or about December__, 2021 to the holders (the
“Stockholders”) of the common stock, of record of the common stock, par value
$0.001 per share (the “Common Stock”), of Tego Cyber
Inc, a Nevada Corporation (the “Company”,
“we” or “our”), to notify such Stockholders
that on or about December 8, 2021, the Company received written
consents (“Written
Consent”) in lieu of a meeting of Stockholders
representing a majority of the issued and outstanding shares of the
voting securities of the Company (the “Majority
Stockholders”) approving the following:
(1)
The adoption of the
Tego Cyber Inc. 2021 Equity Compensation Plan (the
“Action”).
On
December 8, 2021, the Board of Directors of the Company (the
“Board”) approved the Action by unanimous written
consent in lieu of a meeting. Subsequently, on December 8, 2021,
the Company received a written consent in lieu of a meeting of
Stockholders from the Majority Stockholders approving the Action.
Accordingly, your consent is not required and is not being
solicited in connection with the approval of the Action. The Plan
became effective upon approval by the
Board.
The Written Consent was executed in accordance with the Nevada
Revised Statutes (“NRS”), which permit that any action
which may be taken at a meeting of the stockholders may also be
taken by the written consent of the holders of outstanding stock
having not less than the minimum number of votes necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. The accompanying
Information Statement is being furnished to all of our stockholders
in accordance with Section 14(c) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and the rules
promulgated by the U.S. Securities and Exchange Commission
(“SEC”) thereunder, solely for the purpose of informing
our stockholders of the actions to be taken by Written Consent. No
action is required by you to effectuate the actions contemplated by
the Actions.
You are
encouraged to read the enclosed Information Statement, which
provides, among other information, details about the
Company’s 2021 Equity Compensation Plan. Thank you for your
confidence and support.
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On
Behalf of the Board of Directors of Tego Cyber Inc.
By:
/s/
Shannon Wilkinson
Shannon
Wilkinson
Chief
Executive Officer
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RECOMMENDATION OF THE BOARD OF DIRECTORS
The
purpose of the Tego Cyber Inc. 2021 Equity Compensation Plan (the
“Plan”)
is to provide directors, officers, employees, consultants and
advisors who perform services for the Company, with the opportunity to receive grants
of incentive stock options, nonqualified stock options, stock
appreciation rights, stock awards, stock units and other
stock-based awards. The Company believes that the Plan will
encourage the participants to contribute materially to the growth
of the Company, thereby benefitting the Company’s
stockholders, and will align the economic interests of the
participants with those of the stockholders.
ACTIONS TO BE TAKEN
This
Information Statement contains a brief summary of the material
aspects of the Action approved by the Board and the Majority
Stockholders of the Company.
ACTION:
TEGO CYBER INC. 2021 OMNIBUS EQUITY COMPENSATION PLAN
The following summarizes the material terms of the Tego Cyber Inc.
2021 Equity Compensation Plan (“Plan”), a copy of which
is attached to this Information Statement.
Our board of directors has adopted, and our stockholders have
approved, the Plan on December 8, 2021. As such, the Plan is
effective as of December 8, 2021 and shall terminate on the day
immediately preceding the tenth anniversary of its Effective Date,
unless the Plan is terminated earlier by the Board or extended by
the Board with the approval of the Majority
Stockholders.
The
Plan provides for the issuance of up to 10,000,000 shares of the
Company’s Common Stock, $0.001 par value.
Purpose and Types of Awards
The nature and purpose of which is to create incentives
which are designed to attract and retain
employees, non-employee directors and
consultants, and advisors (hereafter, collectively,
“Participants” or individually a
“Participant”) and to motivate Participants to put
forth maximum effort toward the success and growth of the Company
and to enable the Company to attract and retain experienced
individuals who by their position, ability and diligence are able
to make important contributions to the Company’s success.
Toward these objectives, the Plan provides for the grant of
securities to eligible persons, subject to the terms and conditions
set forth in the Plan, and as more fully detailed in the Plan filed
herewith as Appendix A. The
Plan provides for the issuance of incentive stock
options, non-qualified stock options, stock awards,
stock units, stock appreciation rights, and other stock-based
awards. The Plan is intended to provide an incentive to
participants to contribute to our economic success by aligning the
economic interests of participants with those of our
stockholders.
Shares Subject to the Plan
Subject to adjustment, the Plan authorizes the issuance or transfer
of 10,000,000 shares of our common stock. Subject to adjustment as
described below, the maximum aggregate value of shares of our
common stock subject to awards made to
any non-employee director, together with any cash fees
earned by such non-employee director, for services
rendered as a non-employee director during any calendar
year will not exceed $1,000,000, which value will be calculated
based on the grant date fair value of such awards for financial
reporting purposes.
If any options or stock appreciation rights expire or are canceled,
forfeited, exchanged, or surrendered without having been exercised,
or if any stock awards, stock units or other stock-based awards are
forfeited, terminated, or otherwise not paid in full, the shares of
our common stock subject to such awards will again be available for
issuance or transfer under the Plan. Shares surrendered in payment
of the exercise price of an option and shares withheld or
surrendered for payment of taxes with respect to any award will not
be available for issuance or transfer under the Plan. The exercise
or settlement of any stock appreciation right will reduce the
number of shares of our common stock available for issuance or
transfer under the Plan by the total number of shares to which the
exercise or settlement of the stock appreciation relates, not just
the net amount of shares actually issued upon exercise or
settlement. If we repurchase shares on the open market with the
proceeds of the exercise price of options, such shares may not
again be made available for issuance or transfer under the Plan. In
addition, shares of our common stock issued under awards made
pursuant to assumption, substitution, or exchange of previously
granted awards of a company that we acquire will not reduce the
number of shares of our common stock available under the Plan.
Available shares under a stockholder approved plan of an acquired
company may be used for awards under the Plan and will not reduce
the share reserve, subject to compliance with the applicable stock
exchange and the Code.
Administration
The Plan will be administered by our compensation committee,
or another committee appointed by the Board to administer the Plan;
provided however, until a compensation committee or another
committee is appointed by the Board to serve as the Committee, the
Committee shall be the Board. The compensation
committee will determine all of the terms and conditions applicable
to awards under the Plan. Our compensation committee will also
determine who will receive awards under the Plan and the number of
shares of our common stock that will be subject to awards, except
that awards to members of our board of directors must be authorized
by a majority of our board of directors. Our compensation committee
may delegate authority under the Plan to one or more subcommittees
as it deems appropriate. Our compensation committee, our board of
directors, any subcommittee, as applicable, that has authority with
respect to a specific award will be referred to as “the
committee” in this description of the
Plan.
Adjustments
In connection with stock splits, stock dividends,
recapitalizations, and certain other events affecting the shares of
our common stock reserved for issuance as awards, the number and
kind of shares covered by outstanding awards, the number and kind
of shares that may be issued or transferred under the Plan, the
maximum total value of awards which
a non-employee director may receive in any calendar year,
the price per share or market value of any outstanding awards, the
exercise price of options, the base amount of stock appreciation
rights, performance goals and other conditions as the committee
deems appropriate to prevent the enlargement or dilution of rights
under the Plan.
Eligibility
All of our employees are eligible to receive awards under the Plan.
In addition, our non-employee directors and key
advisors who perform services for us may receive grants under the
Plan. Advisors shall be eligible to participate in the Plan if they
render bona fide services to the Employer, the services are not in
connection with the offer and sale of securities in a
capital-raising transaction and the Advisors do not directly or
indirectly promote or maintain a market for the Company’s
securities.
Vesting
The
committee determines the vesting and exercisability terms of awards
granted under the Plan.
Types of Awards
Options
Under
the Plan, the committee will determine the exercise price of the
options granted and may grant options to purchase shares of our
common stock in such amounts as it determines. The committee may
grant options that are intended to qualify as incentive stock
options under Section 422 of the Code,
or non-qualified stock options, which are not intended to
so qualify. Incentive stock options may only be granted to our
employees. Anyone eligible to participate in the Plan may receive a
grant of non-qualified stock options. The exercise price
of a stock option granted under the Plan cannot be less than the
fair market value of a share of our common stock on the date the
option is granted. If an incentive stock option is granted to a 10%
stockholder, the exercise price cannot be less than 110% of the
fair market value of a share of our common stock on the date the
option is granted. The aggregate number of shares of our common
stock that may be issued or transferred under the Plan pursuant to
incentive stock options under Section 422 of the Code may not
exceed 10% of the number of shares of our common stock outstanding
as of immediately prior to the closing of trading on the date of
the closing of the initial public offering of our common stock,
determined on a fully diluted basis.
The
exercise price for any option is generally payable in cash or by
check. In certain circumstances as permitted by the committee, the
exercise price may be paid by the surrender of shares of our common
stock with an aggregate fair market value on the date the option is
exercised equal to the exercise price; by payment through a broker
in accordance with procedures established by the Federal Reserve
Board; by withholding shares of our common stock subject to the
exercisable option which have a fair market value on the date of
exercise equal to the aggregate exercise price; or by such other
method as the committee approves.
The
term of an option cannot exceed ten years from the date of grant,
except that if an incentive stock option is granted to a 10%
stockholder, the term cannot exceed five years from the date of
grant. In the event that on the last day of the term of
a non-qualified stock option, the exercise is prohibited
by applicable law, including a prohibition on purchases or sales of
our common stock under our insider trading policy, the term of
the non-qualified option will be extended for a period of
30 days following the end of the legal prohibition, unless the
committee determines otherwise.
Except
as provided in the grant instrument, an option may only be
exercised while a participant is employed by or providing service
to us. The committee will determine in the grant instrument under
what circumstances and during what time periods a participant may
exercise an option after termination of
employment.
Stock Appreciation Rights
Under
the Plan, the committee may grant stock appreciation rights, which
may be granted separately or in tandem with any option. Stock
appreciation rights granted with a non-qualified stock
option may be granted either at the time
the non-qualified stock option is granted or any time
thereafter while the option remains outstanding. Stock appreciation
rights granted with an incentive stock option may be granted only
at the time the grant of the incentive stock option is made. The
committee will establish the base amount of the stock appreciation
right at the time the stock appreciation right is granted, which
will be equal to or greater than the fair market value of a share
of our common stock as of the date of grant.
If
stock appreciation rights are granted in tandem with an option, the
number of stock appreciation rights that are exercisable during a
specified period will not exceed the number of shares of our common
stock that the participant may purchase upon exercising the related
option during such period. Upon exercising the related option, the
related stock appreciation rights will terminate, and upon the
exercise of a stock appreciation right, the related option will
terminate to the extent of an equal number of shares of our common
stock. Generally, stock appreciation rights may only be exercised
while the participant is employed by, or providing services to, us.
When a participant exercises a stock appreciation right, the
participant will receive the excess of the fair market value of the
underlying common stock over the base amount of the stock
appreciation right. The appreciation of a stock appreciation right
will be paid in shares of our common stock, cash or both, as
determined by the committee.
The
term of a stock appreciation right cannot exceed ten years from the
date of grant. In the event that on the last day of the term of a
stock appreciation right, the exercise is prohibited by applicable
law, including a prohibition on purchases or sales of our common
stock under our insider trading policy, the term of the stock
appreciation right will be extended for a period of 30 days
following the end of the legal prohibition, unless the committee
determines otherwise.
Stock Awards
Under
the Plan, the committee may grant stock awards. A stock award is an
award of our common stock that may be subject to restrictions as
the committee determines. The restrictions, if any, may lapse over
a specified period of employment or based on the satisfaction
of pre-established criteria, in installments or
otherwise, as the committee may determine. Except to the extent
restricted under the grant instrument relating to the stock award,
a participant will have all of the rights of a stockholder as to
those shares, including the right to vote and the right to receive
dividends or distributions on the shares. Dividends with respect to
stock awards that vest based on performance shall vest if and to
the extent that the underlying stock award vests, as determined by
the committee. All unvested stock awards are forfeited if the
participant’s employment or service is terminated for any
reason, unless the committee determines
otherwise.
Stock Units
Under
the Plan, the committee may grant restricted stock units to anyone
eligible to participate in the Plan. Restricted stock units are
phantom units that represent shares of our common stock. Stock
units become payable on terms and conditions determined by the
committee and will be payable in cash or shares of our stock as
determined by the committee. All unvested restricted stock units
are forfeited if the participant’s employment or service is
terminated for any reason, unless the committee determines
otherwise.
Other Stock-Based Awards
Under
the Plan, the committee may grant other types of awards that are
based on or measured by shares of our common stock, payable to
anyone eligible to participate in the Plan. The committee will
determine the terms and conditions of such awards. Other
stock-based awards may be payable in cash, shares of our common
stock or a combination of the two, as determined by the
committee.
Dividend Equivalents
Under the Plan, the committee may grant dividend equivalents in
connection with grants of stock units or other stock-based awards
made under the Plan. Dividend equivalents entitle the participant
to receive amounts equal to ordinary dividends that are paid on the
shares underlying a grant while the grant is outstanding. The
committee will determine whether dividend equivalents will be paid
currently or accrued as contingent cash obligations. Dividend
equivalents may be paid in cash, in shares of our common stock, or
in a combination of the two. The committee will determine the terms
and conditions of the dividend equivalent grants, including whether
the grants are payable upon the achievement of specific performance
goals. Dividend equivalents with respect to stock units or other
stock-based awards that vest based on performance shall
vest and be
paid only if and to the extent that the underlying stock units or
other stock-based awards vest and are paid as determined by the
committee. No dividend equivalents will be granted in connection
with options or stock appreciation rights.
Change in Control
If we experience a change in control , as defined in the Plan,
where we are not the surviving corporation (or survive only as a
subsidiary of another corporation), unless the committee determines
otherwise, all outstanding grants that are not exercised or paid at
the time of the change in control will be assumed by, or replaced
with grants that have comparable terms by, the surviving
corporation (or a parent or subsidiary of the surviving
corporation).
If there is a change in control and all outstanding grants are not
assumed by, or replaced with grants that have comparable terms by,
the surviving corporation, the committee may make adjustments to
the terms and conditions of outstanding grants.
Withholding
All grants under the Plan are subject to applicable U.S. federal
(including FICA), state and local, foreign, or other tax
withholding requirements. We may require participants or other
persons receiving grants or exercising grants to pay an amount
sufficient to satisfy such tax withholding requirements with
respect to such grants, or we may deduct from other wages and
compensation paid by us the amount of any withholding taxes due
with respect to such grants.
The committee may permit or require that our tax withholding
obligation with respect to grants paid in our common stock be paid
by having shares withheld up to an amount that does not exceed the
participant’s minimum applicable withholding tax rate for
United States federal (including FICA), state and local tax or
foreign tax liabilities, or as otherwise determined by the
committee. In addition, the committee may, in its discretion, and
subject to such rules as the committee may adopt, allow
participants to elect to have such share withholding applied to all
or a portion of the tax withholding obligation arising in
connection with any particular grant.
Transferability
Except as permitted by the committee with respect
to non-qualified stock options, only a participant may
exercise rights under a grant during the participant’s
lifetime. Upon death, the personal representative or other person
entitled to succeed to the rights of the participant may exercise
such rights. A participant cannot transfer those rights except by
will or by the laws of descent and distribution or, with respect to
grants other than incentive stock options, pursuant to a domestic
relations order. The committee may provide in a grant instrument
that a participant may transfer non-qualified stock
options to family members, or one or more trusts or other entities
for the benefit of or owned by family members, consistent with
applicable securities laws.
The committee may condition any grant on the participant’s
undertaking in writing to comply with any restrictions on the
participant’s subsequent disposition of the shares of our
common stock, as determined by the committee, and certificates
representing such shares may be legended to reflect such
restrictions, if any. Such certificates may be subject to
stop-transfer orders and other restrictions as the committee deems
appropriate to comply with applicable laws.
Amendment; Termination
Our board of directors may amend or terminate the Plan at any time,
except that our stockholders must approve an amendment if such
approval is required in order to comply with the Code, applicable
laws, or applicable stock exchange requirements. Unless terminated
sooner by our board of directors or extended with stockholder
approval, the Plan will terminate on the day immediately preceding
the tenth anniversary of the effective date of the
Plan.
Establishment of Sub-Plans
Our
board of directors may, from time to time, establish one or
more sub-plans under the Plan to satisfy applicable blue
sky, securities, or tax laws of various jurisdictions. Our board of
directors may establish such sub-plans by adopting
supplements to the Plan setting forth limitations on the
committee’s discretion and such additional terms and
conditions not otherwise inconsistent with the Plan as our board of
directors will deem necessary or desirable. All such supplements
will be deemed part of the Plan, but each supplement will only
apply to participants within the affected
jurisdiction.
No Repricing
Except in connection with a corporate transaction (including, any
stock dividend, distribution (whether in the form of cash, stock,
other securities or other property), stock split, extraordinary
cash dividend, recapitalization, change in control, reorganization,
merger,
consolidation, split-up, spin-off, combination,
repurchase or exchange of stock or other securities, or similar
transactions), we may not, without obtaining stockholder approval,
(i) amend the terms of outstanding options or stock
appreciation rights to reduce the exercise price of such
outstanding options or base amount of such stock appreciation
rights, (ii) cancel outstanding options or stock appreciation
rights in exchange for options or stock appreciation rights with an
exercise price or base amount that is less than the exercise price
or base amount, as applicable, of the original options or stock
appreciation rights or (iii) cancel outstanding options or
stock appreciation rights with an exercise price or base amount, as
applicable, above the current stock price in exchange for cash or
other securities.
Clawback
Subject
to applicable law, the committee may provide in any grant
instrument that if a participant breaches any restrictive covenant
agreement between the participant and us, or otherwise engages in
activities that constitute cause (as defined in the Plan) either
while employed by, or providing services to, us or within a
specified period of time thereafter, all grants held by the
participant will terminate, and we may rescind any exercise of an
option or stock appreciation right and the vesting of any other
grant and delivery of shares upon such exercise or vesting, as
applicable, on such terms as the committee will determine,
including the right to require that in the event of any
rescission:
●
the
participant must return the shares received upon the exercise of
any option or stock appreciation right or the vesting and payment
of any other grants; or
●
if the
participant no longer owns the shares, the participant must pay to
us the amount of any gain realized or payment received as a result
of any sale or other disposition of the shares (if the participant
transferred the shares by gift or without consideration, then the
fair market value of the shares on the date of the breach of the
restrictive covenant agreement or activity constituting cause), net
of the price originally paid by the participant for the
shares.
Payment
by the participant will be made in such manner and on such terms
and conditions as may be required by the committee. We will be
entitled to set off against the amount of any such payment any
amounts that we otherwise owe to the participant. The committee may
also provide for clawback pursuant to a clawback or recoupment
policy, which our board of directors may adopt from time to
time.
Certain United States Federal Income Tax Aspects
The
federal income tax consequences applicable to us and grantees in
connection with awards under the Plan are complex and depend, in
large part, on the surrounding facts and circumstances. Under
current federal income tax laws, a participant will generally
recognize income, and we will be entitled to a deduction, with
respect to awards under the Plan as follows:
●
Incentive Stock Options : The grant of an incentive stock
option will not result in any immediate tax consequences to us or
the optionee. An optionee will not realize taxable income, and we
will not be entitled to any deduction, upon the timely exercise of
an incentive stock option, but the excess of the fair market value
of our common stock acquired over the exercise price will be an
item of tax preference for purposes of the alternative minimum tax.
If the optionee does not dispose of the common stock acquired
within one year after its receipt (or within two years after the
date the option was granted), the gain or loss realized on the
subsequent disposition of the common stock will be treated as
long-term capital gain or loss and we will not be entitled to any
deduction. If the optionee disposes of the common stock acquired
less than one year after its receipt (or within two years after the
option was granted), the optionee will realize ordinary income in
an amount equal to the lesser of (i) the excess of the fair market
value of the common stock acquired on the date of exercise over the
exercise price, or (ii) if the disposition is a taxable sale or
exchange, the amount of any gain realized.
Upon
such a disqualifying disposition, we will be entitled to a
deduction in the same amount and at the same time as the optionee
realizes such ordinary income. Any amount realized by the optionee
in excess of the fair market value of the common stock on the date
of exercise will be taxed to the optionee as capital
gain.
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●
Nonqualified Stock Options and Stock Appreciation Rights :
The grant of a nonqualified stock option or stock appreciation
rights will not result in any immediate tax consequences to us or
the grantee. Upon the exercise of a nonqualified stock option or
stock appreciation rights, the grantee will generally realize
ordinary income equal to the excess of the fair market value of the
common stock acquired over the exercise price or base amount, as
the case may be. We will be entitled to a deduction at the same
time as, and in an amount equal to, the income realized by the
grantee.
●
Stock Awards : A grantee generally will not realize taxable
income upon an award of stock awards. However, a grantee who
receives shares of restricted stock awards will realize as ordinary
income at the time of the lapse of the restrictions an amount equal
to the fair market value of the common stock at the time of such
lapse. Alternatively, and if permitted by the committee, a grantee
may elect to realize ordinary income on the date of receipt of the
stock awards. We will be entitled to a deduction at the same time
as, and in an amount equal to, the income realized by the
grantee.
●
Stock Units : A grantee generally will not realize taxable
income upon an award of stock units. A grantee will recognize
ordinary income in the year in which the shares or cash equivalent
subject to the awards are actually issued (or the amount of cash
paid) to the grantee, in an amount equal to the fair market value
of the shares on the issuance date and/or the amount of any cash
payable on the payment date
●
Other Stock-Based Awards : A grantee who receives other
stock-based awards will realize as ordinary income at the time of
the lapse of the restrictions (or, in the case of phantom stock
awards, at the time of delivery) an amount equal to the fair market
value of the common stock delivered. The company will be entitled
to a deduction at the same time as, and in an amount equal to, the
income realized by the grantee.
●
Code Section 409A : To the extent that any award under the
Plan is or may be considered to involve a nonqualified deferred
compensation plan or deferral subject to the Code Section 409A, the
terms and administration of such award shall comply with the
provisions of such section and final regulations issued
thereunder.
OUTSTANDING VOTING SECURITIES
As of
December 8, 2021, the Company has an authorized share capital of
50,000,000 shares of common stock, par value $0.001. It has
24,058,893 shares of Common Stock issued and 3,014,246 outstanding common stock purchase
warrants exercisable at $0.25 per common share.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
number of shares of our common stock owned beneficially as of
December 8, 2021, by: (i) each of our directors; (ii) each of our
named executive officers; and (iii) each person or group known by
us to beneficially own more than 5% of our outstanding shares of
common stock. Unless otherwise indicated, the shareholders listed
below possess sole voting and investment power with respect to the
shares they own.
Beneficial ownership has been determined in accordance with Rule
13d-3 under the Exchange Act. Under this rule, certain shares may
be deemed to be beneficially owned by more than one person (if, for
example, persons share the power to vote or the power to dispose of
the shares). In addition, shares are deemed to be beneficially
owned by a person if the person has the right to acquire shares
(for example, upon exercise of an option or warrant) within 60 days
of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares is
deemed to include the amount of shares beneficially owned by such
person by reason of such acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person’s
actual voting power at any particular date.
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership (1) (#)
|
|
Shannon
Wilkinson (3)
|
3,000,000
|
12.47%
|
Troy
Wilkinson (4)
|
3,000,000
|
12.47%
|
Michael
De Valera (5)
|
1,020,000
|
4.24%
|
Chris C. White (6)
|
108,000
|
0.45%
|
All
Officers, Directors and Beneficial Owners as a Group (4
persons)
|
7,128,000
|
29.63%
|
(1) The number and percentage of shares beneficially owned is
determined under rules of the SEC and the information is not
necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or
investment power and also any shares, which the individual has the
right to acquire within 60 days through the exercise of any stock
option or other right. The persons named in the table have sole
voting and investment power with respect to all shares of common
stock shown as beneficially owned by them, subject to community
property laws where applicable and the information contained in the
footnotes to this table.
(2) Based on 24,058,893issued
and outstanding shares of common stock as of December 8,
2021.
(3) Shannon Wilkinson is a Director and the Company's CEO, CFO,
Secretary and Treasurer. Her beneficial ownership includes
3,000,000 common shares.
(4) Troy Wilkinson is a Director and the Company’s President.
His beneficial ownership includes 3,000,000 common
shares.
(5) Michael De Valera is member of the Company’s Board of
Directors. His beneficial ownership includes 1,020,000 common
shares directly owned.
(6) Chris C. White is a member of the Company’s Board of
Directors. His beneficial ownership includes 108,000 common shares
directly owned.
ADDITIONAL INFORMATION
The
Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and in accordance therewith files reports, proxy
statements and other information including annual and quarterly
reports on Form 10-K and 10-Q (the “1934 Act Filings”)
with the Commission. The Commission maintains a web site on the
Internet (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding issuers that
file electronically with the Commission through the Electronic Data
Gathering, Analysis and Retrieval System
(“EDGAR”).
FORWARD-LOOKING STATEMENTS AND INFORMATION
This
Information Statement includes forward-looking statements. You can
identify the Company’s forward-looking statements by the
words “expects,” “projects,”
“believes,” “anticipates,”
“intends,” “plans,” “predicts,”
“estimates” and similar expressions.
The
forward-looking statements are based on management’s current
expectations, estimates and projections about us. The Company
cautions you that these statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
we cannot predict. In addition, the Company has based many of these
forward-looking statements on assumptions about future events that
may prove to be inaccurate. Accordingly, actual outcomes and
results may differ materially from what the Company has expressed
or forecast in the forward-looking statements.
You
should rely only on the information the Company has provided in
this Information Statement. The Company has not authorized any
person to provide information other than that provided herein. The
Company has not authorized anyone to provide you with different
information. You should not assume that the information in this
Information Statement is accurate as of any date other than the
date on the front of the document.
DISSENTER’S RIGHTS OF APPRAISAL
The
Stockholders have no right under Nevada Corporate Law, the
Company’s Articles consistent with above, or Bylaws to
dissent from any of the provisions adopted in by the
Board.
CONCLUSION
As a
matter of regulatory compliance, we are sending you this
Information Statement which describes the purpose and effect of the
above Actions. Your consent to the above action is not required and
is not being solicited in connection with this action. This
Information Statement is intended to provide our Stockholders
information required by the rules and regulations of the Securities
Exchange Act of 1934.
WE ARE
NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THE ATTACHED MATERIAL IS FOR INFORMATIONAL PURPOSES
ONLY.
Dated:
December 10, 2021
BY ORDER OF THE COMPANY’S BOARD OF DIRECTORS
|
By:
/s/
Shannon Wilkinson
Shannon
Wilkinson
Chief
Executive Officer
|
APPENDIX ‘A’
TEGO
CYBER INC.
2021 EQUITY COMPENSATION PLAN
The
purpose of the Tego Cyber Inc. 2021 Equity Compensation Plan (the
“Plan”)
is to provide employees of Tego Cyber Inc. (the “Company”), certain
consultants and advisors who perform services for the
Company, and non-employee
members of the Board of Directors of the Company with the
opportunity to receive grants of incentive stock options,
nonqualified stock options, stock appreciation rights, stock
awards, stock units and other stock-based awards.
The
Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby
benefitting the Company’s stockholders, and will align the
economic interests of the participants with those of the
stockholders.
Section 1. Definitions
The
following terms shall have the meanings set forth below for
purposes of the Plan:
(a) “Award” shall mean an
Option, SAR, Stock Award, Stock Unit or Other Stock-Based Award
granted under the Plan.
(b) “Award Agreement” shall
mean the written agreement that sets forth the terms and conditions
of an Award, including all amendments thereto.
(c) “Board” shall mean the
Board of Directors of the Company.
(d) “Cause” shall have the
meaning given to that term in any written employment agreement,
offer letter, consulting agreement or severance agreement between
the Employer and the Participant, or if no such agreement exists or
if such term is not defined therein, and unless otherwise defined
in the Award Agreement, “Cause” shall mean a
finding by the Committee of conduct involving one or more of the
following: (i) the substantial and continuing failure of the
Participant, after notice thereof, to render services to the
Company or its subsidiaries in accordance with the terms or
requirements of his or her employment, engagement as a Non-Employee
Director or a Key Advisor; (ii) disloyalty, gross negligence,
willful misconduct, dishonesty or breach of fiduciary duty to the
Company or a subsidiary; (iii) the commission of an act of
embezzlement or fraud; (iv) deliberate disregard of the rules or
policies of the Company or a subsidiary which results in direct or
indirect loss, damage or injury to the Company or a subsidiary; (v)
the unauthorized disclosure of any trade secret or confidential
information of the Company or a subsidiary; or (vi) the
Participant’s breach of any written non-competition,
non-solicitation, invention assignment or confidentiality agreement
between the Participant and the Company or any of its
subsidiaries.
(e) A
“Change in
Control” shall be deemed to have occurred
if:
(i) the
acquisition, directly or indirectly, by a “person”
(within the meaning of Section 13(d)(3) of the Exchange Act) (a
“Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of the combined voting power of the
voting securities of the Company entitled to vote generally in the
election of directors (the “Voting Securities”);
provided, however, that the following acquisitions of Voting
Securities shall not constitute a Change in Control: (A) any
acquisition by or from the Company or any of its subsidiaries, or
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, (B) any
acquisition by any underwriter in any firm commitment underwriting
of securities to be issued by the Company, or (C) any acquisition
by any corporation (or other entity) if, immediately following such
acquisition, 50% or more of the then outstanding shares of common
stock (or other equity unit) of such corporation (or other entity)
and the combined voting power of the then outstanding voting
securities of such corporation (or other entity), are beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who, immediately prior to such acquisition,
were the beneficial owners of the then outstanding shares of Common
Stock and the Voting Securities in substantially the same
proportions, respectively, as their ownership immediately prior to
the acquisition of the shares of Common Stock and Voting
Securities; or
(ii) the
consummation of the sale or other disposition of all or
substantially all of the assets of the Company, other than to a
wholly-owned subsidiary of the Company or to a holding company of
which the Company is a direct or indirect wholly owned subsidiary
prior to such transaction; or
(iii) the
following individuals cease for any reason to constitute a majority
of the Board in any (12) month period: individuals who, as of the
Effective Date, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including, but not
limited to, a consent solicitation relating to the election of
directors of the Company) whose appointment or election by the
Board or nomination for election by the Company’s
stockholders was approved and recommended by a vote of at least
two-thirds of the directors then still in office who either were
directors on the Effective Date or whose appointment, election or
nomination for election was previously so approved or
recommended.
The
Committee may modify the definition of Change of Control for a
particular Grant as the Committee deems appropriate to comply with
section 409A of the Code or otherwise. Notwithstanding the
foregoing, if an Award constitutes deferred compensation subject to
section 409A of the Code and the Award provides for payment upon a
Change in Control, then, for purposes of such payment provisions,
no Change in Control shall be deemed to have occurred upon an event
described in clauses (i) – (iii) above unless the event would also
constitute a change in ownership or effective control of, or a
change in the ownership of a substantial portion of the assets of,
the Company under section 409A of the Code.
(f) “Code” shall mean the
Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
(g) “Committee” shall mean the
Compensation Committee of the Board or another committee appointed
by the Board to administer the Plan; provided however, until a
Compensation Committee or another committee is appointed by the
Board to serve as the Committee, the Committee shall be the
Board.
(h) “Common Stock” shall mean
the common stock, par value $0.001 per share, of the
Company.
(i) “Company” shall mean Tego
Cyber Inc. as defined in the preamble and shall include its
successors.
(j) “Disability” or
“Disabled” shall mean,
unless otherwise set forth in the Award Agreement, a
Participant’s becoming disabled within the meaning of the
Employer’s long-term disability plan applicable to the
Participant, or, if there is no such plan, disabled under Treasury
Regulation Section 1.409A-3(i)(4) or its successor.
(k) “Dividend Equivalent”
shall mean an amount determined by multiplying the number of shares
of Common Stock subject to a Stock Unit or Other Stock-Based Award
by the per-share cash dividend paid by the Company on its
outstanding Common Stock, or the per-share Fair Market Value of any
dividend paid on its outstanding Common Stock in consideration
other than cash.
(l) “Effective Date” shall
mean the date of stockholder approval of the Plan.
(m) “Employee” shall mean an
employee of the Employer (including an officer or director who is
also an employee), but excluding any person who is classified by
the Employer as a “contractor” or
“consultant,” no matter how characterized by the
Internal Revenue Service, other governmental agency or a court. Any
change of characterization of an individual by the Internal Revenue
Service or any court or government agency shall have no effect upon
the classification of an individual as an Employee for purposes of
this Plan unless the Committee determines otherwise.
(n) “Employed by, or providing service to,
the Employer” shall mean employment or service as an
Employee, Key Advisor or member of the Board (so that, for purposes
of exercising Options and SARs and satisfying conditions with
respect to Stock Awards, Stock Units and Other Stock-Based Awards,
a Participant shall not be considered to have terminated employment
or service until the Participant ceases to be an Employee, Key
Advisor and member of the Board), unless the Committee determines
otherwise. If a Participant’s relationship is with a
subsidiary of the Company and that entity ceases to be a subsidiary
of the Company, the Participant will be deemed to cease employment
or service when the entity ceases to be a subsidiary of the
Company, unless the Participant transfers employment or service to
an Employer.
(o) “Employer” shall mean the
Company and its subsidiaries (if applicable).
(p) “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.
(q) “Exercise Price” shall
mean the per share price at which shares of Common Stock may be
purchased under an Option, as designated by the
Committee.
(r) “Fair Market Value” shall
mean:
(i) If the Common Stock
is publicly traded, the Fair Market Value per share shall be
determined as follows: (A) if the principal trading market for the
Common Stock is a national securities exchange, the closing sales
price during regular trading hours on the relevant date or, if
there were no trades on that date, the latest preceding date upon
which a sale was reported, or (B) if the Common Stock is not
principally traded on any such exchange, the last reported sale
price of a share of Common Stock during regular trading hours on
the relevant date, as reported by the OTC Bulletin
Board.
(ii) If
the Common Stock is not publicly traded or, if publicly traded, is
not subject to reported transactions as set forth above, the Fair
Market Value per share shall be determined by the Committee through
any reasonable valuation method authorized under the Code,
including Section 409A of the Code.
(s) “Incentive
Stock Option” shall mean an Option that is intended to
meet the requirements of an incentive stock option under section
422 of the Code.
(t) “Key Advisor” shall mean a
consultant or advisor of the Employer.
(u) “Non-Employee Director”
shall mean a member of the Board who is not an
Employee.
(v) “Nonqualified Stock
Option” shall mean an Option that is not intended to
be taxed as an incentive stock option under section 422 of the
Code.
(w) “Option” shall mean an
option to purchase shares of Common Stock, as described in Section
6.
(x) “Other Stock-Based Award”
shall mean any Award based on, measured by or payable in Common
Stock (other than an Option, Stock Unit, Stock Award, or SAR), as
described in Section 10.
(y) “Participant” shall mean
an Employee, Key Advisor or Non-Employee Director
designated by the Committee to participate in the
Plan.
(z) “Performance Objectives”
shall mean the performance objectives established in the sole
discretion of the Committee for Participants who are eligible to
receive Awards under the Plan. Performance Objectives may be
described in terms of Company-wide objectives or objectives that
are related to the performance of the individual Participant or the
subsidiary, division, department or function within the Company or
one of its subsidiaries in which the Participant is employed.
Performance Objectives may be measured on an absolute or relative
basis. Relative performance may be measured by a group of peer
companies or by a financial market index. Any Performance
Objectives may include: specified levels of or increases in the
Company’s, a division’s or a subsidiary’s return
on capital, equity or assets; earnings measures/ratios (on a gross,
net, pre-tax or post-tax basis), including basic earnings per
share, diluted earnings per share, total earnings, operating
earnings, earnings growth, earnings before interest and taxes and
earnings before interest, taxes, depreciation and amortization; net
economic profit (which is operating earnings minus a charge to
capital); net income; operating income; sales; sales growth; gross
margin; direct margin; costs; stock price (including but not
limited to growth measures and total stockholder return); operating
profit; per period or cumulative cash flow (including but not
limited to operating cash flow and free cash flow) or cash flow
return on investment (which equals net cash flow divided by total
capital); inventory turns; financial return ratios; market share;
balance sheet measurements such as receivable turnover; improvement
in or attainment of expense levels; improvement in or attainment of
working capital levels; debt reduction; strategic innovation;
customer or employee satisfaction; the consummation of one or more
acquisitions of a certain size as measured by one or more of the
financial criteria listed above; individual objectives; regulatory
body approval for commercialization of a product; implementation or
completion of critical projects; and any combination of the
foregoing.
(aa) “Plan”
shall mean this Tego Cyber Inc. 2021 Equity Compensation Plan as
defined in the preamble, as may be in effect from time to
time.
(bb) “Restriction
Period” shall have the meaning given that term in
Section 7(a).
(cc) “SAR”
shall mean a stock appreciation right, as described in Section
9.
(dd) “Stock
Award” shall mean an award of Common Stock, as
described in Section 7.
(ee) “Stock
Unit” shall mean an award of a phantom unit
representing a share of Common Stock, as described in Section
8.
(ff) “Substitute
Awards” shall have the meaning given that term in
Section 4(c).
Section 2. Administration
(a) Committee. The Plan shall be
administered and interpreted by the Committee. The Committee may
delegate authority to one or more subcommittees, as it deems
appropriate. Subject to compliance with applicable law and the
applicable stock exchange rules, the Board, in its discretion, may
perform any action of the Committee hereunder. To the extent that
the Board, the Committee or a subcommittee administers the Plan,
references in the Plan to the “Committee” shall be
deemed to refer to the Board, the Committee or such
subcommittee.
(b) Committee Authority. The
Committee shall have the sole authority to (i) determine the
individuals to whom Awards shall be made under the Plan, (ii)
determine the type, size, terms and conditions of the Awards to be
made to each such individual, (iii) determine the time when the
Awards will be made and the duration of any applicable exercise or
restriction period, including the criteria for exercisability and
the acceleration of exercisability, (v) amend the terms of any
previously issued Award, subject to the provisions of Section 17
below, and (vi) deal with any other matters arising under the
Plan.
(c) Committee Determinations. The
Committee shall have full power and express discretionary authority
to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations,
agreements and instruments for implementing the Plan and for the
conduct of its business as it deems necessary or advisable, in its
sole discretion. The Committee’s interpretations of the Plan
and all determinations made by the Committee pursuant to the powers
vested in it hereunder shall be conclusive and binding on all
persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need
not be uniform as to similarly situated individuals.
(d) Indemnification. No member of
the Committee or the Board, and no employee of the Company shall be
liable for any act or failure to act with respect to the Plan,
except in circumstances involving his or her bad faith or willful
misconduct, or for any act or failure to act hereunder by any other
member of the Committee or employee or by any agent to whom duties
in connection with the administration of this Plan have been
delegated. The Company shall indemnify members of the Committee and
the Board and any agent of the Committee or the Board who is an
employee of the Company or a subsidiary against any and all
liabilities or expenses to which they may be subjected by reason of
any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person’s bad
faith or willful misconduct.
Section 3. Awards
(a) General. Awards under the Plan
may consist of Options as described in Section 6, Stock Awards as
described in Section 7, Stock Units as described in Section 8, SARs
as described in Section 9 and Other Stock-Based Awards as described
in Section 10. All Awards shall be subject to the terms and
conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in the
Award Agreement. All Awards shall be made conditional upon the
Participant’s acknowledgement, in writing or by acceptance of
the Award, that all decisions and determinations of the Committee
shall be final and binding on the Participant, his or her
beneficiaries and any other person having or claiming an interest
under such Award. Awards under a particular Section of the Plan
need not be uniform as among the Participants. Notwithstanding
anything to the contrary herein, any dividends or Dividend
Equivalents granted in connection with Awards under the Plan shall
vest and be paid only if and to the extent the underlying Awards
vest and are paid.
Section 4. Shares
Subject to the Plan
(a) Shares
Authorized. Subject to adjustment as described below in
Sections 4(b) and 4(e), the maximum aggregate number of shares of
Common Stock that may be issued or transferred under the Plan with
respect to Awards made under the Plan on and after the Effective
Date shall be 10,000,000 shares.
(b) Source
of Shares; Share Counting. Shares issued or transferred
under the Plan may be authorized but unissued shares of Common
Stock or reacquired shares of Common Stock, including shares
purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options or SARs granted under the Plan
terminate, expire or are canceled, forfeited, exchanged or
surrendered without having been exercised, or if any Stock Awards,
Stock Units, or Other Stock-Based Awards are forfeited, terminated
or otherwise not paid in full, the shares subject to such Awards
shall again be available for purposes of the Plan. Shares
surrendered in payment of the Exercise Price of an Option shall not
be available for re-issuance under the Plan. Shares of Common Stock
withheld or surrendered for payment of taxes with respect to Awards
shall not be available for re-issuance under the Plan. If SARs are
granted, the full number of shares subject to the SARs shall be
considered issued under the Plan, without regard to the number of
shares issued upon exercise of the SARs. To the extent any Awards are paid in cash, and not
in shares of Common Stock, any shares previously subject to such
Awards shall again be available for issuance or transfer under the
Plan. For the avoidance of doubt, if shares are repurchased
by the Company on the open market with the proceeds of the Exercise
Price of Options, such shares may not again be made available for
issuance under the Plan
(c) Substitute Awards. Shares
issued or transferred under Awards made pursuant to an assumption,
substitution or exchange for previously granted awards of a company
acquired by the Company in a transaction (“Substitute Awards”) shall
not reduce the number of shares of Common Stock available under the
Plan and available shares under a stockholder approved plan of an
acquired company (as appropriately adjusted to reflect the
transaction) may be used for Awards under the Plan and shall not
reduce the Plan’s share reserve (subject to applicable stock
exchange listing and Code requirements).
(d) Individual Non-Employee Director
Limit. Subject to adjustment as described below in Section
4(e), the maximum aggregate grant date value of shares of Common
Stock subject to Awards granted to any Non-Employee Director during
any calendar year for services rendered as a Non-Employee Director,
taken together with any cash fees earned by such Non-Employee
Director for services rendered as a Non-Employee Director during
the calendar year, shall not exceed $1,000,0000 in total value. For
purposes of the limits set forth in this Section 4(d), the value of
such Awards shall be calculated based on the grant date fair value
of such Awards for financial reporting purposes.
(e) Adjustments. If there is any
change in the number or kind of shares of Common Stock outstanding
by reason of (i) a stock dividend, spinoff, recapitalization, stock
split, reverse stock split or combination or exchange of shares,
(ii) a merger, reorganization or consolidation, (iii) a
reclassification or change in par value, or (iv) any other unusual
or infrequently occurring event affecting the outstanding Common
Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Common
Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or
distribution, the maximum number and kind of shares of Common Stock
available for issuance under the Plan, the maximum number and kind
of shares of Common Stock for which any individual may receive
Awards in any year, the kind and number of shares covered by
outstanding Awards, the kind and number of shares issued and to be
issued under the Plan, and the price per share or the applicable
market value of such Awards shall be equitably adjusted by the
Committee to reflect any increase or decrease in the number of, or
change in the kind or value of, the issued shares of Common Stock
to preclude, to the extent practicable, the enlargement or dilution
of rights and benefits under the Plan and such outstanding Awards;
provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. In addition, in the event of a
Change in Control, the provisions of Section 12 of the Plan shall
apply. Any adjustments to outstanding Awards shall be consistent
with section 409A or 424 of the Code, to the extent applicable.
Subject to Section 17(b) below, the adjustments of Awards under
this Section 4(e) shall include adjustment of shares, Exercise
Price of Stock Options, base number of SARs, Performance Objectives
or other terms and conditions, as the Committee deems appropriate.
The Committee shall have the sole discretion and authority to
determine what appropriate adjustments shall be made and any
adjustments determined by the Committee shall be final, binding and
conclusive.
Section 5. Eligibility
for Participation
(a) Eligible Persons. All Employees
and Non-Employee Directors shall be eligible to participate in the
Plan. Key Advisors shall be eligible to participate in the Plan if
the Key Advisors render bona fide services to the Employer, the
services are not in connection with the offer and sale of
securities in a capital-raising transaction and the Key Advisors do
not directly or indirectly promote or maintain a market for the
Company’s securities.
(b) Selection of Participants. The
Committee shall select the Employees, Non-Employee Directors and
Key Advisors to receive Awards and shall determine the number of
shares of Common Stock subject to a particular Award in such manner
as the Committee determines.
Section 6. Options
The
Committee may grant Options to an Employee, Non-Employee Director
or Key Advisor upon such terms as the Committee deems appropriate.
The following provisions are applicable to Options:
(a) Number of Shares. The Committee
shall determine the number of shares of Common Stock that will be
subject to each Award of Options to Employees, Non-Employee
Directors and Key Advisors.
(b) Type of Option and Exercise
Price.
(i) The Committee may
grant Incentive Stock Options or Nonqualified Stock Options or any
combination of the two, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted
only to employees of the Company or its parent or subsidiary
corporations, as defined in section 424 of the Code. Nonqualified
Stock Options may be granted to Employees, Non-Employee Directors
and Key Advisors.
(ii) The
Exercise Price of Common Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than
the Fair Market Value of a share of Common Stock on the date the
Option is granted. However, an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company, or any parent or subsidiary
corporation of the Company, as defined in section 424 of the Code,
unless the Exercise Price per share is not less than 110% of the
Fair Market Value of a share of Common Stock on the date of
grant.
(c) Option Term. The Committee
shall determine the term of each Option. The term of any Option
shall not exceed ten years from the date of grant. However, an
Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, or
any parent or subsidiary corporation of the Company, as defined in
section 424 of the Code, may not have a term that exceeds five
years from the date of grant.
(d) Exercisability of Options.
Options shall become exercisable in accordance with such terms and
conditions, consistent with the Plan, as may be determined by the
Committee and specified in the Award Agreement. Subject to the
limitations set forth in Section 12, the Committee may accelerate
the exercisability of any or all outstanding Options at any time
for any reason.
(e) Awards to Non-Exempt Employees.
Notwithstanding the foregoing, Options granted to persons who are
non-exempt employees under the Fair Labor Standards Act of 1938, as
amended, may not be exercisable for at least six months after the
date of grant (except that such Options may become exercisable, as
determined by the Committee, upon the Participant’s death,
Disability or retirement, or upon a Change in Control or other
circumstances permitted by applicable regulations).
(f) Termination of Employment or
Service. Except as provided in the Award Agreement, an
Option may only be exercised while the Participant is employed by,
or providing services to, the Employer. The Committee shall
determine in the Award Agreement under what circumstances and
during what time periods a Participant may exercise an Option after
termination of employment or service.
(g) Exercise of Options. A
Participant may exercise an Option that has become exercisable, in
whole or in part, by delivering a notice of exercise to the
Company. The Participant shall pay the Exercise Price for an Option
as specified by the Committee (i) in cash or by check, (ii) unless
the Committee determines otherwise, by delivering shares of Common
Stock owned by the Participant and having a Fair Market Value on
the date of exercise at least equal to the Exercise Price or by
attestation (on a form prescribed by the Committee) to ownership of
shares of Common Stock having a Fair Market Value on the date of
exercise at least equal to the Exercise Price, (iii) by payment
through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, (iv) if permitted by the
Committee, by withholding shares of Common Stock subject to the
exercisable Option, which have a Fair Market Value on the date of
exercise equal to the Exercise Price, or (v) by such other method
as the Committee may approve. Shares of Common Stock used to
exercise an Option shall have been held by the Participant for the
requisite period of time necessary to avoid adverse accounting
consequences to the Company with respect to the Option. Payment for
the shares to be issued or transferred pursuant to the Option, and
any required withholding taxes, must be received by the Company by
the time specified by the Committee depending on the type of
payment being made, but in all cases prior to the issuance or
transfer of such shares.
(h) Limits on Incentive Stock
Options. Each Incentive Stock Option shall provide that, if
the aggregate Fair Market Value of the Common Stock on the date of
the grant with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar
year, under the Plan or any other stock option plan of the Company
or a parent or subsidiary, exceeds $100,000, then the Option, as to
the excess, shall be treated as a Nonqualified Stock
Option.
Section 7. Stock
Awards
The
Committee may issue or transfer shares of Common Stock to an
Employee, Non-Employee Director or Key Advisor under a Stock Award,
upon such terms as the Committee deems appropriate. The following
provisions are applicable to Stock Awards:
(a) General Requirements. Shares of
Common Stock issued pursuant to Stock Awards may be issued for
consideration or for no consideration, and subject to restrictions
or no restrictions, as determined by the Committee. The Committee
may, but shall not be required to, establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or
according to such other criteria as the Committee deems
appropriate, including, without limitation, restrictions based upon
the achievement of specific Performance Objectives. The period of
time during which the Stock Awards will remain subject to
restrictions will be designated in the Award Agreement as the
“Restriction
Period.”
(b) Number of Shares. The Committee
shall determine the number of shares of Common Stock to be issued
or transferred pursuant to a Stock Award and the restrictions
applicable to such shares.
(c) Requirement of Employment or
Service. If the Participant ceases to be employed by, or
provide service to, the Employer during a period designated in the
Award Agreement as the Restriction Period, or if other specified
conditions are not met, the Stock Award shall terminate as to all
shares covered by the Award as to which the restrictions have not
lapsed, and those shares of Common Stock must be immediately
returned to the Company. Subject to the limitations set forth in
Section 12, the Committee may, however, provide for complete or
partial exceptions to this requirement as it deems
appropriate.
(d) Restrictions on Transfer and Legend on
Stock Certificate. During the Restriction Period, a
Participant may not sell, assign, transfer, pledge or otherwise
dispose of the shares of a Stock Award except under Section 15
below. Unless otherwise determined by the Committee, the Company
will retain possession of certificates for shares of Stock Awards
until all restrictions on such shares have lapsed. Each certificate
for a Stock Award, unless held by the Company, shall contain a
legend giving appropriate notice of the restrictions in the Award.
The Participant shall be entitled to have the legend removed from
the stock certificate covering the shares subject to restrictions
when all restrictions on such shares have lapsed. The Committee may
determine that the Company will not issue certificates for Stock
Awards until all restrictions on such shares have
lapsed.
(e) Right to Vote and to Receive
Dividends. Unless the Committee determines otherwise, during
the Restriction Period, the Participant shall have the right to
vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, subject to any restrictions
deemed appropriate by the Committee, including, without limitation,
the achievement of specific Performance Objectives; provided,
however, that dividends shall vest and be paid only if and to the
extent that the underlying Stock Award vests and is
paid.
(f) Lapse of Restrictions. All
restrictions imposed on Stock Awards shall lapse upon the
expiration of the applicable Restriction Period and the
satisfaction of all conditions, if any, imposed by the Committee.
The Committee may determine, as to any or all Stock Awards, that
the restrictions shall lapse without regard to any Restriction
Period.
Section 8. Stock
Units
The
Committee may grant Stock Units, each of which shall represent one
hypothetical share of Common Stock, to an Employee, Non-Employee
Director or Key Advisor upon such terms and conditions as the
Committee deems appropriate. The following provisions are
applicable to Stock Units:
(a) Crediting of Units. Each Stock
Unit shall represent the right of the Participant to receive a
share of Common Stock or an amount of cash based on the value of a
share of Common Stock, if and when specified conditions are met.
All Stock Units shall be credited to bookkeeping accounts
established on the Company’s records for purposes of the
Plan.
(b) Terms of Stock Units. The
Committee may grant Stock Units that vest and are payable if
specified Performance Objectives or other conditions are met, or
under other circumstances. Stock Units may be paid at the end of a
specified performance period or other period, or payment may be
deferred to a date authorized by the Committee. Subject to the
limitations set forth in Section 12, the Committee may accelerate
vesting or payment, as to any or all Stock Units at any time for
any reason, provided such acceleration complies with section 409A
of the Code. The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock
Units.
(c) Requirement of Employment or
Service. If the Participant ceases to be employed by, or
provide service to, the Employer prior to the vesting of Stock
Units, or if other conditions established by the Committee are not
met, the Participant’s Stock Units shall be forfeited. The
Committee may, however, provide for complete or partial exceptions
to this requirement as it deems appropriate.
(d) Payment With Respect to Stock
Units. Payments with respect to Stock Units shall be made in
cash, Common Stock or any combination of the foregoing, as the
Committee shall determine.
Section 9. Stock
Appreciation Rights
The
Committee may grant SARs to an Employee, Non-Employee Director or
Key Advisor separately or in tandem with any Option. The following
provisions are applicable to SARs:
(a) General Requirements. The
Committee may grant SARs to an Employee, Non-Employee Director or
Key Advisor separately or in tandem with any Option (for all or a
portion of the applicable Option). Tandem SARs may be granted
either at the time the Option is granted or at any time thereafter
while the Option remains outstanding; provided, however, that, in
the case of an Incentive Stock Option, SARs may be granted only at
the time of the grant of the Incentive Stock Option. The Committee
shall establish the base amount of the SAR at the time the SAR is
granted. The base amount of each SAR shall be equal to or greater
than the Fair Market Value of a share of Common Stock as of the
date of grant of the SAR. The term of any SAR shall not exceed ten
years from the date of grant.
(b) Tandem SARs. In the case of
tandem SARs, the number of SARs granted to a Participant that shall
be exercisable during a specified period shall not exceed the
number of shares of Common Stock that the Participant may purchase
upon the exercise of the related Option during such period. Upon
the exercise of an Option, the SARs relating to the Common Stock
covered by such Option shall terminate. Upon the exercise of SARs,
the related Option shall terminate to the extent of an equal number
of shares of Common Stock.
(c) Exercisability. A SAR shall be
exercisable during the period specified by the Committee in the
Award Agreement and shall be subject to such vesting and other
restrictions as may be specified in the Award Agreement. Subject to
the limitations set forth in Section 12, the Committee may
accelerate the exercisability of any or all outstanding SARs at any
time for any reason. SARs may only be exercised while the
Participant is employed by, or providing service to, the Employer
or during the applicable period after termination of employment or
service as specified by the Committee. A tandem SAR shall be
exercisable only during the period when the Option to which it is
related is also exercisable.
(d) Grants to Non-Exempt Employees.
Notwithstanding the foregoing, SARs granted to persons who are
non-exempt employees under the Fair Labor Standards Act of 1938, as
amended, may not be exercisable for at least six months after the
date of grant (except that such SARs may become exercisable, as
determined by the Committee, upon the Participant’s death,
Disability or retirement, or upon a Change in Control or other
circumstances permitted by applicable regulations).
(e) Value of SARs. When a
Participant exercises SARs, the Participant shall receive in
settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised. The stock
appreciation for an SAR is the amount by which the Fair Market
Value of the underlying Common Stock on the date of exercise of the
SAR exceeds the base amount of the SAR as described in subsection
(a).
(f) Form of Payment. The
appreciation in an SAR shall be paid in shares of Common Stock,
cash or any combination of the foregoing, as the Committee shall
determine. For purposes of calculating the number of shares of
Common Stock to be received, shares of Common Stock shall be valued
at their Fair Market Value on the date of exercise of the
SAR.
Section 10. Other
Stock-Based Awards
The
Committee may grant Other Stock-Based Awards, which are awards
(other than those described in Sections 6, 7, 8 and 9 of the Plan)
that are based on or measured by Common Stock, to any Employee,
Non-Employee Director or Key Advisor, on such terms and conditions
as the Committee shall determine. Other Stock-Based Awards may be
awarded subject to the achievement of Performance Objectives or
other criteria or other conditions and may be payable in cash,
Common Stock or any combination of the foregoing, as the Committee
shall determine.
Section 11. Dividend
Equivalents
The
Committee may grant Dividend Equivalents in connection with Stock
Units or Other Stock-Based Awards. Dividend Equivalents may be
payable in cash or shares of Common Stock, and upon such terms and
conditions as the Committee shall determine; provided that Dividend
Equivalents shall vest and be paid only if and to the extent the
underlying Stock Units or Other Stock-Based Awards vest and are
paid. For the avoidance of doubt, no dividends or Dividend
Equivalents will be granted in connection with Stock Options or
SARs.
Section 12. Consequences
of a Change in Control
(a) Assumption of Outstanding
Awards. Upon a Change in Control where the Company is not
the surviving corporation (or survives only as a subsidiary of
another corporation), all outstanding Awards that are not exercised
or paid at the time of the Change in Control shall be assumed by,
or replaced with grants that have comparable terms by, the
surviving corporation (or a parent or subsidiary of the surviving
corporation). In the event that the surviving corporation (or a
parent or subsidiary of the surviving corporation) does not assume
or replace Awards with grants that have comparable terms,
outstanding Stock Options and SARs shall automatically accelerate
and become fully exercisable and the restrictions and conditions on
outstanding Stock Awards, Stock Units, Other Stock-Based Awards and
Dividend Equivalents shall immediately lapse, provided that if the
vesting of any such Awards is based, in whole or in part, on
performance, such Awards shall vest based on the greater of (i)
actual performance as of the Change in Control or (ii) target
performance, pro-rated based on the period elapsed between the
beginning of the applicable performance period and the date of the
Change in Control. After a Change in Control, references to the
“Company” as they relate to employment matters shall
include the successor employer in the transaction, subject to
applicable law.
(b) Vesting Upon Certain Terminations of
Employment. At the Committee’s discretion, if Awards
are assumed by, or replaced with grants that have comparable terms
by, the surviving corporation (or a parent or subsidiary of the
surviving corporation) and if a Participant incurs an involuntary
termination of employment or service on or after a Change in
Control, the Participant’s outstanding Awards may become
vested, in whole or in part, as of the date of such termination;
provided that if the vesting of any such Awards is based, in whole
or in part, on performance, such Awards shall vest only based on
the greater of (i) actual performance as of the date of Change in
Control or (ii) target performance, pro-rated based on the period
elapsed between the beginning of the applicable performance period
and the date of the termination.
(c) Other
Alternatives. In the event of a Change in Control, if any
outstanding Awards are not assumed by, or replaced with grants that
have comparable terms by, the surviving corporation (or a parent or
subsidiary of the surviving corporation), the Committee may take
any of the following actions with respect to any or all outstanding
Awards, without the consent of any Participant: (i) the Committee
may determine that Participants shall receive a payment in
settlement of outstanding Stock Units, Other Stock-Based Awards or
Dividend Equivalents, in such amount and form as may be determined
by the Committee; (ii) the Committee may require that Participants
surrender their outstanding Stock Options and SARs in exchange for
a payment by the Company, in cash or Common Stock as determined by
the Committee, in an amount equal to the amount, if any, by which
the then Fair Market Value of the shares of Common Stock subject to
the Participant’s unexercised Stock Options and SARs exceeds
the Stock Option Exercise Price or SAR base amount, and (iii) after
giving Participants an opportunity to exercise all of their
outstanding Stock Options and SARs, the Committee may terminate any
or all unexercised Stock Options and SARs at such time as the
Committee deems appropriate. Such surrender, termination or payment
shall take place as of the date of the Change in Control or such
other date as the Committee may specify. Without limiting the
foregoing, if the per share Fair Market Value of the Common Stock
does not exceed the per share Stock Option Exercise Price or SAR
base amount, as applicable, the Company shall not be required to
make any payment to the Participant upon surrender of the Stock
Option or SAR.
Section 13. Deferrals
The
Committee may permit or require a Participant to defer receipt of
the payment of cash or the delivery of shares that would otherwise
be due to such Participant in connection with any Stock Units,
Other Stock-Based Awards and Dividend Equivalents. If any such
deferral election is permitted or required, the Committee shall
establish rules and procedures for such deferrals and may provide
for interest or other earnings to be paid on such deferrals. The
rules and procedures for any such deferrals shall be consistent
with applicable requirements of section 409A of the
Code.
Section 14. Withholding
of Taxes
(a) Required Withholding. All
Awards under the Plan shall be subject to applicable United States
federal (including FICA), state and local, foreign country or other
tax withholding requirements. The Employer may require that the
Participant or other person receiving Awards or exercising Awards
pay to the Employer an amount sufficient to satisfy such tax
withholding requirements with respect to such Awards, or the
Employer may deduct from other wages and compensation paid by the
Employer the amount of any withholding taxes due with respect to
such Awards.
(b) Share Withholding. The
Committee may permit or require the Employer’s tax
withholding obligation with respect to Awards paid in Common Stock
to be satisfied by having shares withheld up to an amount that does
not exceed the Participant’s applicable withholding tax rate
for United States federal (including FICA), state and local,
foreign country or other tax liabilities. The Committee may, in its
discretion, and subject to such rules as the Committee may adopt,
allow Participants to elect to have such share withholding applied
to all or a portion of the tax withholding obligation arising in
connection with any particular Award. Unless the Committee
determines otherwise, share withholding for taxes shall not exceed
the Participant’s minimum applicable tax withholding
amount.
Section 15. Transferability
of Awards
(a) Nontransferability of Awards.
Except as described in subsection (b) below, only the Participant
may exercise rights under an Award during the Participant’s
lifetime. A Participant may not transfer those rights except (i) by
will or by the laws of descent and distribution or (ii) with
respect to Awards other than Incentive Stock Options, pursuant to a
domestic relations order. When a Participant dies, the personal
representative or other person entitled to succeed to the rights of
the Participant may exercise such rights. Any such successor must
furnish proof satisfactory to the Company of his or her right to
receive the Award under the Participant’s will or under the
applicable laws of descent and distribution.
(b) Transfer
of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in an Award Agreement, that a
Participant may transfer Nonqualified Stock Options to family
members, or one or more trusts or other entities for the benefit of
or owned by family members, consistent with the applicable
securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration
for the transfer of an Option and the transferred Option shall
continue to be subject to the same terms and conditions as were
applicable to the Option immediately before the
transfer.
Section 16. Requirements
for Issuance or Transfer of Shares
No
Common Stock shall be issued or transferred in connection with any
Award hereunder unless and until all legal requirements applicable
to the issuance or transfer of such Common Stock have been complied
with to the satisfaction of the Committee. The Committee shall have
the right to condition any Award on the Participant’s
undertaking in writing to comply with such restrictions on his or
her subsequent disposition of the shares of Common Stock as the
Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Common Stock
issued or transferred under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee deems
appropriate to comply with applicable laws, regulations and
interpretations, including any requirement that a legend be placed
thereon.
Section 17. Amendment
and Termination of the Plan
(a) Amendment. The Board may amend
or terminate the Plan at any time; provided, however, that the
Board shall not amend the Plan without stockholder approval if such
approval is required in order to comply with the Code or other
applicable law, or to comply with applicable stock exchange
requirements.
(b) No Repricing of Options or
SARs. Except in connection with a corporate transaction
involving the Company (including, without limitation, any stock
dividend, distribution (whether in the form of cash, Common Stock,
other securities or property), stock split, extraordinary cash
dividend, recapitalization, change in control, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase
or exchange of shares of Common Stock or other securities, or
similar transactions), the Company may not, without obtaining
stockholder approval, (i) amend the terms of outstanding Stock
Options or SARs to reduce the Exercise Price of such outstanding
Stock Options or base price of such SARs, (ii) cancel outstanding
Stock Options or SARs in exchange for Stock Options or SARs with an
Exercise Price or base price, as applicable, that is less than the
Exercise Price or base price of the original Stock Options or SARs
or (iii) cancel outstanding Stock Options or SARs with an Exercise
Price or base price, as applicable, above the current stock price
in exchange for cash or other securities.
(c) Termination of Plan. The Plan
shall terminate on the day immediately preceding the tenth
anniversary of its Effective Date, unless the Plan is terminated
earlier by the Board or is extended by the Board with the approval
of the stockholders.
(d) Termination and Amendment of
Outstanding Awards. A termination or amendment of the Plan
that occurs after an Award is made shall not materially impair the
rights of a Participant unless the Participant consents or unless
the Committee acts under Section 18(f) below. The termination of
the Plan shall not impair the power and authority of the Committee
with respect to an outstanding Award. Whether or not the Plan has
terminated, an outstanding Award may be terminated or amended under
Section 18(f) below or may be amended by agreement of the Company
and the Participant consistent with the Plan, provided that the
Participant’s consent is not required if any termination or
amendment to the Participant’s outstanding Award does not
materially impair the rights or materially increase the obligations
of the Participant.
Section 18. Miscellaneous
(a) Awards in Connection with Corporate
Transactions and Otherwise. Nothing contained in the Plan
shall be construed to (i) limit the right of the Committee to make
Awards under the Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association,
including Awards to employees thereof who become Employees, or (ii)
limit the right of the Company to grant stock options or make other
awards outside of the Plan. The Committee may make a Substitute
Award to an employee of another corporation who becomes an Employee
by reason of a corporate merger, consolidation, acquisition of
stock or property, reorganization or liquidation involving the
Company, in substitution for a stock option or stock award granted
by such corporation. Notwithstanding anything in the Plan to the
contrary, the Committee may establish such terms and conditions of
the new Substitute Awards as it deems appropriate, including
setting the Exercise Price of Options or the base price of SARs at
a price necessary to retain for the Participant the same economic
value as the prior options or rights.
(b) Governing Document. The Plan
shall be the controlling document. No other statements,
representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be
binding upon and enforceable against the Company and its successors
and assigns.
(c) Funding of the Plan. The Plan
shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of
assets to assure the payment of any Awards under the
Plan.
(d) Rights of Participants. Nothing
in the Plan shall entitle any Employee, Non-Employee Director, Key
Advisor or other person to any claim or right to receive an Award
under the Plan. Neither the Plan nor any action taken hereunder
shall be construed as giving any individual any rights to be
retained by or in the employ of the Employer or any other
employment rights.
(e) No Fractional Shares. No
fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan or any Award. Except as otherwise provided
under the Plan, the Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.
(f) Compliance with
Law.
(i) The Plan, the
exercise of Options and SARs and the obligations of the Company to
issue or transfer shares of Common Stock under Awards shall be
subject to all applicable laws and regulations, and to approvals by
any governmental or regulatory agency as may be required. With
respect to persons subject to Section 16 of the Exchange Act, it is
the intent of the Company that the Plan and all transactions under
the Plan comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act. In addition, it is the intent of
the Company that Incentive Stock Options comply with the applicable
provisions of section 422 of the Code, and that, to the extent
applicable, Awards comply with the requirements of section 409A of
the Code. To the extent that any legal requirement of section 16 of
the Exchange Act or section 422, or 409A of the Code as set forth
in the Plan ceases to be required under section 16 of the Exchange
Act or section 422 or 409A of the Code, that Plan provision shall
cease to apply. The Committee may revoke any Award if it is
contrary to law or modify an Award to bring it into compliance with
any valid and mandatory government regulation. The Committee may
also adopt rules regarding the withholding of taxes on payments to
Participants. The Committee may, in its sole discretion, agree to
limit its authority under this Section.
(ii) The
Plan is intended to comply with the requirements of section 409A of
the Code, to the extent applicable. Each Award shall be construed
and administered such that the Award either (A) qualifies for an
exemption from the requirements of section 409A of the Code or (B)
satisfies the requirements of section 409A of the Code. If an Award
is subject to section 409A of the Code, (I) distributions shall
only be made in a manner and upon an event permitted under section
409A of the Code, (II) payments to be made upon a termination of
employment or service shall only be made upon a “separation
from service” under section 409A of the Code, (III) unless
the Award specifies otherwise, each installment payment shall be
treated as a separate payment for purposes of section 409A of the
Code, and (IV) in no event shall a Participant, directly or
indirectly, designate the calendar year in which a distribution is
made except in accordance with section 409A of the
Code.
(iii) Any
Award that is subject to section 409A of the Code and that is to be
distributed to a Key Employee (as defined below) upon separation
from service shall be administered so that any distribution with
respect to such Award shall be postponed for six months following
the date of the Participant’s separation from service, if
required by section 409A of the Code. If a distribution is delayed
pursuant to section 409A of the Code, the distribution shall be
paid within 15 days after the end of the six-month period. If the
Participant dies during such six-month period, any postponed
amounts shall be paid within 90 days of the Participant’s
death. The determination of Key Employees, including the number and
identity of persons considered Key Employees and the identification
date, shall be made by the Committee or its delegate each year in
accordance with section 416(i) of the Code and the “specified
employee” requirements of section 409A of the
Code.
(iv) Notwithstanding
anything in the Plan or any Award agreement to the contrary, each
Participant shall be solely responsible for the tax consequences of
Awards under the Plan, and in no event shall the Company or any
subsidiary or affiliate of the Company have any responsibility or
liability if an Award does not meet any applicable requirements of
section 409A of the Code. Although the Company intends to
administer the Plan to prevent taxation under section 409A of the
Code, the Company does not represent or warrant that the Plan or
any Award complies with any provision of federal, state, local or
other tax law.
(g) Establishment of Subplans. The
Board may from time to time establish one or more sub-plans under
the Plan for purposes of satisfying applicable blue sky, securities
or tax laws of various jurisdictions. The Board shall establish
such sub-plans by adopting supplements to the Plan setting forth
(i) such limitations on the Committee’s discretion under the
Plan as the Board deems necessary or desirable and (ii) such
additional terms and conditions not otherwise inconsistent with the
Plan as the Board shall deem necessary or desirable. All
supplements adopted by the Board shall be deemed to be part of the
Plan, but each supplement shall apply only to Participants within
the affected jurisdiction and the Employer shall not be required to
provide copies of any supplement to Participants in any
jurisdiction that is not affected.
(h) Clawback Rights. Subject to the
requirements of applicable law, the
Committee may provide in any Award Agreement that, if a Participant
breaches any restrictive covenant agreement between the Participant
and the Employer (which may be set forth in any Award Agreement) or
otherwise engages in activities that constitute Cause either while
employed by, or providing service to, the Employer or within the
applicable period of time thereafter, all Awards held by the
Participant shall terminate, and the Company may rescind any
exercise of an Option or SAR and the vesting of any other Award and
delivery of shares upon such exercise or vesting (including
pursuant to dividends and Dividend Equivalents), as applicable on
such terms as the Committee shall determine, including the right to
require that in the event of any such rescission, (i) the
Participant shall return to the Company the shares received upon
the exercise of any Option or SAR and/or the vesting and payment of
any other Award (including pursuant to dividends and Dividend
Equivalents) or (ii) if the Participant no longer owns the shares,
the Participant shall pay to the Company the amount of any gain
realized or payment received as a result of any sale or other
disposition of the shares (or, in the event the Participant
transfers the shares by gift or otherwise without consideration,
the Fair Market Value of the shares on the date of the breach of
the restrictive covenant agreement or activity constituting Cause),
net of the price originally paid by the Participant for the shares.
Payment by the Participant shall be made in such manner and on such
terms and conditions as may be required by the Committee. The
Employer shall be entitled to set off against the amount of any
such payment any amounts otherwise owed to the Participant by the
Employer. In addition, all Awards under the Plan shall be subject
to any applicable clawback or recoupment policies, share trading
policies and other policies that may be implemented by the Board
from time to time.
(i) Governing Law. The validity,
construction, interpretation and effect of the Plan and Award
Agreements issued under the Plan shall be governed and construed by
and determined in accordance with the laws of the State of Nevada,
without giving effect to the conflict of laws provisions
thereof.