UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
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Check
the appropriate box:
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X
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Preliminary
Information Statement
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□
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Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
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□
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Definitive
Information Statement
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TAPIMMUNE
INC.
(Name of
Registrant as Specified in the Charter)
Payment
of Filing Fee (Check the appropriate box):
X No
fee required.
□ Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1)
Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
(Set
forth the amount on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
□ Fee
paid previously with preliminary materials.
□ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4) Date Filed:
INFORMATION
STATEMENT
OF
TAPIMMUNE
INC.
800
Bellevue Way NE, Suite 400
Bellevue,
WA 98004
We
Are Not Asking You For A Proxy, And You Are Requested Not To Send Us A
Proxy.
This
Information Statement is to notify shareholders of our common stock of actions
to be taken by the majority shareholders of our common stock in lieu of a
special meeting of shareholders. This Information Statement is being mailed on
or about January , 2010 to all of our
shareholders of record at the close of business on January ,
2009 (the "Record Date"). As of the Record Date, there were approximately
38,361,674 shares entitled to vote on the matters set forth herein.
Holders
of 21,331,209 shares of our common stock, representing approximately 55.6% of
our outstanding common stock, have executed a written consent in lieu of Annual
Meeting (the "Written Consent"), with an effective date of December 28, 2009
to
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amend
our Articles of Incorporation, in the form of Exhibit A, to increase our
authorized share capital from 55 million authorized shares, consisting of
50 million shares of common stock and 5 million shares of preferred stock,
to 155,000,000 million authorized shares, consisting of 150,000,000
million shares of common stock and 5 million shares of preferred
stock,
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adopt
the 2009 Stock Incentive Plan (the "Plan"), substantially in the form of
Exhibit B, pursuant to which our board of directors is given the ability
to provide incentives through the issuance of options, stock, restricted
stock, and other stock-based awards, representing up to 10,000,000 shares
of our common stock, to certain employees, directors, officers and
consultants and
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reduce
the exercise price of the options granted under our 2007 Stock Incentive
Plan to purchase common shares from $2.50 per common share to $0.97 per
common share.
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The
actions described above will take effect approximately 20 days after the mailing
of this Information Statement to our shareholders on the Record
Date.
Because
holders of approximately 21,331,209 of our common stock, representing 55.6% of
our outstanding common stock, have executed the Written Consent, no vote or
consent of any other shareholder is being, or will be, solicited in connection
with the authorization of the matters set forth in the Written Consent. Under
Nevada law, the votes represented by the holders signing the Written Consent are
sufficient in number to authorize the matters set forth in the Written Consent,
without the vote or consent of any of our other shareholders. Nevada statutes
provide that any action that is required to be taken, or that may be taken, at
any annual or special meeting of shareholders of a Nevada corporation may be
taken, without a meeting, without prior notice and without a vote, if a written
consent, setting forth the actions taken, is signed by the holders of
outstanding capital stock having not less than the minimum number of votes
necessary to authorize such action.
This
Information Statement is expected to be mailed to shareholders on or
about January , 2009. We will bear all expenses
incurred in connection with the distribution of this Information Statement. We
will reimburse brokers or other nominees for reasonable expenses they incur in
forwarding this material to beneficial owners. The actions in the
Written Consent and the director and officer appointment will take effect on or
shortly after [20 days after the mailing of the Definitive Information
Statement].
1
SHAREHOLDERS’
WRITTEN CONSENT
IN
LIEU OF SPECIAL MEETING OF
TAPIMMUNE
INC.
INFORMATION
ON CONSENTING SHAREHOLDERS
Pursuant
to our Bylaws and the Nevada Revised Statutes, a vote by the holders of at least
a majority of our outstanding capital stock is required to effect the actions
described herein. As of the Record Date, we had 38,361,674 shares entitled
to vote on the matters set forth herein of which 19,180,837 shares are required
to pass any shareholder resolutions. The majority shareholders, who consist of
nine of our current shareholders, are collectively the record and beneficial
owners of 21,331,209 of our shares of common stock, which represents 55.6% of
the issued and outstanding shares of our common stock on a fully diluted basis.
Pursuant to 78.320 of the Nevada Revised Statutes, the majority shareholders
voted in favor of the actions described herein in a Written Consent, dated
December 28, 2009. There are no cumulative voting rights. No consideration
was paid for the consent.
NOTICE
TO SHAREHOLDERS OF ACTION APPROVED BY CONSENTING SHAREHOLDERS
The
following corporate action described in this Information Statement (i) was
approved by stockholders voting approximately 55.6% of our outstanding capital
stock entitled to vote, (ii) will become effective on or shortly after [the
twentieth day following the filing of the Definitive Information Statement],
(iii) will not result in any appraisal or dissenters’ rights and (iv) may be
abandoned by our Board of Directors prior to effectiveness without any further
vote of our shareholders.
ACTION
I
AMENDMENT
TO ARTICLES OF INCORPORATION
The
majority shareholders and the Board of Directors have approved an amendment to
our Articles of Incorporation, attached hereto as Exhibit A, to increase the
number of authorized shares of capital stock from 55,000,000 to
155,000,000. Our current Articles of Incorporation authorizes
50,000,000 shares of common stock, and the amendment to our Articles of
Incorporation would authorize 150,000,000 shares of common stock. Our current
Articles of Incorporation authorizes 5,000,000 shares of preferred stock, and
the amendment to our Articles of Incorporation would continue to authorize the
same amount of preferred stock.
The
relative rights and limitations of the shares of common stock would remain
unchanged by the amendment to our Articles of Incorporation.
REASON
FOR, AND THE EFFECT OF, THE INCREASE IN AUTHORIZED COMMON STOCK
Our
management has approved the corporate actions described in this Information
Statement in an attempt to allow us to raise additional capital. We
currently have 50,000,000 authorized shares of common stock, of which 38,361,674
are outstanding and over 6,000,000 of which are reserved for issuance upon
the exercise of warrants and options or the conversion of debt. Our
management believes that to successfully raise additional capital through equity
financing or convertible debt, we will need to have more authorized but unissued
and unreserved shares than the under 6,000,000 that are currently authorized but
unissued or reserved. Our management has yet to enter into any
arrangements by which it would raise additional capital through an equity or
convertible debt issuance that would result in us committing to issue or reserve
shares of our common stock that would cause us to exceed our current authorized
share capital.
As a
result of increasing our authorized common stock, we will be in a better
position to raise additional capital. Any raise of additional capital
may have the effect of diluting your percentage ownership of our Company and,
depending on the issuance price, the net tangible book value per share of the
shares that you purchased.
2
ACTION
II
ADOPTION
OF 2009 STOCK INCENTIVE PLAN
The
majority shareholders and the Board of Directors have approved a plan that will
enable us to grant equity and equity-linked awards to our directors, officers,
employees and consultants. This plan is called the "2009 Stock Incentive Plan".
The Plan is intended to allow us to provide incentives that will (i) strengthen
the desire of highly competent persons to serve as directors, officers and
employees of our Company and (ii) further stimulate their efforts on behalf of
our Company.
ADDITIONAL
INFORMATION CONCERNING THE 2009 STOCK INCENTIVE PLAN
We have
summarized below certain key provisions of the 2009 Stock Incentive Plan. This
summary may not contain all the information that is important to you. You should
review the entire Plan, a
copy of the Plan is included as Exhibit B.
Shares
Available
The
maximum number of shares of our common stock that may be delivered under the
Plan is 10,000,000 subject to adjustment for certain specified changes to our
capital structure. Some awards under the Plan may link future payments to the
awardee to the future value of a specified number of shares of our common stock.
The number of shares used for reference purposes in connection with these awards
will be considered "delivered" for purposes of computing the maximum number of
shares that may be delivered under the Plan. If an award under the Plan
terminates without the shares subject thereto being delivered, the shares
subject to such award will thereafter be available for further awards under the
Plan.
Eligibility
All
directors, officers and employees of, and consultants to, our Company are
eligible to participate in the Plan.
Administration
The
administrator of the Plan will be the Board or any committee which the Board
designates to serve as the administrator of the Plan. The Board or designated
committee serving as administrator (the "Administrator") will, among other
things, have the authority to (i) construe the Plan and any award under the
Plan, (ii) select the directors, officers, employees and consultants to whom
awards may be granted and the time or times at which awards will be granted.
(iii) determine the number of shares of our common stock to be covered by or
used for reference purposes for any award, (iv) determine and modify from time
to time the terms, conditions, and restrictions of any award, (v) approve the
form of written instrument evidencing any award, (vi) accelerate or otherwise
change the time or times at which an award becomes vested or when an award may
be exercised or becomes payable, (vii) waive, in whole or in part, any
restriction or condition with respect to any award and (viii) modify, extend or
renew outstanding awards, or accept the surrender of outstanding awards and
substitute new awards.
The
Administrator has not yet made any awards under the Plan. Because the granting
of awards is in the sole discretion of the Administrator, the nature and
magnitude of future awards cannot currently be determined.
Types
of Awards
The types
of awards that may be made under the Plan are shares, options, stock
appreciation rights, restricted stock awards, stock units and dividend
equivalent rights. The Administrator will fix the terms of each award,
including, to the extent relevant, the following: (1) exercise price for
options, base price for stock appreciation rights, and purchase price, if any,
for restricted stock awards, (2) vesting requirements and other conditions to
exercise, (3) term and termination, (4) effect, if any, of change of control and
(5) method of exercise and of any required payment by the recipient. Additional
information concerning the types of awards that may be made is set forth
below.
3
Stock Options. The
Administrator may grant options that are qualified as "incentive stock options"
under Section 422 of the Internal Revenue Code ("ISOs") and options that are not
so qualified ("non-qualified options"). ISOs are subject to certain special
limitations, including the following: (1) the exercise price per share may not
be less than 100% of the fair market value per share of our common stock as of
the grant date (110% of such fair market value, if the
recipient owns more than 10% of the total combined voting power of all classes
of our outstanding shares), (2) the term may not exceed 10 years, and (3) the
recipient must be an employee of our Company.
Stock Appreciation Rights. A
stock appreciation right gives the holder the opportunity to benefit from the
appreciation of our common stock over a specified base price determined by the
Administrator. Upon exercise of a stock appreciation right, the holder has the
right to receive in respect of each share subject thereto a payment equal to the
excess, if any, of: (1) the fair market value of a share of our common stock as
of the exercise date over (2) the specified base price. At the discretion of the
Administrator, any required payment may be made in cash, shares of our common
stock, or both.
Restricted Stock Awards. A
restricted stock award entitles the recipient to acquire shares of our common
stock for no consideration or for the consideration specified by the
Administrator. The shares will be subject to such vesting periods and other
restrictions and conditions as the Administrator determines.
Stock Units. A stock unit is
a bookkeeping account to which there is credited the fair market value of a
share of our common stock. The value of the account is subsequently adjusted to
reflect changes in the fair market value. Upon exercise of a stock unit, the
holder is entitled to receive the value of the account. At the discretion of the
Administrator, any required payment may be made in cash, shares of our common
stock, or both.
Dividend Equivalent Rights. A
dividend equivalent right is an Award entitling the recipient to receive credits
based on cash distributions that would have been paid on common shares specified
in the dividend equivalent right (or other award to which it relates) if such
shares had been issued to and held by the recipient. The Administrator may
grant a dividend equivalent right as a component of another Award or as a
freestanding Award and it shall specify the terms in such grant.
Certain
Corporate Transactions
If
certain corporate transactions specified in the Plan occur, the Administrator
may make appropriate or equitable adjustments to the Plan and Awards, including
(1) the number of shares of stock that can be granted, (2) the number and kind
of shares or other securities subject to any then outstanding awards and (3) the
exercise price, base price, or purchase price applicable to outstanding Awards
under the Plan.
The
Administrator may cancel outstanding awards, but not outstanding stock or
restricted stock awards, in connection with any merger or consolidation of our
Company or any sale or transfer of all or part of our assets or business, or any
similar event. The Administrator may determine to make no compensation
whatsoever for any canceled awards that are not in-the-money (as defined below)
or for any canceled awards to the extent not vested. We are required to provide
payment in cash or other property for the in-the-money value of the vested
portion of awards that are in-the-money and that are canceled as aforesaid.
Awards are in-the-money only to the extent of their then realizable market
value, without taking into account the potential future increase in the value of
the award (whether under Black-Scholes-type formulas or otherwise).
Amendment
The board
may amend the Plan at any time and from time to time, provided that (1) no
amendment may deprive any person of any rights granted under the Plan before the
effective date of such amendment, without such person's consent; and (2)
amendments may be subject to shareholder approval to the extent needed to comply
with applicable law and stock exchange requirements.
4
Term
of Plan
No award
may be granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan. However, all
awards made prior to such time will remain in effect in accordance
with their terms.
Certain
Federal Income Tax Considerations
Matters
Relating to Section 162(m) of the Internal Revenue Code
Under
Section 162(m) of the Internal Revenue Code, we are generally precluded from
deducting compensation in excess of $1 million per year paid to our chief
executive officer and our next four highest paid executive officers. For
purposes of this limitation, there is excluded from compensation any payments
that an executive receives under performance-based plans that meet certain
requirements specified by the Internal Revenue Code. The Plan does not
qualify as a performance-based plan and, accordingly, compensation realized in
respect of awards will be subject to the Section 162(m) limitation.
Consequently, the granting of awards under the Plan, either alone or in
conjunction with other compensation, could cause us to have non-deductible
compensation expense.
Matters
Relating to Change of Control
The
Administrator may provide that the vesting of an award be accelerated upon a
change of control. In such event, all or a portion of the relevant award may be
deemed a "parachute payment." Under provisions of the Internal Revenue Code, (1)
the recipient of an "excess parachute payments" (as defined in Section 280G of
the Internal Revenue Code) would be required to pay a 20% excise tax thereon (in
addition to income tax otherwise owed) and (2) the "excess parachute payment"
would not be deductible to our Company. If any of our executive officers is
required to pay such an excise tax, we will be required to pay the executive an
amount that is sufficient on an after-tax basis to offset such
payment.
Non-Qualified
Options. No income will be recognized by a participant upon the grant of a
non-qualified option. Upon exercise, the participant will generally have
ordinary income in the amount equal to the excess of the fair market value of
the shares acquired over the exercise price. The income recognized by an
employee participant will be subject to tax withholding. Upon a later sale of
such shares, the participant will have capital gain or loss in an amount equal
to the difference between the amount realized on such sale and the tax basis of
the shares sold. We will be entitled to a tax deduction in the same amount as
the ordinary income recognized by the participant with respect to shares
acquired upon exercise of the non-qualified option.
Incentive
Stock Options. No income will be recognized by a participant upon the grant of
an incentive stock option. Further, the participant will recognize no income at
the time of exercise (although a participant may have income for purposes of
alternative minimum tax calculations) and we will not be allowed a deduction for
federal income tax purposes in connection with the grant or exercise of an
option. If the participant holds the acquired shares two years from the date of
grant and one year from the date of exercise the entire gain (or loss) realized
when the participant eventually disposes of the stock is treated as long term
capital gain (or loss). If the shares are disposed of before such holding period
requirements are satisfied, the participant will recognize ordinary income in an
amount equal to the lesser of the difference between (1) the exercise price and
the fair market value of the shares on the date of exercise or (2) the exercise
price and the sales proceeds. Any remaining gain or loss will be treated as
capital gain or loss. We will be entitled to a federal income tax deduction
equal to the amount of ordinary income recognized by the
participant.
5
INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Upon the
adoption of the Plan, we intend to use the Plan to compensate our directors,
officers, employees and consultants with equity compensation. However, there is
no current agreement or obligation obligating us to provide equity compensation
and no determination has yet been made regarding potential equity compensation
grants.
REASON
FOR, AND THE EFFECT OF, THE ADOPTION OF THE 2009 STOCK INCENTIVE
PLAN
We depend
on our key employees. Due to the specialized nature of our business and
the biotech industry in general, our success depends upon our ability to attract
and retain qualified scientific and executive personnel. We will
implement the 2009 Stock Incentive Plan to entice potential management
candidates and to encourage those working for us to remain in those
positions. We believe that the 2007 Stock Option Plan alone is no
longer sufficient to meet these goals. If the awards under the 2009 Stock
Incentive Plan are granted, your ownership interest in our Company and the value
of your common stock could be diluted.
ACTION
III
REDUCTION
OF EXERCISE PRICE OF OPTIONS ISSUED UNDER 2007 STOCK INCENTIVE PLAN
The
majority shareholders and the Board of Directors have approved a reduction in
the exercise price of the options granted under our 2007 Stock Incentive Plan
from $2.50 per common share to $0.97 per common share, the closing price of the
common shares on the Over-the-Counter Bulletin Board on the date of the Board of
Directors resolution approving the amendment.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The
following table sets forth the compensation paid to our Principal Executive
Officer during our fiscal years ended December 31, 2008 and December 31,
2007:
Summary
Compensation Table
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
All
Other
Compen-sation
($)
|
Total
($)
|
|
Denis
Corin
President,
CEO(1)
|
2008
2007
|
132,000
102,546
|
Nil
40,000
|
Nil
Nil
|
Nil
120,000
|
Nil
Nil
|
133,332
262,546
|
(1) Denis Corin resigned as our Chief
Executive Officer on July 1, 2009, but remains as our President. His
resignation as our Chief Executive Officer has not affected his compensation
levels.
The
amounts represent fees paid or accrued by us to the Principal Executive Officer
during the past year pursuant to various employment and consulting services
agreements, as between us and the Principal Executive Officer, which is
described below. Our Principal Executive Officer is also reimbursed
for any out-of-pocket expenses incurred by him in connection with his
duties. We presently have no pension, health, annuity, insurance,
profit sharing or similar benefit plans.
The
following table sets forth information as at December 31, 2008 relating to
outstanding equity awards for our Chief Executive Officer:
Outstanding
Equity Awards at Year End Table
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(exercisable)
|
Number
of
Securities
Underlying
Unexercised
Options
(unexercisable)
|
Number
of
Securities
Underlying
Unexercised
Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|
Denis
Corin
President,
CEO (1)
|
80,000
|
Nil
|
Nil
|
$2.50
(2)
|
06/08/17
|
(1) Denis Corin resigned as our Chief
Executive Officer on July 1, 2009, but remains as our President. His
resignation as our Chief Executive Officer has not affected his compensation
levels.
(2) To be
reduced to $0.97 upon effectiveness of this action.
6
The
following table sets forth information relating to compensation paid to our
directors in the fiscal year ended December 31, 2008:
Director
Compensation Table
|
Name
|
Year
|
Fees
Earned
or
Paid
in
Cash
|
Stock
Awards
($)
|
Option
Awards
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|
Alan
P. Lindsay (1)
|
2008
2007
|
100,000
99,997
|
Nil
Nil
|
Nil
168,000
|
Nil
Nil
|
100,000
267,997
|
|
Glynn
Wilson
|
2008
2007
|
42,000
10,500
|
Nil
Nil
|
Nil
76,000
|
Nil
Nil
|
42,000
86,500
|
|
Patrick
A. McGowan (1)
|
2008
2007
|
34,162
33,589
|
Nil
Nil
|
Nil
76,000
|
Nil
Nil
|
34,162
109,589
|
(1)
Resigned as one of our directors on July 1, 2009.
Corin
Executive Services Agreements
On
November 17, 2006, our Board of Directors, in consultation with our Compensation
Committee, completed an executive services agreement with Denis Corin, our
President. The terms of the agreement, as determined by our
Compensation Committee, provides for, among other matters, the provision for
monthly consulting fees of approximately $4,300 (CAN$5,000) during an
eight-month initial term, and the granting of an aggregate of not less than
40,000 stock options to acquire a similar number of our common shares at an
exercise price of $2.50 per common share for a period of not less than five
years from the date of grant, an exercise price which would be reduced $0.97 per
common share upon the effectiveness of the actions described
herein.
On June
30, 2007, with an effective date of May 1, 2007, our Board of Directors approved
an amended executive services agreement with Mr. Corin with a one year
term. The amended agreement, provides for an increase in the month
consulting fees to $10,000 USD per month through the term of the agreement, and
an increase providing for the granting of an aggregate of not less than 80,000
stock options to acquire a similar number of our common shares at an exercise
price of $2.50 per common share for a period of not less than five years from
the date of grant, an exercise price which would be reduced $0.97 per common
share upon the effectiveness of the actions described herein.
Compensation
Committee
Our
compensation committee is comprised of our three directors. All
compensation is recommended and resolved by the compensation committee and board
of directors.
REASON
FOR, AND THE EFFECT OF, THE DECREASE IN EXERCISE PRICE
We depend
on our key employees. Due to the specialized nature of our business
and the biotech industry in general, our success depends upon our ability to
attract and retain qualified scientific and executive personnel. We
established the 2007 Stock Incentive Plan to entice potential management
candidates and to encourage those working for us to remain in those
positions. We believe that the current exercise price of $2.50 under
the plan is no longer sufficient to meet these goals as our share price has been
significantly below the exercise price for some time and that the new exercise
price of $0.97 will help us achieve the initial purpose of the 2007 Stock
Incentive Plan.
7
INTEREST
OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON
Except as
set out below, none of the following persons has any substantial interest,
direct or indirect, by security holdings or otherwise in any matter to be acted
upon: (i) any director or officer of our Company, (ii) any proposed nominee
for election as a director of our Company and (iii) any associate of affiliate
of any of the foregoing persons. No director has advised that he
intends to oppose any of the actions set out in this Information
Statement.
Our
director, Denis Corin, has a substantial interest in the corporate action to
reduce the exercise price of the options granted under the 2007 Stock Option
Plan. As of the date hereof, Mr. Corin has a beneficial interest in
100,000 vested options exercisable at $2.50 and Glynn Wilson has 40,000 vested
options exercisable at $2.50. Upon the effectiveness of this
corporate action, the exercise price on Mr. Corin’s and Mr. Wilson’s vested
options will be reduced to $0.97.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of December 31, 2009, certain information with
respect to the beneficial ownership of our 38,361,674 shares of outstanding
common stock by each stockholder known by us to be the beneficial owner of more
than 5% of our common stock and by each of our current directors, our chief
executive officer and our four most highly compensated executive officers (other
than our chief executive officer) as at December 31, 2008. Each person has sole
voting and investment power with respect to the shares of common stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of common stock, except as otherwise indicated.
|
Title
of Class
|
Name
of Beneficial Owner
|
Shares
of Common Stock
|
Percent
of Class
|
|
|
Common
|
Denis
Corin (1)
|
2,231,450
|
5.8%
|
|
|
Common
|
Tracy
A. Moore
|
50,000
|
0.1%
|
|
|
Common
|
Glynn
Wilson
|
900,000
|
2.3%
|
|
|
Common
|
Patrick
Kephart (2)
|
2,318,830
|
6.0%
|
|
|
Common
|
Alan
Lindsay (3)
|
2,282,880
|
5.9%
|
|
|
Common
|
New
Paradigm Capital
|
4,077,100
|
10.6%
|
|
|
Common
|
Michelle
Stannard
|
2,496,892
|
6.5%
|
|
|
Common
|
Steven
Sanders
|
2,185,283
|
5.7%
|
|
|
Common
|
Douglas
Brown
|
2,606,345
|
6.8%
|
|
|
Common
|
St.
George Trust Company Ltd.
|
5,335,640
|
13.9%
|
|
|
Directors
and Officers as a group
|
3,131,450
|
8.2%
|
(1) Includes
shares held by Lee-Anne Corin, the spouse of Denis Corin.
(2) Includes
shares held by KEPFAM Holdings LLLP.
(3) Includes
shares held by Alan Lindsay & Associates.
ADDITIONAL
AVAILABLE INFORMATION
We are
subject to the information and reporting requirements of the Securities Exchange
Act of 1934, and in accordance with such Act we file periodic reports, documents
and other information with the Securities and Exchange Commission relating to
our business, financial statements and other matters, such reports and other
information may be inspected and are available for copying at the offices of the
Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549
or may be accessed at www.sec.gov.
8
EXHIBIT
A
CERTIFICATE
OF AMENDMENT TO ARTICLES OF INCORPORATION
FOR
NEVADA PROFIT CORPORATIONS
(PURSUANT
TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK)
1. Name
of corporation: TapImmune Inc.
2. The
articles have been amended as follows (provide article numbers, if
available):
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3: The
number of authorized shares with a par value of $0.001 per share is
150,000,000 common shares and 5,000,000 preferred
shares.
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3. The
vote by which the shareholders holding shares in the corporation entitling them
to exercise at least a majority of the voting power, or such greater proportion
of the voting power as may be required in the case of a vote by classes or
series, or as may be required by the provisions of the articles of incorporation
have voted in favor of the amendment is: 21,331,209 of
38,361,674 shares outstanding (55.6%).
4.
Effective date of filing (optional):
- --------------------------------------------------------
5.
Officer Signature (required):
- ------------------------------------------------
EXHIBIT
B
TAPIMMUNE
INC.
2009
STOCK INCENTIVE PLAN
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1.
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PURPOSE
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1.1 The
purpose of this Stock Incentive Plan (the “Plan”) is to advance the
interests of TapImmune Inc. (the “Company”) by encouraging
Eligible Participants (as herein defined) to acquire shares of the Company,
thereby increasing their proprietary interest in the Company, encouraging them
to remain associated with the Company and furnish them with additional incentive
in their efforts on behalf of the Company in the conduct of their
affairs.
1.2 This
Plan is specifically designed for Eligible Participants of the Company who are
residents of the United States and/or subject to taxation in the United States,
although Awards (as herein defined) under this Plan may be issued to other
Eligible Participants.
1.3 This
Plan supersedes and replaces, in its entirety, the Company’s existing 2007 Stock
Incentive Plan, dated as originally ratified by the Board of Directors of the
Company on June 8, 2007, except that any “Awards” theretofore granted by the
Company under its 2007 Stock Incentive Plan are necessarily brought forward by
the Company and covered now by the terms and conditions of this
Plan.
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2.
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DEFINITIONS
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2.1 As
used herein, the following definitions shall apply:
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(a)
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“Administrator” means the
Committee or otherwise the Board;
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(b)
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“Affiliate” and “Associate” have the
meanings ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act;
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(c)
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“Applicable Laws” means
the legal requirements relating to the administration of stock incentive
plans, if any, under applicable provisions of federal securities laws,
state corporate laws, state or provincial securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the
rules of any foreign jurisdiction applicable to Awards granted to
residents therein;
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(d)
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“Award” means the grant
of an Option, SAR, Restricted Stock, unrestricted Shares, Restricted Stock
Unit, Deferred Stock Unit or other right or benefit under this
Plan;
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(e)
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“Award Agreement” means
the written agreement evidencing the grant of an Award executed by the
Company and the Grantee, including any amendments
thereto;
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(f)
“Award Right” means each
right to acquire a Share pursuant to an Award;
(g) “Board” means the Board of
Directors of the Company;
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(h)
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“Cause” means, with
respect to the termination by the Company or a Related Entity of the
Grantee’s Continuous Service, that such termination is for “Cause” as such
term is expressly defined in a then-effective written agreement between
the Grantee and the Company or such Related Entity, or in the absence of
such then-effective written agreement and definition, is based on, in the
determination of the Administrator, the
Grantee’s:
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(i)
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refusal
or failure to act in accordance with any specific, lawful direction or
order of the Company or a Related
Entity;
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(ii)
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unfitness
or unavailability for service or unsatisfactory performance (other than as
a result of Disability);
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(iii)
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performance
of any act or failure to perform any act in bad faith and to the detriment
of the Company or a Related Entity;
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(iv)
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dishonesty,
intentional misconduct or material breach of any agreement with the
Company or a Related Entity; or
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(v)
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commission
of a crime involving dishonesty, breach of trust, or physical or emotional
harm to any person;
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B-1
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(i)
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“Change of Control”
means, except as provided below, a change in ownership or control of the
Company effected through any of the following
transactions:
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(i)
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the
direct or indirect acquisition by any person or related group of persons
(other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with,
the Company) of beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act) of securities possessing more than 50% of the total
combined voting power of the Company’s outstanding securities pursuant to
a tender or exchange offer made directly to the Company’s shareholders
which a majority of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such shareholders
accept;
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(ii)
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a
change in the composition of the Board over a period of 36 months or less
such that a majority of the Board members (rounded up to the next whole
number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who are Continuing
Directors;
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(iii)
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the
sale or exchange by the Company (in one or a series of transactions) of
all or substantially all of its assets to any other person or entity;
or
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(iv)
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approval
by the shareholders of the Company of a plan to dissolve and liquidate the
Company.
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Notwithstanding
the foregoing, the following transactions shall not constitute a “Change of
Control”:
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(i)
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the
closing of any public offering of the Company’s securities pursuant to an
effective registration statement filed under the United States Securities Act of 1933,
as amended;
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(ii)
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the
closing of a public offering of the Company’s securities through the
facilities of any stock exchange;
or
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(iii)
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with
respect to an Award that is subject to Section 409A of the Code, and
payment or settlement of such Award is to be accelerated in connection
with an event that would otherwise constitute a Change of Control, no
event set forth previously in this definition shall constitute a Change of
Control for purposes of this Plan or any Award Agreement unless such event
also constitutes a “change in the
ownership”, a “change in the effective
control” or a “change in the ownership of a
substantial portion of the assets of the corporation” as defined
under Section 409A of the Code and Treasury guidance formulated
thereunder, which guidance currently provides
that:
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(A)
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a
change in ownership of a corporation shall be deemed to have occurred if
any one person or more than one person acting as a group acquires stock of
a corporation that constitutes more than 50% of the total Fair Market
Value or total voting power of the stock of the corporation. Stock
acquired by any person or group of people who already owns more than 50%
of such total Fair Market Value or total voting power of stock shall not
trigger a change in ownership;
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(B)
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a
change in the effective control of a corporation generally shall be deemed
to have occurred if within a 12-month period
either:
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(I)
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any
one person or more than one person acting as a group acquires ownership of
stock possessing 35% or more of the total voting power of the stock of the
corporation; or
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(II)
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a
majority of the members of the corporation’s board of directors is
replaced by directors whose appointment or election is not endorsed by a
majority of the members of the corporation’s board of directors prior to
the date of the appointment or election;
and
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(C)
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a
change in the ownership of a substantial portion of the corporation’s
assets generally is deemed to occur if within a 12-month period any
person, or more than one person acting as a group, acquires assets from
the corporation that have a total gross fair market value at least equal
to 40% of the total gross fair market value of all the corporation’s
assets immediately prior to such acquisition. The gross fair
market value of assets is determined without regard to any
liabilities;
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(j)
“Code” means the United
States Internal Revenue Code
of 1986, as amended;
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(k)
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“Committee” means the
Compensation Committee or any other committee appointed by the Board to
administer this Plan in accordance with the provisions of this Plan;
provided, however, that:
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(i)
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the
Committee shall consist of two or more members of the
Board;
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(ii)
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the
directors appointed to serve on the Committee shall be “non-employee directors”
(within the meaning of Rule 16b-3 promulgated under the Exchange Act) and
“outside
directors” (within the meaning of Section 162(m) of the Code) to
the extent that Rule 16b-3 and, if necessary for relief from the
limitation under Section 162(m) of the Code and such relief is sought by
the Company, Section 162(m) of the Code, respectively, are
applicable;
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(iii)
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the mere fact that a Committee member shall fail to qualify under
either of the foregoing requirements set forth in Section 2.1(k)(ii) shall
not invalidate any Award made by the Committee which Award is otherwise
validly made under the Plan; and
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(iv)
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members
of the Committee may be appointed from time to time by, and shall serve at
the pleasure of, the Board;
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B-2
(l)
“Common Stock” means the
common stock of the Company;
(m) “Company” means TapImmune Inc.,
a Nevada corporation;
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(n)
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“Consultant” means any
person (other than an Employee) who is engaged by the Company or any
Related Entity to render consulting or advisory services to the Company or
such Related Entity;
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(o)
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“Continuing Directors”
means members of the Board who either (i) have been Board members
continuously for a period of at least 36 months, or (ii) have been Board
members for less than 36 months and were appointed or nominated for
election as Board members by at least a majority of the Board members
described in clause (i) who were still in office at the time such
appointment or nomination was approved by the
Board;
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(p)
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“Continuous Service”
means that the provision of services to the Company or a Related Entity in
any capacity of Employee, Director or Consultant that is not interrupted
or terminated. Continuous Service shall not be considered interrupted in
the case of (i) any approved leave of absence, (ii) transfers between
locations of the Company or among the Company, any Related Entity, or any
successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of
the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An
approved leave of absence shall include sick leave, maternity or paternity
leave, military leave, or any other authorized personal leave. For
purposes of Incentive Stock Options, no such leave may exceed 90 calendar
days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract;
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(q) “Corporate Transaction” means
any of the following transactions:
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(i)
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a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the
jurisdiction in which the Company is
organized;
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(ii)
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the
sale, transfer or other disposition of all or substantially all of the
assets of the Company (including the capital stock of the Company’s
subsidiary corporations) in connection with the complete liquidation or
dissolution of the Company; or
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(iii)
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any
reverse merger in which the Company is the surviving entity but in which
securities possessing more than 50% of the total combined voting power of
the Company’s outstanding securities are transferred to a person or
persons different from those who held such securities immediately prior to
such merger;
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(r)
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“Covered Employee” means
an Employee who is a “covered employee” under
Section 162(m)(3) of the Code;
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(s)
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“Deferred Stock Units”
means Awards that are granted to Directors and are subject to the
additional provisions set out in Subpart A which is attached hereto and
which forms a material part hereof;
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(t)
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“Director” means a member
of the Board or the board of directors of any Related
Entity;
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(u)
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“Disability” or “Disabled” means that a
Grantee is unable to carry out the responsibilities and functions of the
position held by the Grantee by reason of any medically determinable
physical or mental impairment. A Grantee shall not be
considered to have incurred a Disability unless he or she furnishes proof
of such impairment sufficient to satisfy the Administrator in its
discretion. Notwithstanding the above, (i) with respect to an
Incentive Stock Option, Disability or Disabled shall mean permanent and
total disability as defined in Section 22(e)(3) of the Code and (ii) to
the extent an Option is subject to Section 409A of the Code, and payment
or settlement of the Option is to be accelerated solely as a result of the
Eligible Participant’s Disability, Disability shall have the meaning
ascribed thereto under Section 409A of the Code and the Treasury guidance
promulgated thereunder;
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(v)
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“Disinterested Shareholder
Approval” means approval by a majority of the votes cast by all the
Company’s shareholders at a duly constituted shareholders’ meeting,
excluding votes attached to shares beneficially owned by
Insiders;
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(w)
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“Eligible Participant”
means any person who is an Officer, a Director, an Employee or a
Consultant, including individuals who are foreign nationals or are
employed or reside outside the United
States;
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(x)
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“Employee” means any
person who is a full-time or part-time employee of the Company or any
Related Entity;
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(y)
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“Exchange Act” means the
United States Securities
Exchange Act of 1934, as
amended;
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B-3
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(z)
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“Fair Market Value”
means, as of any date, the value of a Share determined in good faith by
the Administrator. By way of illustration, but not limitation,
for the purpose of this definition, good faith shall be met if the
Administrator employs the following
methods:
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(i)
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Listed Stock.
If the Common Stock is traded on any established stock exchange or quoted
on a national market system, Fair Market Value shall be (A) the closing
sales price for the Common Stock as quoted on that stock exchange or
system for the date the value is to be determined (the “Value Date”) as reported
in The Wall Street Journal or a similar publication, or (B) if the rules
of the applicable stock exchange require, the volume-weighted average
trading price for five days prior to the date the Board approves the grant
of the Award. If no sales are reported as having occurred on
the Value Date, Fair Market Value shall be that closing sales price for
the last preceding trading day on which sales of Common Stock is reported
as having occurred. If no sales are reported as having occurred
during the five trading days before the Value Date, Fair Market Value
shall be the closing bid for Common Stock on the Value Date. If
the Common Stock is listed on multiple exchanges or systems, Fair Market
Value shall be based on sales or bids on the primary exchange or system on
which Common Stock is traded or quoted. If the rules of any
applicable stock exchange or system require a different method of
calculating Fair Market Value, then such method as is required by those
rules;
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(ii)
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Stock Quoted by
Securities Dealer. If Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported on any
established stock exchange or quoted on a national market system, Fair
Market Value shall be the mean between the high bid and low asked prices
on the Value Date. If no prices are quoted for the Value Date,
Fair Market Value shall be the mean between the high bid and low asked
prices on the last preceding trading day on which any bid and asked prices
were quoted;
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(iii)
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No Established
Market. If Common Stock is not traded on any established stock
exchange or quoted on a national market system and is not quoted by a
recognized securities dealer, the Administrator will determine Fair Market
Value in good faith. The Administrator will consider the
following factors, and any others it considers significant, in determining
Fair Market Value: (A) the price at which other securities of the Company
have been issued to purchasers other than Employees, Directors, or
Consultants; (B) the Company’s net worth, prospective earning power,
dividend-paying capacity, and non-operating assets, if any; and (C) any
other relevant factors, including the economic outlook for the Company and
the Company’s industry, the Company’s position in that industry, the
Company’s goodwill and other intellectual property, and the values of
securities of other businesses in the same
industry;
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(iv)
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Additional
Valuation. For publicly traded companies, any valuation
method permitted under Section 20.2031-2 of the Estate Tax Regulations;
or
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(v)
|
Non-Publicly Traded
Stock. For non-publicly traded stock, the Fair Market
Value of the Common Stock at the Grant Date based on an average of the
Fair Market Values as of such date set forth in the opinions of completely
independent and well-qualified experts (the Participant’s status as a
majority or minority shareholder may be taken into
consideration).
|
Regardless
of whether the Common Stock offered under the Award is publicly traded, a good
faith attempt under this definition shall not be met unless the Fair Market
Value of the Common Stock on the Grant Date is determined with regard to
nonlapse restrictions (as defined in Section 1.83-3(h) of the Treasury
Regulations) and without regard to lapse restrictions (as defined in Section
1.83-3(i) of the Treasury Regulations);
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(aa)
|
“Grantee” means an
Eligible Participant who receives an Award pursuant to an Award
Agreement;
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(bb)
|
“Grant Date” means the
date the Administrator approves that grant of an
Award. However, if the Administrator specifies that an Award’s
Grant Date is a future date or the date on which a condition is satisfied,
the Grant Date for such Award is that future date or the date that the
condition is satisfied;
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(cc)
|
“Incentive Stock Option”
means an Option within the meaning of Section 422 of the
Code;
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(dd) “Insider” means:
(i) a
Director or Senior Officer of the Company;
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|
(ii)
|
a
Director or Senior Officer of a person that is itself an Insider or
Subsidiary of the Company;
|
B-4
(iii) a
person that has
(A) direct
or indirect beneficial ownership of,
(B) control
or direction over, or
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|
(C)
|
a
combination of direct or indirect beneficial ownership of and control or
direction over,
|
securities
of the Company carrying more than 10% of the voting rights attached to all the
Company’s outstanding voting securities, excluding, for the purpose of the
calculation of the percentage held, any securities held by the person as
underwriter in the course of a distribution; or
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(iv)
|
the
Company itself, if it has purchased, redeemed or otherwise acquired any
securities of its own issue, for so long as it continues to hold those
securities;
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(ee)
|
“Named Executive Officer”
means, if applicable, an Eligible Participant who, as of the date of
vesting and/or payout of an Award, is one of the group of Covered
Employees as defined;
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(ff)
|
“Non-Qualified Stock
Option” means an Option which is not an Incentive Stock
Option;
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(gg)
|
“Officer” means a person
who is an officer, including a Senior Officer, of the Company or a Related
Entity within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated
thereunder;
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(hh)
|
“Option” means an option
to purchase Shares pursuant to an Award Agreement granted under the
Plan;
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(ii)
|
“Parent” means a “parent
corporation”, whether now or hereafter existing, as defined in Section
424(e) of the Code;
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(jj)
|
“Performance-Based
Compensation” means compensation qualifying as “performance-based
compensation” under Section 162(m) of the
Code;
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(kk) “Plan” means this 2009 Stock
Incentive Plan as amended from time to time;
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(ll)
|
“Related Entity” means
any Parent or Subsidiary, and includes any business, corporation,
partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a greater than 50% ownership
interest, directly or indirectly;
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(mm)
|
“Related Entity
Disposition” means the sale, distribution or other disposition by
the Company of all or substantially all of the Company’s interests in any
Related Entity effected by a sale, merger or consolidation or other
transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related
Entity;
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(nn)
|
“Restricted Stock” means
Shares issued under the Plan to the Grantee for such consideration, if
any, and subject to such restrictions on transfer, rights of first
refusal, repurchase provisions, forfeiture provisions, and other terms and
conditions as, established by the Administrator and specified in the
related Award Agreement;
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(oo)
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“Restricted Stock Unit”
means a notional account established pursuant to an Award granted to a
Grantee, as described in this Plan, that is (i) valued solely by reference
to Shares, (ii) subject to restrictions specified in the Award Agreement,
and (iii) payable only in Shares;
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(pp)
|
“Restriction Period”
means the period during which the transfer of Shares of Restricted Stock
is limited in some way (based on the passage of time, the achievement of
performance objectives, or the occurrence of other events as determined by
the Administrator, in its sole discretion) or the Restricted Stock is not
vested;
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(qq)
|
“SAR” means a stock
appreciation right entitling the Grantee to Shares or cash compensation,
as established by the Administrator, measured by appreciation in the value
of Common Stock;
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(rr)
|
“SEC” means the United
States Securities Exchange
Commission;
|
B-5
(ss) “Senior Officer”
means:
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|
(i)
|
the
chair or vice chair of the Board, the president, the chief executive
officer, the chief financial officer, a vice-president, the secretary, the
treasurer or the general manager of the Company or a Related
Entity;
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(ii)
|
any
individual who performs functions for a person similar to those normally
performed by an individual occupying any office specified in Section
2.1(ss)(i) above; and
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(iii)
|
the
five highest paid employees of the Company or a Related Entity, including
any individual referred to in Section 2.1(ss)(i) or 2.1(ss)(ii) and
excluding a commissioned salesperson who does not act in a managerial
capacity;
|
(tt) “Share” means a share of the
Common Stock; and
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(uu)
|
“Subsidiary” means a
“subsidiary
corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code.
|
|
3.
|
STOCK SUBJECT TO THE
PLAN
|
Number of Shares
Available
|
3.1
|
(a)Subject
to the provisions of Section 18, the maximum aggregate number of Shares
which may be issued pursuant to all Awards (including Incentive Stock
Options) under this Plan is 10,000,000 (the “Maximum
Number”). See Section 29 for Reservation of
Shares.
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|
(b)
|
Shares
that have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance
under the Plan except that Shares (i) covered by an Award (or portion of
an Award) which is forfeited or cancelled, expires or is settled in cash,
or (ii) withheld to satisfy a Grantee’s minimum tax withholding
obligations, shall be deemed not to have been issued for purposes of
determining the Maximum Number of Shares which may be issued under the
Plan. Also, only the net numbers of Shares that are issued
pursuant to the exercise of an Award shall be counted against the Maximum
Number.
|
|
|
(c)
|
However,
in the event that prior to the Award’s cancellation, termination,
expiration, forfeiture or lapse, the holder of the Award at any time
received one or more elements of beneficial ownership pursuant to such
Award (as defined by the SEC, pursuant to any rule or interpretations
promulgated under Section 16 of the Exchange Act), the Shares subject to
such Award shall not again be made available for regrant under the
Plan.
|
Shares to
Insiders
3.2 Subject
to Section 15.1(b) and 15.1(c), no Insider of the Company is eligible to receive
an Award where:
(a) the
Insider is not a Director or Senior Officer of the Company;
|
|
(b)
|
any
Award, together with all of the Company’s other previously established or
proposed Awards under the Plan could result at any time
in:
|
|
|
(i)
|
the
number of Shares reserved for issuance pursuant to Options granted to
Insiders exceeding 50% of the outstanding issue of Common Stock;
or
|
|
|
(ii)
|
the
issuance to Insiders pursuant to the exercise of Options, within a one
year period of a number of Shares exceeding 50% of the outstanding issue
of the Common Stock;
|
provided,
however, that this restriction on the eligibility of Insiders to receive an
Award shall cease to apply if it is no longer required under any Applicable
Laws.
B-6
Limitations on
Award
3.3 Unless
and until the Administrator determines that an Award to a Grantee is not
designed to qualify as Performance-Based Compensation, the following limits (the
“Award Limits”) shall
apply to grants of Awards to Grantees subject to the Award Limits by Applicable
Laws under this Plan:
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|
(a)
|
Options and
SARs. Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 18), the
maximum number of Shares with respect to one or more Options and/or Stock
Appreciation Rights that may be granted during any one calendar year under
the Plan to any one Grantee shall be 5,000,000; all of which
may be granted as Incentive Stock Options);
and
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|
|
(b)
|
Other
Awards. The maximum aggregate grant with respect to
Awards of Restricted Stock, unrestricted Shares, Restricted Stock Units
and Deferred Stock Units (or used to provide a basis of measurement for or
to determine the value of Restricted Stock Units and Deferred Stock Units)
in any one calendar year to any one Grantee (determined on the date of
payment of settlement) shall be 5,000,000.
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4.
|
ADMINISTRATION
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Authority of Plan
Administrator
4.1 Authority
to control and manage the operation and administration of this Plan shall be
vested in the Administrator.
Powers of the
Administrator
4.2 Subject
to Applicable Laws and the provisions of the Plan or subplans hereof (including
any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the exclusive power and
authority, in its discretion:
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(a)
|
to
construe and interpret this Plan and any agreements defining the rights
and obligations of the Company and Grantees under this
Plan;
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(b)
|
to
select the Eligible Participants to whom Awards may be granted from time
to time hereunder;
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(c) to
determine whether and to what extent Awards are granted hereunder;
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(d)
|
to
determine the number of Shares or the amount of other consideration to be
covered by each Award granted
hereunder;
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(e)
|
to
approve forms of Award Agreements for use under the Plan, which need not
be identical for each Grantee;
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(f)
|
to
determine the terms and conditions of any Award granted under the Plan,
including, but not limited to, the exercise price, grant price or purchase
price based on the Fair Market Value of the same, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of the Award, and
acceleration or waivers thereof, based in each case on such considerations
as the Committee in its sole discretion determines that is not
inconsistent with any rule or regulation under any tax or securities laws
or includes an alternative right that does not disqualify an Incentive
Stock Option under applicable
regulations;
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|
(g)
|
to
amend the terms of any outstanding Award granted under the Plan, provided
that any amendment that would adversely affect the Grantee’s rights under
an existing Award shall not be made without the Grantee’s consent unless
as a result of a change in Applicable
Law;
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|
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(h)
|
to
suspend the right of a holder to exercise all or part of an Award for any
reason that the Administrator considers in the best interest of the
Company;
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(i)
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subject
to regulatory approval, amend or suspend the Plan, or revoke or alter any
action taken in connection therewith, except that no general amendment or
suspension of the Plan, shall, without the written consent of all
Grantees, alter or impair any Award granted under the Plan unless as a
result of a change in the Applicable
Law;
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(j)
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to
establish additional terms, conditions, rules or procedures to accommodate
the rules or laws of applicable foreign jurisdictions and to afford
Grantees favorable treatment under such laws; provided, however, that no
Award shall be granted under any such additional terms, conditions, rules
or procedures with terms or conditions which are inconsistent with the
provisions of the Plan;
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B-7
(k) to
further define the terms used in this Plan;
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|
(l)
|
to
correct any defect or supply any omission or reconcile any inconsistency
in this Plan or in any Award
Agreement;
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(m) to
provide for rights of refusal and/or repurchase rights;
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(n)
|
to
amend outstanding Award Agreements to provide for, among other things, any
change or modification which the Administrator could have provided for
upon the grant of an Award or in furtherance of the powers provided for
herein that does not disqualify an Incentive Stock Option under applicable
regulations unless the Grantee so
consents;
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(o)
|
to
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan; and
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(p)
|
to
take such other action, not inconsistent with the terms of the Plan, as
the Administrator deems
appropriate.
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Effect of Administrator’s
Decision
4.3 All
decisions, determinations and interpretations of the Administrator shall be
conclusive and binding on all persons. The Administrator shall not be
liable for any decision, action or omission respecting this Plan, or any Awards
granted or Shares sold under this Plan. In the event an Award is
granted in a manner inconsistent with the provisions of this Section 4, such
Award shall be presumptively valid as of its grant date to the extent permitted
by the Applicable Laws.
Action by
Committee
4.4 Except
as otherwise provided by committee charter or other similar corporate governance
documents, for purposes of administering the Plan, the following rules of
procedure shall govern the Committee. A majority of the Committee
shall constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and acts approved unanimously in writing
by the members of the Committee in lieu of a meeting, shall be deemed the acts
of the Committee. Each member of the Committee is entitled to, in
good faith, rely or act upon any report or other information furnished to that
member by any officer or other employee of the Company or any Parent or
Affiliate, the Company’s independent certified public accountants, or any
executive compensation consultant or other professional retained by the Company
to assist in the administration of the Plan.
Limitation on
Liability
4.5 To
the extent permitted by applicable law in effect from time to time, no member of
the Administrator shall be liable for any action or omission of any other member
of the Administrator nor for any act or omission on the member’s own part,
excepting only the member’s own wilful misconduct or gross negligence, arising
out of or related to this Plan. The Company shall pay expenses
incurred by, and satisfy a judgment or fine rendered or levied against, a
present or former member of the Administrator in any action against such person
(whether or not the Company is joined as a party defendant) to impose liability
or a penalty on such person for an act alleged to have been committed by such
person while a member of the Administrator arising with respect to this Plan or
administration thereof or out of membership on the Administrator or by the
Company, or all or any combination of the preceding, provided, the member was
acting in good faith, within what such member reasonably believed to have been
within the scope of his or her employment or authority and for a purpose which
he or she reasonably believed to be in the best interests of the Company or its
stockholders. Payments authorized hereunder include amounts paid and
expenses incurred in settling any such action or threatened
action. The provisions of this Section 4.5 shall apply to the estate,
executor, administrator, heirs, legatees or devisees of a member of the
Administrator, and the term “person” as used on this
Section 4.5 shall include the estate, executor, administrator, heirs, legatees,
or devisees of such person.
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5.
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ELIGIBILITY
|
Except as otherwise provided, all types
of Awards may be granted to Eligible Participants. An Eligible Participant who
has been granted an Award may be, if he or she continues to be eligible, granted
additional Awards.
B-8
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6.
|
AWARDS
|
Type of
Awards
6.1 The
Administrator is authorized to award any type of arrangement to an Eligible
Participant that is not inconsistent with the provisions of the Plan and that by
its terms involves or might involve the issuance of:
(a) Shares,
including unrestricted Shares;
(b) Options;
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(c)
|
SARs
or similar rights with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion privilege
related to the passage of time, the occurrence of one or more events, or
the satisfaction of performance criteria or other
conditions;
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|
(d)
|
any
other security with the value derived from the value of the Shares, such
as Restricted Stock and Restricted Stock
Units;
|
(e) Deferred
Stock Units;
(f)
Dividend Equivalent Rights, as defined in Section 13; or
(g) any
combination of the foregoing.
Designation of
Award
6.2 Each
type of Award shall be designated in the Award Agreement. In the case
of an Option, the Option shall be designated as either an Incentive Stock Option
or a Non-Qualified Stock Option. But see Section 7.3(a) regarding
exceeding the Incentive Stock Option threshold.
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7.
|
GRANT OF OPTIONS;
TERMS AND CONDITIONS OF
GRANT
|
Grant of
Options
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7.1
|
(a) |
One or more Options may be granted to any Eligible
Participant. Subject to the express provisions of this Plan,
the Administrator shall determine from the Eligible Participants those
individuals to whom Options under this Plan may be granted. The
Shares underlying a grant of an Option may be in the form of Restricted
Stock or unrestricted Stock.
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|
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(b)
|
Further,
subject to the express provisions of this Plan, the Administrator shall
specify the Grant Date, the number of Shares covered by the Option, the
exercise price and the terms and conditions for exercise of the
Options. As soon as practicable after the Grant Date, the
Company shall provide the Grantee with a written Award Agreement in the
form approved by the Administrator, which sets out the Grant Date, the
number of Shares covered by the Option, the exercise price and the terms
and conditions for exercise of the
Option.
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(c)
|
The
Administrator may, in its absolute discretion, grant Options under this
Plan at any time and from time to time before the expiration of this
Plan.
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B-9
General Terms and
Conditions
7.2 Except
as otherwise provided herein, the Options shall be subject to the following
terms and conditions and such other terms and conditions not inconsistent with
this Plan as the Administrator may impose:
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(a)
|
Exercise of
Option. The Administrator may determine in its discretion whether
any Option shall be subject to vesting and the terms and conditions of any
such vesting. The Award Agreement shall contain any such
vesting schedule;
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(b)
|
Option
Term. Each Option and all rights or obligations
thereunder shall expire on such date as shall be determined by the
Administrator, but not later than ten years after the Grant Date (five
years in the case of an Incentive Stock Option when the Optionee
beneficially owns more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary (a “Ten Percent
Stockholder”), as determined with reference to Rule 13d-3 of the
Exchange Act), and shall be subject to earlier termination as hereinafter
provided;
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(c)
|
Exercise
Price. The Exercise Price of any Option shall be
determined by the Administrator when the Option is granted, at such
Exercise Price as may be determined by the Administrator in the
Administrator’s sole and absolute discretion; provided, however, that the
Exercise Price of any Incentive Stock Option granted to a Ten Percent
Stockholder shall not be less than the Fair Market Value of the Shares on
the Grant Date. Payment for the Shares purchased shall be made
in accordance with Section 16 of this Plan. The
Administrator is authorized to issue Options, whether Incentive Stock
Options or Non-qualified Stock Options, at an option price which is lower
than or in excess of the Fair Market Value on the Grant Date, to determine
the terms and conditions of any Award granted under the Plan including,
but not limited to, the exercise price, grant price or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of the
Award, and acceleration or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines that is
not inconsistent with any rule or regulation under any tax or securities
laws or includes an alternative right that does not disqualify an
Incentive Stock Option under applicable
regulations;
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|
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(d)
|
Method of
Exercise. Options may be exercised only by delivery to
the Company of a stock option exercise agreement (the “Exercise Agreement”) in
a form approved by the Administrator (which need not be the same for each
Grantee), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and
such representations and agreements regarding the Grantee’s investment
intent and access to information and other matters, if any, as may be
required or desirable by the Company to comply with applicable securities
laws, together with payment in full of the exercise price for the number
of Shares being purchased;
|
(e) Exercise After Certain
Events.
(i) Termination of Continuous
Services.
(A) Options.
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|
(I)
|
Termination of
Continuous Services. If for any reason other than
Disability or death, a Grantee terminates Continuous Services with the
Company or a Subsidiary, vested Options held at the date of such
termination may be exercised, in whole or in part, either (i) at any time
within three months after the date of such termination, or (ii) during any
lesser period as specified in the Award Agreement or (iii) during any
lesser period as may be determined by the Administrator, in its sole and
absolute discretion, prior the date of such termination (but in no event
after the earlier of (A) the expiration date of the Option as set forth in
the Award Agreement and (B) ten years from the Grant Date (five years for
a Ten Percent Stockholder if the Option is an Incentive Stock
Option)).
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(II)
|
Continuation of
Services as Consultant/Advisor. If a Grantee granted an
Incentive Stock Option terminates employment but continues as a Consultant
(no termination of Continuous Services), the Grantee need not exercise an
Incentive Stock Option within either of the termination periods provided
for immediately hereinabove but shall be entitled to exercise, in whole or
in part, either (i) at any time within three months after the then date of
termination of Continuous Services to the Company or a Subsidiary, or (ii)
during any lesser period as specified in the Award Agreement or (iii)
during any lesser period as may be determined by the Administrator, in its
sole and absolute discretion, prior the date of such then termination of
Continuous Services to the Company or the Subsidiary (one year in the
event of Disability or death) (but in no event after the earlier of (A)
the expiration date of the Option as set forth in the Award Agreement and
(B) ten years from the Grant Date (five years for a Ten Percent
Stockholder if the Option is an Incentive Stock
Option)). However, if the Grantee does not exercise within
three months of termination of employment, pursuant to Section 422 of the
Code the Option shall not qualify as an Incentive Stock
Option.
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|
(B)
|
Disability and
Death. If a Grantee becomes Disabled while rendering
Continuous Services to the Company or a Subsidiary, or dies while employed
by the Company or Subsidiary or within three months thereafter, vested
Options then held may be exercised by the Grantee, the Grantee’s personal
representative, or by the person to whom the Option is transferred by the
laws of descent and distribution, in whole or in part, at any time within
one year after the termination because of the Disability or death or any
lesser period specified in the Award Agreement (but in no event after the
earlier of (i) the expiration date of the Option as set forth in the Award
Agreement, and (ii) ten years from the Grant Date (five years for a Ten
Percent Stockholder if the Option is an Incentive Stock
Option).
|
B-10
Limitations on Grant of
Incentive Stock Options
|
7.3
|
(a)
|
Threshold. The
aggregate Fair Market Value (determined as of the Grant Date) of the
Shares for which Incentive Stock Options may first become exercisable by
any Grantee during any calendar year under this Plan, together with that
of Shares subject to Incentive Stock Options first exercisable by such
Grantee under any other plan of the Company or any Parent or Subsidiary,
shall not exceed $100,000. For purposes of this Section 7.3(a),
all Options in excess of the $100,000 threshold shall be treated as
Non-Qualified Stock Options notwithstanding the designation as Incentive
Stock Options. For this purpose, Options shall be taken into
account in the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the date the Option with respect
to such Shares is granted.
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|
(b)
|
Compliance with
Section 422 of the Code. There shall be imposed in the
Award Agreement relating to Incentive Stock Options such terms and
conditions as are required in order that the Option be an “incentive stock
option” as that term is defined in Section 422 of the
Code.
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|
|
(c)
|
Requirement of
Employment. No Incentive Stock Option may be granted to
any person who is not an Employee of the Company or a Parent or Subsidiary
of the Company.
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|
8.
|
RESTRICTED STOCK
AWARDS
|
Grant of Restricted Stock
Awards
8.1 Subject
to the terms and provisions of this Plan, the Administrator is authorized to
make awards of Restricted Stock to any Eligible Participant in such amounts and
subject to such terms and conditions as may be selected by the
Administrator. The restrictions may lapse separately or in
combination at such times, under such circumstances, in such instalments,
time-based or upon the satisfaction of performance goals or otherwise, as the
Administrator determines at the time of the grant of the Award or thereafter.
(See Performance Goals, Section 14.4). All awards of Restricted Stock
shall be evidenced by Award Agreements.
Consideration
8.2 Restricted
Stock may be issued in connection with:
(a) Services. Services
rendered to the Company or an Affiliate (i.e. bonus); and/or
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|
(b)
|
Purchase
Price. A purchase price, as specified in the Award
Agreement related to such Restricted Stock, equal to not be less than 100%
of the Fair Market Value of the Shares underlying the Restricted Stock on
the date of issuance.
|
Voting and
Dividends
8.3 Unless
the Administrator in its sole and absolute discretion otherwise provides in an
Award Agreement, holders of Restricted Stock shall have the right to vote such
Restricted Stock and the right to receive any dividends declared or paid with
respect to such Restricted Stock. The Administrator may provide that
any dividends paid on Restricted Stock must be reinvested in shares of Stock,
which may or may not be subject to the same vesting conditions and restrictions
applicable to such Restricted Stock. All distributions, if any,
received by a Grantee with respect to Restricted Stock as a result of any stock
split, stock dividend, combination of shares, or other similar transaction shall
be subject to the restrictions applicable to the original Award.
Forfeiture
8.4 In
the case of an event of forfeiture pursuant to the Award Agreement, including
failure to satisfy the restriction period or a performance objective during the
applicable restriction period, any Restricted Stock that has not vested prior to
the event of forfeiture shall automatically expire, and all of the rights, title
and interest of the Grantee thereunder shall be forfeited in their entirety
including but not limited to any right to vote and receive dividends with
respect to the Restricted Stock. Notwithstanding the foregoing, the
Administrator may provide in any Award Agreement that restrictions or forfeiture
conditions relating to Restricted Stock shall be waived in whole or in part in
the event of terminations resulting from specified causes, and the Administrator
may in other cases waive in whole or in part restrictions or forfeiture
conditions relating to Restricted Stock, provided such waiver is in accordance
with the Applicable Laws.
Certificates for Restricted
Stock
8.5 Restricted
Stock granted under this Plan may be evidenced in such manner as the
Administrator shall determine, including by way of certificates. The
Administrator may provide in an Award Agreement that either (i) the Secretary of
the Company shall hold such certificates for the Grantee’s benefit until such
time as the Restricted Stock is forfeited to the Company or the restrictions
lapse, (see Escrow; Pledge of Shares, Section 23) or (ii) such certificates
shall be delivered to the Grantee, provided, however, that such certificates
shall bear a legend or legends that comply with the applicable securities laws
and regulations and make appropriate reference to the restrictions imposed under
this Plan and the Award Agreement.
B-11
|
9.
|
UNRESTRICTED STOCK
AWARDS
|
The Administrator may, in its sole
discretion, grant (or sell at not less than 100% of the Fair Market Value or
such other higher purchase price determined by the Administrator in the Award
Agreement) an Award of unrestricted Shares to any Grantee pursuant to which such
Grantee may receive Shares free of any restrictions under this
Plan.
|
10.
|
RESTRICTED STOCK
UNITS
|
Grant of Restricted Stock
Units
10.1 Subject
to the terms and provisions of this Plan, the Administrator is authorized to
make awards of Restricted Stock Units to any Eligible Participant in such
amounts and subject to such terms and conditions as may be selected by the
Administrator. These restrictions may lapse separately or in
combination at such times, under such circumstances, in such instalments,
time-based or upon the satisfaction of performance goals or otherwise, as the
Administrator determines at the time of the grant of the Award or thereafter.
(See Performance Goals, Section 14.4). All awards of Restricted Stock
Units shall be evidenced by Award Agreements.
Number of Restricted Stock
Units
10.2 The
Award Agreement shall specify the number of Share equivalent units granted and
such other provisions as the Administrator determines.
Consideration
10.3 Restricted
Stock Units may be issued in connection with:
(a) Services. Services
rendered to the Company or an Affiliate (i.e. bonus); and/or
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|
(b)
|
Purchase
Price. A purchase price as specified in the Award
Agreement related to such Restricted Stock Units, equal to not be less
than 100% of the Fair Market Value of the Shares underlying the Restricted
Stock Units on the date of
issuance.
|
No Voting
Rights
10.4 The
holders of Restricted Stock Units shall have no rights as stockholders of the
Company.
Dividend
Equivalency
10.5 The
Administrator, in its sole and absolute discretion, may provide in an Award
Agreement evidencing a grant of Restricted Stock Units that the holder shall be
entitled to receive, upon the Company’s payment of a cash dividend on its
outstanding Shares, a cash payment for each Restricted Stock
Unit. (See Section 13, Dividend Equivalent Right). Such
Award Agreement may also provide that such cash payment shall be deemed
reinvested in additional Restricted Stock Units at a price per unit equal to the
Fair Market Value of a Share on the date that such dividend is
paid.
Creditor’s
Rights
10.6 A
holder of Restricted Stock Units shall have no rights other than those of a
general creditor of the Company. Restricted Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Award Agreement.
B-12
Settlement of Restricted
Stock Units
10.7 Each
Restricted Stock Unit shall be paid and settled by the issuance of Restricted
Stock or unrestricted Shares in accordance with the Award Agreement and if such
settlement is subject to Section 409A of the Code only upon any one or more of
the following as provided for in the Award Agreement:
(a) a
specific date or date determinable by a fixed schedule;
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|
(b)
|
upon
the Eligible Participant’s termination of Continuous Services to the
extent the same constitutes a separation from services for purposes of
Section 409A of the Code except that if an Eligible Participant is a “key
employee” as defined in Section 409A of the Code for such purposes, then
payment or settlement shall occur 6 months following such separation of
service;
|
(c) as
a result of the Eligible Participant’s death or Disability; or
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|
(d)
|
in
connection with or as a result of a Change of Control in compliance with
Section 409A of the Code.
|
Forfeiture
10.8 Upon
failure to satisfy any requirement for settlement as set forth in the Award
Agreement, including failure to satisfy any restriction period or performance
objective, any Restricted Stock Units held by the Grantee shall automatically
expire, and all of the rights, title and interest of the Grantee thereunder
shall be forfeited in their entirety including but not limited to any right to
receive dividends with respect to the Restricted Stock Units.
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11.
|
DIRECTOR SHARES AND
DIRECTOR DEFERRED STOCK
UNITS
|
The grant of Awards of Shares to
Directors and the election by Directors to defer the receipt of the Awards of
Shares (the “Deferred Stock
Units”) shall be governed by the provisions of Subpart A which is
attached hereto. The provisions of Subpart A are attached hereto as
part of this Plan and are incorporated herein by reference.
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12.
|
STOCK APPRECIATION
RIGHTS
|
Awards of
SARs
12.1 An
SAR is an award to receive a number of Shares (which may consist of Restricted
Stock), or cash, or Shares and cash, as determined by the Administrator in
accordance with Section 12.4 below, for services rendered to the
Company. A SAR may be awarded pursuant to an Award Agreement that
shall be in such form (which need not be the same for each Grantee) as the
Administrator shall from time to time approve, and shall comply with and be
subject to the terms and conditions of this Plan. A SAR may vary from
Grantee to Grantee and between groups of Grantees, and may be based upon
performance objectives (See Performance Goals in Section 14.4).
Term
12.2 The
term of a SAR shall be set forth in the Award Agreement as determined by the
Administrator.
Exercise
12.3 A
Grantee desiring to exercise a SAR shall give written notice of such exercise to
the Company, which notice shall state the proportion of Shares and cash that the
Grantee desires to receive pursuant to the SAR exercised, subject to the
discretion of the Administrator. Upon receipt of the notice from the
Grantee, subject to the Administrator’s election to pay cash as provided in
Section 12.4 below, the Company shall deliver to the person entitled
thereto (i) a certificate or certificates for Shares and/or (ii) a cash payment,
in accordance with Section 12.4below. The date the Company receives
written notice of such exercise hereunder is referred to in this Section 12
as the “exercise
date”.
Number of Shares or Amount
of Cash
12.4 Subject
to the discretion of the Administrator to substitute cash for Shares, or some
portion of the Shares for cash, the amount of Shares that may be issued pursuant
to the exercise of a SAR shall be determined by dividing: (i) the total number
of Shares as to which the SAR is exercised, multiplied by the amount by which
the Fair Market Value of the Shares on the exercise date exceeds the Fair Market
Value of a Share on the date of grant of the SAR; by (ii) the Fair Market Value
of a Share on the exercise date; provided, however, that fractional Shares shall
not be issued and in lieu thereof, a cash adjustment shall be
paid. In lieu of issuing Shares upon the exercise of a SAR, the
Administrator in its sole discretion may elect to pay the cash equivalent of the
Fair Market Value of the Shares on the exercise date for any or all of the
Shares that would otherwise be issuable upon exercise of the SAR.
B-13
Effect of
Exercise
12.5 A
partial exercise of a SAR shall not affect the right to exercise the remaining
SAR from time to time in accordance with this Plan and the applicable Award
Agreement with respect to the remaining shares subject to the SAR.
Forfeiture
12.6 In
the case of an event of forfeiture pursuant to the Award Agreement, including
failure to satisfy any restriction period or a performance objective, any SAR
that has not vested prior to the date of termination shall automatically expire,
and all of the rights, title and interest of the Grantee thereunder shall be
forfeited in their entirety.
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13.
|
DIVIDEND EQUIVALENT
RIGHT
|
A dividend equivalent right is an Award
entitling the recipient to receive credits based on cash distributions that
would have been paid on the Shares specified in the dividend equivalent right
(or other Award to which it relates) if such Shares had been issued to and held
by the recipient (a “Dividend
Equivalent Right”). A Dividend Equivalent Right may be granted
hereunder to any Grantee as a component of another Award or as a freestanding
Award. The terms and conditions of Dividend Equivalent Right shall be
specified in the grant. Dividend equivalents credited to the holder
of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional Shares, which may thereafter accrue additional
equivalents. Any such reinvestment shall be at Fair Market Value on
the date of reinvestment. Dividend Equivalent Rights may be settled in cash or
Shares or a combination thereof, in a single instalment or instalments, all
determined in the sole discretion of the Administrator. A Dividend
Equivalent Right granted as a component of another Award may provide that such
Dividend Equivalent Right shall be settled upon exercise, settlement, or payment
of, or lapse of restrictions on, such other Award, and that such Dividend
Equivalent Right shall expire or be forfeited or annulled under the same
conditions as such other Award. A Dividend Equivalent Right granted
as a component of another Award may also contain terms and conditions different
from such other Award.
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14.
|
TERMS AND CONDITIONS
OF AWARDS
|
In
General
14.1 Subject
to the terms of the Plan and Applicable Laws, the Administrator shall determine
the provisions, terms, and conditions of each Award including, but not limited
to, the Award vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other consideration)
upon settlement of the Award, payment contingencies, and satisfaction of any
performance criteria.
Term of
Award
14.2 The
term of each Award shall be the term stated in the Award Agreement.
Transferability