2007
Equity Incentive Plan
The purpose of
the AMDL, Inc. 2007 Equity Incentive Plan (the “Plan”)
is to strengthen AMDL, Inc., a Delaware corporation (the
“Company”), by providing to employees, officers,
directors, consultants and independent contractors of the Company
or any of its Subsidiaries (as defined below) (including dealers,
distributors, and other business entities or persons providing
services on behalf of the Company or any of its Subsidiaries) added
incentive for high levels of performance and unusual efforts to
increase the earnings of the Company. The Plan seeks to accomplish
this purpose by enabling specified persons to purchase shares of
the Company’s common stock, $.001 par value, thereby
increasing their proprietary interest in the Company’s
success and encouraging them to remain in the employ or service of
the Company.
“Affiliate” means any Parent or
Subsidiary of the Company, whether now or hereafter
existing.
“Board” means the Board of Directors of
the Company.
" Change in
Control ” means (i) the consummation of a merger
or consolidation of the Company with or into another entity or any
other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s
securities outstanding immediately after such merger, consolidation
or other reorganization is owned by persons who were not
shareholders of the Company immediately prior to such merger,
consolidation or other reorganization; or (ii) the sale,
transfer or other disposition of all or substantially all of the
Company’s assets. A transaction shall not constitute a Change
in Control if its sole purpose is to change the jurisdiction of the
Company’s incorporation or to create a holding company that
will be owned in substantially the same proportions by the persons
who held the Company’s securities immediately before such
transaction.
“Code” means the Internal Revenue Code of
1986, as amended.
“Committee” means the Compensation
Committee of the Board, which shall administer the Plan and consist
of a majority of Independent Directors.
“Consultant” means any person, including
an advisor, (i) engaged by the Company or an Affiliate to
render consulting or advisory services and who is compensated for
such services, including members of any advisory board constituted
by the Company, or (ii) who is a member of the Board of
Directors of an Affiliate. However, the term
“Consultant” shall not include either Directors who are
not compensated by the Company for their services as Directors or
Directors who are merely paid a director’s fee by the Company
for their services as Directors.
“Continuous Service” means, with respect
to Employees, service with the Company or an Affiliate that is not
interrupted or terminated. With respect to Directors or
Consultants, Continuous Service means service with the Company, or
a Parent or Subsidiary of the Company, whether as a Director or
Consultant, that is not interrupted or terminated. The Board or the
chief executive officer of the Company, in that party’s sole
discretion, may determine whether Continuous Service shall
be
considered
interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal
leave.
“Director” means a member of the
Board.
“Disability” means the permanent and
total disability of a person within the meaning of
Section 22(e)(3) of the Code.
“Eligible Recipient” means any Employee,
Officer, Director or Consultant of the Company, or of a Parent or
Subsidiary of the Company.
“Employee” means any person employed by
the Company or an Affiliate. Mere service as a Director or payment
of a director’s fee by the Company or an Affiliate shall not
be sufficient to constitute “employment” by the Company
or an Affiliate.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended
“
Fair Market Value” means, as of any date, the
value of the Ordinary Shares determined as follows: The fair market
value per share of the Ordinary Shares as determined by the
Committee in good faith. The Committee is authorized to make its
determination as to the fair market value per share of the Ordinary
Shares on the following basis: (i) if the Ordinary Shares are
traded only otherwise than on a securities exchange and are not
quoted on the National Association of Securities Dealers’
Automated Quotation System (“NASDAQ”), but are quoted
on the bulletin board or in the “pink sheets” published
by the National Daily Quotation Bureau, the greater of (a) the
average of the mean between the average daily bid and average daily
asked prices of the Ordinary Shares during the thirty (30) day
period preceding the date of grant of an Option, as quoted on the
bulletin board or in the “pink sheets” published by the
National Daily Quotation Bureau, or (b) the mean between the
average daily bid and average daily asked prices of the Ordinary
Shares on the date of grant, as published on the bulletin board or
in such “pink sheets;” (ii) if the Ordinary Shares
are traded on a securities exchange or on the NASDAQ, the greater
of (a) the average of the daily closing prices of the Ordinary
Shares during the ten (10) trading days preceding the date of
grant of an Option, or (b) the closing price of the Ordinary
Shares on the last trading day preceding the date of grant of an
Option; or (iii) if the Ordinary Shares are traded only
otherwise than as described in (i) or (ii) above, or if
the Ordinary Shares are not publicly traded, the value determined
by the Committee in good faith based upon the fair market value as
determined by completely independent and well qualified
experts.
“Incentive Stock Option” means an Option
intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated
thereunder.
“Independent Director” means an
independent director as defined in Section 121 of the American
Stock Exchange Company Guide, or any successor rule, as in effect
from time to time.
“Nonstatutory Stock Option” means an
Option not intended to qualify as an Incentive Stock
Option.
“Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder.
“Option” means a stock option granted
pursuant to Section 6 of the Plan.
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“Option Agreement” means a written
agreement between the Company and an Optionholder evidencing the
terms and conditions of an individual Option grant. Each Option
Agreement shall be subject to the terms and conditions of the
Plan.
“Optionholder” means a person to whom an
Option is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Option.
“Ordinary Shares” means the shares of
common stock, $.001 par value, of the Company.
“Outside Director” means a Director who
either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other
than benefits under a tax qualified pension plan), was not an
officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect
remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a
Director, or (ii) is otherwise considered an “outside
director” for purposes of Section 162(m) of the
Code.
“Parent” means a “parent
corporation,” whether now or hereafter existing, as defined
in Section 424(e) of the Code.
“Participant” means a person to whom a
Stock Award is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Stock Award.
“Plan” means this 2007 Equity Incentive
Plan, as amended from time to time.
“Restricted Stock” shall mean a grant of
Ordinary Shares pursuant to Section 7 of the Plan.
“Securities Act” means the Securities Act
of 1933, as amended.
“Stock Award” means any Option or grant
of Restricted Stock governed by the Plan.
“Stock Award Agreement” means a written
agreement between the Company and a holder of a Stock Award
evidencing the terms and conditions of an individual Stock Award
grant. Each Stock Award Agreement shall be subject to the terms and
conditions of the Plan.
“Subsidiary” means (1) in the case
of an Incentive Stock Option, a “subsidiary
corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code, and (2) in the case of any
other Stock Award, in addition to a subsidiary corporation as
defined in clause (1), (A) a limited liability company,
partnership or other entity in which the Company controls fifty
percent (50%) or more of the voting power or equity interests, or
(B) an entity with respect to which the Company possesses the
power, directly or indirectly, to direct or cause the direction of
the management and policies, whether through the Company’s
ownership of voting securities, by contract or
otherwise.
“Ten
Percent Shareholder” means a person who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock
comprising more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any of its
Affiliates.
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(a) Administration by the Committee. This Plan shall be
administered by the Committee. Any action of the Committee with
respect to administration of the Plan shall be taken pursuant to
(i) a majority vote at a meeting of the Committee (to be
documented by minutes), or (ii) the unanimous written consent
of its members.
(b) Powers of the Committee. Subject to the express
provisions of this Plan, the Committee shall have the authority to:
(i) construe and interpret the Plan, decide all questions and
settle all controversies and disputes which may arise in connection
with the Plan and to define the terms used therein;
(ii) prescribe, amend and rescind rules and regulations
relating to administration of the Plan; (iii) determine the
purchase price of the Shares covered by each Stock Award and the
method of payment of such price, individuals to whom, and the time
or times at which, Stock Awards shall be granted and exercisable
and the number of Ordinary Shares covered by each Stock Award;
(iv) determine the terms and provisions of the respective
Stock Award Agreements (which need not be identical);
(v) determine the duration and purposes of leaves of absence
which may be granted to participants without constituting a
termination of their employment for purposes of the Plan; and
(vi) make all other determinations necessary or advisable to
the administration of the Plan. Determinations of the Committee on
matters referred to in this Section 3 shall be conclusive and
binding on all parties howsoever concerned. With respect to
Incentive Stock Options, the Committee shall administer the Plan in
compliance with the provisions of Code Section 422 as the same
may hereafter be amended from time to time. No member of the
Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Award.
(c) Effect of the Committee’s Decision. All
determinations, interpretations and constructions regarding the
Plan or any Stock Award made by the Committee in good faith shall
not be subject to review by any person and shall be final, binding
and conclusive on all persons.
4.
Shares Subject to the
Plan.
(a) Share
Reserve. Subject to the provisions of Section 13 relating
to adjustments upon changes in Ordinary Shares, the number of
Ordinary Shares that may be issued under the Plan shall not exceed
1,500,000 in the aggregate.
(b) Reversion of Shares and Availability of Shares to the
Share Reserve . If any Stock Award granted under the Plan or
under any other equity incentive plan of the Company shall for any
reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, or if any Ordinary Shares issued to
a Participant pursuant to a Stock Award granted under the Plan or
under any other equity incentive plan of the Company are forfeited
back to or repurchased by the Company, including, but not limited
to, any repurchase or forfeiture caused by the failure to meet a
contingency or condition required for the vesting or exercise of
such shares, then the Ordinary Shares not acquired under such Stock
Award shall become available for issuance under the Plan, subject
to the limitation in Section 4(a).
(c) Source of Shares. The Ordinary Shares subject to
the Plan may be unissued shares or reacquired shares, bought on the
market or otherwise.
(a) Eligibility for Specific Stock Awards . Incentive
Stock Options may be granted only to Employees. Nonstatutory Stock
Options and Restricted Stock awards may be granted to all
Eligible
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Recipients.
Within the foregoing limits, the Committee, from time to time,
shall determine and designate persons to whom Stock Awards may be
granted. All such designations shall be made in the absolute
discretion of the Committee and shall not require the approval of
the stockholders, except to the extent such approval is required
pursuant to applicable securities laws or rules of an applicable
securities exchange. In determining (i) the number of Ordinary
Shares to be covered by each Stock Award, (ii) the purchase
price for such Ordinary Shares and the method of payment of such
price (subject to the other sections hereof), (iii) the
individuals of the eligible class to whom Stock Awards shall be
granted, (iv) the terms and provisions of the respective Stock
Award Agreements, and (v) the times at which such Stock Awards
shall be granted, the Committee shall take into account such
factors as it shall deem relevant in connection with accomplishing
the purpose of the Plan as set forth in Section 1. An
individual who has been granted a Stock Award may be granted
additional Stock Awards if the Committee shall so determine. No
Stock Award shall be granted under the Plan after March 14,
2016 but Stock Awards granted before such date may be exercisable
after such date.
(b) Ten
Percent Shareholders. A Ten Percent Shareholder shall not be
granted an Incentive Stock Option unless the exercise price of such
Option is at least one hundred ten percent (110%) of the Fair
Market Value of the Ordinary Shares at the date of grant and the
Option is not exercisable after the expiration of five
(5) years from the date of grant.
(c) Consultants. A Consultant shall not be eligible for
the grant of a Stock Award if, at the time of grant, a Form S-8
Registration Statement under the Securities Act (“
Form S-8 ”) is not available to register either
the offer or the sale of the Company’s securities to such
Consultant because of the nature of the services that the
Consultant is providing to the Company, or because the Consultant
is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both
(i) that such grant (A) shall be registered in another
manner under the Securities Act (e.g., on a Form S-3 Registration
Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant
jurisdictions. Form S-8 generally is available to consultants and
advisors only if (i) they are natural persons, (ii) they
provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the
issuer’s parent, and (iii) the services are not in
connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly
promote or maintain a market for the issuer’s
securities.
(d) Foreign Participants. Notwithstanding any provision
of the Plan to the contrary, in order to comply with the laws in
other countries in which the Company and its subsidiaries operate
or have Employees, Officers, Directors or Consultants, the
Committee, in its sole discretion, shall have the power and
authority to: (i) determine which subsidiaries shall be
covered by the Plan; (ii) determine which Employees, Officers,
Directors or Consultants outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions
of any Stock Award granted to Employees, Officers, Directors or
Consultants outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such
actions may be necessary or advisable (any such subplans and/or
modifications shall be attached to this subplan as appendices);
provided, however, that no such subplans and/or modifications shall
increase the number of Ordinary Shares reserved for issuance under
the Plan as set forth in Section 4 of the Plan; and
(v) take any action, before or after a Stock Award is granted,
that it deems advisable to obtain approval or comply with any
applicable foreign laws. If the terms of any Stock Award Agreement
delivered to a foreign Participant conflict with the terms of this
Plan, the terms of such Stock Award Agreement will
control.
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Each Option shall
be in such form and shall contain such terms and conditions as the
Committee shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for Ordinary Shares
purchased on exercise of each type of Option. The provisions of
separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof
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