2005 STOCK INCENTIVE
PLAN
OF
NATIONAL INVESTMENT MANAGERS
INC.
1.
Purposes of the Plan. This stock incentive plan (the "Plan")
is intended to provide an incentive to employees (including
directors and officers who are employees), and to consultants and
directors who are not employees, of National Investment Managers
Inc., a Florida corporation (the "Company"), or any of its
Subsidiaries (as such term is defined in Paragraph 21), and to
offer an additional inducement in obtaining the services of such
individuals. The Plan provides for the grant of "incentive stock
options" ("ISOs'') within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"),
nonqualified stock options which do not qualify as ISOs ("NQSOs"),
Stock Appreciation Rights (as such term is defined in Paragraph 13)
and Restricted Stock (as such term is defined in Paragraph 14). The
Company makes no representation or warranty, express or implied, as
to the qualification of any option as an "incentive stock option"
under the Code. Grants of Stock options, Stock Appreciation Rights
and Restricted Stock hereunder are referred to collectively as
“Awards”, and the recipient of an Award is sometimes
referred to as a “Participant”.
2.
Stock Subject to the Plan. Subject to the provisions of
Paragraph 12, the aggregate number of shares of the Company's
Common Stock, par value $0.001 per share ("Common Stock"), for
which options may be granted under the Plan or which may be issued
as shares of Restricted Stock shall not exceed 2,667,400
shares. Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized but
unissued shares of Common Stock or shares of Common Stock held in
the treasury of the Company. Subject to the provisions
of Paragraph 15, any shares of Common Stock subject to an Award
that for any reason expires, is canceled or is terminated
unexercised or which ceases for any reason to be exercisable shall
again become available for the granting of Awards under the
Plan. The Company shall at all times during the term of
the Plan reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the
Plan.
3.
Administration of the Plan. The Plan will be administered by
the Board of Directors, or by a committee (the "Committee")
consisting of two or more directors appointed by the Board of
Directors. Those administering the Plan shall be
referred to herein as the
"Administrators." Notwithstanding the foregoing, if the
Company is or becomes a corporation issuing any class of common
equity securities required to be registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
to the extent necessary to preserve any deduction under Section
162(m) of the Code or to comply with Rule 16b-3 promulgated under
the Exchange Act, or any successor rule ("Rule 16b-3"), any
Committee appointed by the Board of Directors to administer the
Plan shall be comprised of two or more directors each of whom shall
be a "non-employee director," within the meaning of Rule 16b-3, and
an "outside director," within the meaning of Treasury Regulation
Section 1.162-27(e)(3), and the delegation of powers to the
Committee shall be consistent with applicable laws and regulations
(including, without limitation, applicable state law and Rule
16b-3). Unless otherwise provided in the By-Laws of the
Company, by resolution of the Board of Directors or applicable law,
a majority of the members of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, and any acts approved in
writing by all members without a meeting, shall be the acts of the
Committee. Subject to the express provisions of the Plan, the
Administrators shall have the authority, in their sole discretion,
to determine the persons who shall be granted Awards; the times
when they shall receive Awards; whether an option granted to an
employee shall be an ISO or a NQSO; the type (i.e., voting or
non-voting) and number of shares of Common Stock to be subject to
each Award; the term of each Award; the date each Award shall
become exercisable; whether an Award shall be exercisable in whole
or in installments, and, if in installments, the number of shares
of Common Stock to be subject to each installment; whether the
installments shall be cumulative; the date each installment shall
become exercisable and the term of each installment; whether to
accelerate the date of exercise of any Award or installment; the
exercise price of each Award; the form of payment of the exercise
price; the fair market value of a share of Common Stock; whether
and under what conditions to restrict the sale or other disposition
of the shares of Common Stock acquired upon the exercise of an
Award and, if so, whether and under what conditions to waive any
such restriction; whether and under what conditions to subject the
exercise of all or any portion of an Award to the fulfillment of
certain restrictions or contingencies as specified in the contract
referred to in Paragraph 11 (the "Contract"), including without
limitation restrictions or contingencies relating to (a) entering
into a covenant not to compete with the Company, its Parent (if
any) (as such term is defined in Paragraph 21) and any
Subsidiaries, (b) financial objectives for the Company, any of its
Subsidiaries, a division, a product line or other category and/or
(c) the period of continued employment of the Participant with the
Company or any of its Subsidiaries, and to determine whether such
restrictions or contingencies have been met; the amount, if any,
necessary to satisfy the obligation of the Company, any of its
Subsidiaries or any Parent to withhold taxes or other amounts;
whether a Participant has a Disability (as such term is defined in
Paragraph 21); with the consent of the Participant, to cancel or
modify an Award, provided, however, that the modified
provision is permitted to be included in an Award granted under the
Plan on the date of the modification; provided, further,
however, that in the case of a modification (within the meaning
of Section 424(h) of the Code) of an ISO, such option as modified
would be permitted to be granted on the date of such modification
under the terms of the Plan; to construe the respective Contracts
and the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to approve any provision of the Plan or any
Award granted under the Plan or any amendment to either which,
under Rule 16b-3 or Section 162(m) of the Code, requires the
approval of the Board of Directors, a committee of non-employee
directors or the stockholders, in order to be exempt under Section
16(b) of the Exchange Act (unless otherwise specifically provided
herein) or to preserve any deduction under Section 162(m) of the
Code; and to make all other determinations necessary or advisable
for administering the Plan. Any controversy or claim arising out of
or relating to the Plan, any Award granted under the Plan or any
Contract shall be determined unilaterally by the Administrators in
their sole discretion. The determinations of the Administrators on
matters referred to in this Paragraph 3 shall be conclusive and
binding on all parties. No Administrator or former Administrator
shall be liable for any action or determination made in good faith
with respect to the Plan or any Award granted hereunder.
4.
Eligibility . The Administrators may from time to
time, consistent with the purposes of the Plan, grant Awards to
such employees (including officers and directors who are employees)
of, or consultants to, the Company or any of its Subsidiaries, and
to such directors of the Company who, at the time of grant, are not
common law employees of the Company or of any of its Subsidiaries,
as the Administrators may determine in their sole discretion. Such
Awards granted shall cover such number of shares of Common Stock as
the Administrators may determine in their sole discretion;
provided , however , that the aggregate market value
(determined at the time the option is granted) of the shares of
Common Stock for which any eligible employee may be granted ISOs
under the Plan or any other plan of the Company, or of a Parent or
a Subsidiary of the Company, which are exercisable for the first
time by such Participant during any calendar year shall not exceed
$100,000. The $100,000 ISO limitation amount shall be applied by
taking ISOs into account in the order in which they were granted.
Any option (or portion thereof) granted in excess of such ISO
limitation amount shall be treated as a NQSO to the extent of such
excess.
5.
Exercise Price. The exercise price of the shares of Common
Stock under each Award shall be determined by the Administrators in
their sole discretion; provided , however , that the
exercise price of an ISO, or of any option intended to satisfy the
performance- based compensation exemption to the deduction
limitation under Section 162(m) of the Code, shall not be less than
the fair market value of the Common Stock subject to such option on
the date of grant; and provided , however , that if,
at the time an ISO is granted, the optionee owns (or is deemed to
own under Section 424(d) of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company, of any of its Subsidiaries or of a Parent, the
exercise price of such ISO shall not be less than 110% of the fair
market value of the Common Stock subject to such ISO on the date of
grant.
The fair market
value of a share of Common Stock on any day shall be (a) if the
principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per
share of the Common Stock on such day as reported by such exchange
or on a consolidated tape reflecting transactions on such exchange,
(b) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is quoted on the NASDAQ
Stock Market ("Nasdaq"), and (i) if actual sales price information
is available with respect to the Common Stock, the average of the
highest and lowest sales prices per share of the Common Stock on
such day on Nasdaq, or (ii) if such information is not available,
the average of the highest bid and the lowest asked prices per
share for the Common Stock on such day on Nasdaq, or (c) if the
principal market for the Common Stock is not a national securities
exchange and the Common Stock is not quoted on Nasdaq, the average
of the highest bid and lowest asked prices per share for the Common
Stock on such day as reported on the OTC Bulletin Board Service or
by National Quotation Bureau, Incorporated or a comparable service;
provided, however, that if clauses (a), (b) and (c) of this
Paragraph 5 are all inapplicable because the Company's Common Stock
is not publicly traded, or if no trades have been made or no quotes
are available for such day, the fair market value of a share of
Common Stock shall be determined by the Administrators by any
method consistent with any applicable regulations adopted by the
Treasury Department relating to stock options.
6.
Term . Each Award granted pursuant to the Plan
shall be for such term as is established by the Administrators, in
their sole discretion, at or before the time such Award is granted;
provided , however , that the term of each Award
granted pursuant to the Plan shall be for a period not exceeding 10
years from the date of grant thereof, and provided further,
that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent,
the term of the ISO shall be for a period not exceeding five years
from the date of grant. Options shall be subject to earlier
termination as hereinafter provided.
7.
Exercise . An Award (or any installment thereof),
to the extent then exercisable, shall be exercised by giving
written notice to the Company at its principal office stating which
Award is being exercised, specifying the number of shares of Common
Stock as to which such Award is being exercised and accompanied by
payment in full of the aggregate exercise price therefor (a) in
cash and/or by certified check, (b) with the authorization of the
Administrators, with previously acquired shares of Common Stock
having an aggregate fair market value (determined in accordance
with Paragraph 5), on the date of exercise, equal to the aggregate
exercise price of all Awards being exercised, or (c) some
combination thereof; provided, however, that in no case may
shares be tendered if such tender would require the Company to
incur a charge against its earnings for financial accounting
purposes. The Company shall not be required to issue any shares of
Common Stock pursuant to the exercise of any Award until all
required payments with respect thereto, including payments for any
required withholding amounts, have been made.
The
Administrators may, in their sole discretion, permit payment of the
exercise price of an option by delivery by the optionee of a
properly executed notice, together with a copy of the Participant's
irrevocable instructions to a broker acceptable to the
Administrators to deliver promptly to the Company the amount of
sale or loan proceeds sufficient to pay such exercise price. In
connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
A Participant
shall not have the rights of a stockholder with respect to such
shares of Common Stock to be received upon the exercise of an
option until the date of issuance of a stock certificate to the
Participant for such shares or, in the case of uncertificated
shares, until the date an entry is made on the books of the
Company's transfer agent representing such shares; provided,
however , that until such stock certificate is issued or until
such book entry is made, any Participant using previously acquired
shares of Common Stock in payment of an option exercise price shall
continue to have the rights of a stockholder with respect to such
previously acquired shares.
In no case may
a fraction of a share of Common Stock be purchased or issued under
the Plan.
8.
Termination of Relationship . Except as may
otherwise be expressly provided in the applicable Contract, any
Participant whose employment or consulting relationship with the
Company, its Parent and any of its Subsidiaries has terminated for
any reason other than the death or Disability of the Participant
may exercise any Award granted to the Participant as an employee or
consultant, to the extent exercisable on the date of such
termination, at any time within three months after the date of
termination, but not thereafter and in no event after the date the
Award would otherwise have expired; provided, however, that
if such relationship is terminated for Cause (as defined in
Paragraph 21), such Award shall terminate immediately.
For the
purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of
the determination, the individual was an employee of such
corporation for purposes of Section 422(a) of the Code. As a
result, an individual on military leave, sick leave or other bona
fide leave of absence shall continue to be considered an employee
for purposes of the Plan during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the
individual's right to re-employment with the Company, any of its
Subsidiaries or a Parent is guaranteed either by statute or by
contract. If the period of leave exceeds 90 days and the
individual's right to re-employment is not guaranteed by statute or
by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
Except as may
otherwise be expressly provided in the applicable Contract, a
Participant whose directorship with the Company has terminated for
a
