GVI SECURITY SOLUTIONS,
INC.
2008 LONG-TERM INCENTIVE
PLAN
I. Purpose
The purpose of the GVI Security Solutions, Inc.
2008 Long-Term Incentive Plan (the “Plan”) is to
attract and retain and provide incentives to employees, officers,
directors and consultants of the Corporation and its Subsidiaries,
and to thereby increase overall stockholders’ value. The Plan
generally provides for the granting of stock, stock options, stock
appreciation rights, restricted shares or any combination of the
foregoing to the eligible participants.
II. Definitions
(a) “Award”
includes, without limitation, stock options (including incentive
stock options within the meaning of Section 422(b) of the Code),
stock appreciation rights, dividend equivalent rights, stock
awards, restricted share awards, or other awards that are valued in
whole or in part by reference to, or are otherwise based on, the
Common Stock (“other Common Stock-based Awards”), all
on a stand alone, combination or tandem basis, as described in or
granted under this Plan.
(b) “Award
Agreement” means a written agreement setting forth the terms
and conditions of each Award made under this Plan.
(c) “Board”
means the Board of Directors of the Corporation.
(d) “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
(e) “Committee”
means the Compensation Committee of the Board or such other
committee of the Board as may be designated by the Board from time
to time to administer this Plan or if no such committee is
designated, the Board.
(f) “Common
Stock” means the common stock of the Corporation, par value
$.001 per share, or any other securities of the Corporation into
which such common stock is reclassified or
reconstituted.
(g) “Corporation”
means GVI Security Solutions, Inc., a Delaware
corporation.
(h) “Employee”
means an employee of the Corporation or a Subsidiary.
(i) “Exchange
Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
(j) “Fair
Market Value” means the closing price for the Common Stock as
officially reported on the relevant date (or if there were no sales
on such date, on the next preceding date on which such closing
price was recorded) by the principal national securities exchange
on which the Common Stock is listed or admitted to trading, or, if
the Common Stock is not listed or admitted to trading on any such
national securities exchange, the closing price as furnished by the
National Association of Securities Dealers or a similar
organization or quotation system, or, if the Common Stock is not
quoted by the National Association of Securities Dealers or a
similar organization or quotation system, as determined in good
faith by resolution of the Committee (whose determination shall be
conclusive), based on the best information available to
it.
(k) “Officer”
means a person who is an officer of the Corporation within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(l) “Participant”
means an Employee, officer, director or consultant who has been
granted an Award under the Plan.
(m) “Plan
Year” means a twelve-month period beginning with January 1 of
each year.
(n) “Subsidiary”
means any corporation or other entity, whether domestic or foreign,
in which the Corporation has or obtains, directly or indirectly, a
proprietary interest of more than 50% by reason of stock ownership
or otherwise.
III. Eligibility
Any Employee, officer, director or consultant of
the Corporation or a Subsidiary selected by the Committee is
eligible to receive an Award.
IV. Plan
Administration
(a) Except
as otherwise determined by the Board, the Plan shall be
administered by the Committee. The Committee shall periodically
make determinations with respect to the participation of Employees,
officers, directors and consultants in the Plan and, except as
otherwise required by law or this Plan, the grant terms of Awards,
including vesting schedules, price, restriction or option periods,
dividend rights, post-retirement and termination rights, payment
alternatives such as cash, stock, contingent awards or other means
of payment consistent with the purposes of this Plan, and such
other terms and conditions as the Board or the Committee deems
appropriate which shall be contained in an Award Agreement with
respect to a Participant.
(b) The
Committee shall have authority to interpret and construe the
provisions of the Plan and any Award Agreement and make
determinations pursuant to any Plan provision or Award Agreement
which shall be final and binding on all persons. No member of the
Committee shall be liable for any action or determination made in
good faith, and the members shall be entitled to indemnification
and reimbursement in the manner provided in the Corporation’s
Certificate of Incorporation, as it may be amended from time to
time.
(c) The
Committee shall have the authority at any time to provide for the
conditions and circumstances under which Awards shall be
forfeited. The Committee shall have the authority to
accelerate the vesting of any Award and the times at which any
Award becomes exercisable.
(d) The
Committee may delegate to one (1) or more Officers the authority to
do one or both of the following (i) designate Employees who are not
Officers to be recipients of stock options (and, to the extent
permitted by applicable law, other Awards) and the terms thereof,
and (ii) determine the number of shares of Common Stock to be
subject to such Awards granted to such Employees; provided,
however , that the Committee resolutions
regarding such delegation shall specify the total number of shares
of Common Stock that may be subject to the Awards granted by such
Officer and that such Officer may not grant an Award to himself or
herself. Notwithstanding the foregoing, the Committee
may not delegate authority to an Officer to determine the Fair
Market Value.
V. Capital
Stock Subject to the Provisions of this Plan
(a) The
capital stock subject to the provisions of this Plan shall be
shares of authorized but unissued Common Stock and shares of Common
Stock held as treasury stock. Subject to (i) adjustment
in accordance with the provisions of Section X, and (ii) Sections
V(b) and (c) below, the total number of shares of Common Stock
available for grants of Awards shall not exceed
1,000,000.
(b) The
grant of a restricted share Award shall be deemed to be equal to
the maximum number of shares which may be issued under the Award.
Awards payable only in cash will not reduce the number of shares
available for Awards granted under the Plan.
(c) There
shall be carried forward and be available for Awards under the
Plan, in addition to shares available for grant under paragraph (a)
of this Section V, all of the following: (i) any unused portion of
the limit set forth in paragraph (a) of this Section V; (ii) shares
represented by the portion of any Awards which are cancelled,
forfeited, surrendered, terminated, paid in cash (including shares
used to satisfy the exercise price of an option or which are
reacquired by the Corporation to satisfy any tax withholding
obligations under Section VIII(f) below) or expire unexercised; and
(iii) the excess amount of variable Awards which become fixed at
less than their maximum limitations.
VI. Awards
Under This Plan
A.
Discretionary Awards. As the Board or Committee
may determine, the following types of Awards and other Common
Stock-based Awards may be granted under this Plan on a stand alone,
combination or tandem basis:
(a)
Stock Option . A right to buy a specified number of shares
of Common Stock at a fixed e
