THE CENTER FOR WOUND
HEALING, INC.
2006 STOCK OPTION
PLAN
As Amended and Restated July
21, 2008
1. Purpose . The purpose of this Plan is to advance the
interests of The Center for Wound Healing, Inc., a Nevada
corporation (the “Company”), by providing an additional
incentive to attract, retain and motivate highly qualified and
competent persons who are key to the Company, including key
employees, consultants, independent contractors, Officers and
Directors, and upon whose efforts and judgment the success of the
Company and its Subsidiaries is largely dependent, by authorizing
the grant of options to purchase Common Stock of the Company, and
other equity-based awards, to persons who are eligible to
participate hereunder, thereby encouraging stock ownership in the
Company by such persons, all upon and subject to the terms and
conditions of this Plan.
2. Definitions . As used herein, the following terms shall have
the meanings indicated:
(a) “Board” shall mean the Board of
Directors of the Company.
(b) “Cause” shall mean any of the
following:
(i) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the
Optionee to perform his or her duties as an employee of the
Company;
(ii) a determination by the Company that there has
been a willful breach by the Optionee of any of the material terms
or provisions of any employment agreement between such Optionee and
the Company;
(iii) any conduct by the Optionee that either results
in his or her conviction of a felony under the laws of the United
States of America or any state thereof, or of an equivalent crime
under the laws of any other jurisdiction;
(iv) a determination by the Company that the
Optionee has committed an act or acts involving fraud,
embezzlement, misappropriation, theft, breach of fiduciary duty or
material dishonesty against the Company, its properties or
personnel;
(v) any act by the Optionee that the Company
determines to be in willful or wanton disregard of the
Company’s best interests, or which results, or is intended to
result, directly or indirectly, in improper gain or personal
enrichment of the Optionee at the expense of the
Company;
(vi) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the
Optionee to comply with any rules, regulations, policies or
procedures of the Company, or that the Optionee has engaged in any
act, behavior or conduct demonstrating a deliberate and material
violation or disregard of standards of behavior that the Company
has a right to expect of its employees; or
(vii) if the Optionee, while employed by the Company
and for two years thereafter, violates a confidentiality and/or
noncompete agreement with the Company, or fails to safeguard,
divulges, communicates, uses to the detriment of the Company or for
the benefit of any person or persons, or misuses in any way, any
Confidential Information; provided, however, that, if the
Optionee has entered into a written employment agreement with the
Company which remains effective and which expressly provides for a
termination of such Optionee’s employment for
“cause,” the term “Cause” as used herein
shall have the meaning as set forth in the Optionee’s
employment agreement in lieu of the definition of
“Cause” set forth in this Section 2(b).
(c) “Change of Control” shall mean the
acquisition by any person or group (as that term is defined in the
Exchange Act, and the rules promulgated pursuant to that act) in a
single transaction or a series of transactions of forty-five
percent (45%) or more in voting power of the outstanding stock
of the Company and a change of the composition of the Board so
that, within two years after the acquisition took place, a majority
of the members of the Board, or the board of directors of any
corporation with which the Company may be consolidated or merged,
are persons who were not directors or officers of the Company or
one of its Subsidiaries immediately prior to the acquisition, or to
the first of a series of transactions which resulted in the
acquisition of forty-five percent (45%) or more in voting
power of the outstanding stock of the Company.
(d) “Code” shall mean the Internal
Revenue Code of 1986, as amended.
(e) “Committee” shall mean a committee
of the Board comprised of at least two members appointed by the
Board. Each Committee member shall be a “non-employee
director” within the meaning of the exemption under Rule
16b-3 of the Exchange Act and an “outside director”
within the meaning of Section 162(m) of the Code.
(f) “Common Stock” shall mean the
Company’s Common Stock, par value $.001 per share.
(g) “Director” shall mean a member of
the Board.
(h) “Employee” shall mean any person,
including officers, employed by the Company or any parent or
Subsidiary of the Company, and any director, consultant or
independent contractor of the Company or any parent or Subsidiary
of the Company.
(i) “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.
(j) “Fair Market Value” of a Share on
any date of reference shall be the Closing Price of a share of
Common Stock on the business day immediately preceding such date,
unless the Committee in its sole discretion shall determine
otherwise in a fair and uniform manner. For this purpose, the
“Closing Price” of the Common Stock on any business day
shall be (i) if the Common Stock is listed or admitted for
trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated
transaction reporting system, the last reported sale price of the
Common Stock on such exchange or reporting system, as reported in
any newspaper of general circulation, (ii) if the Common Stock
is quoted on The Nasdaq Stock Market (“Nasdaq”), or any
similar system of automated dissemination of quotations of
securities prices in common use, the mean between the closing high
bid and low asked quotations for such day of the Common Stock on
such system, or (iii) if neither clause (i) nor
(ii) is applicable, the mean between the high bid and low
asked quotations for the Common Stock as reported by any
over-the-counter market or quotation service if at least two
securities dealers have inserted both bid and asked quotations for
the Common Stock on at least five of the 10 preceding days. If the
information set forth in clauses (i) through (iii) above
is unavailable or inapplicable to the Company (e.g., if the
Company’s Common Stock is not then publicly traded or
quoted), then the “Fair Market Value” of a Share shall
be the fair market value (i.e., the price at which a willing seller
would sell a Share to a willing buyer when neither is acting under
compulsion and when both have reasonable knowledge of all relevant
facts) of a share of the Common Stock on the business day
immediately preceding such date as the Committee in its sole and
absolute discretion shall determine in a fair and uniform
manner.
(k) “Incentive Stock Option” shall mean
an incentive stock option as defined in Section 422 of the
Code.
(l) “Non-Statutory Stock Option” or
“Nonqualified Stock Option” shall mean an Option which
is not an Incentive Stock Option.
(m) “Officer” shall mean the
Company’s chairman, president, principal financial officer,
principal accounting officer (or, if there is no such accounting
officer, the controller), any vice-president of the Company in
charge of a principal business unit, division or function (such as
sales, administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar
policy-making functions for the Company. Officers of Subsidiaries
shall be deemed Officers of the Company if they perform such
policy-making functions for the Company. As used in this paragraph,
the phrase “policy-making function” does not include
policy-making functions that are not significant. Unless specified
otherwise in a resolution by the Board, an “executive
officer” pursuant to Item 401(b) of Regulation S-K (17
C.F.R. § 229.401(b)) shall be only such person designated as
an “Officer” pursuant to the foregoing provisions of
this paragraph.
(n) “Option” (when capitalized) shall
mean any stock option granted under this Plan.
(o) “Optionee” shall mean a person to
whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan by reason of
the death of such person.
(p) “Plan” shall mean this 2006 Stock
Option Plan of the Company.
(q) “Share” or “Shares”
shall mean a share or shares, as the case may be, of the Common
Stock, as adjusted in accordance with Section 10 of this
Plan.
(r) “Subsidiary” shall mean any
corporation (other than the Company) in any unbroken chain of
corporations beginning with the Company if, at the time of the
granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
3. Shares and Options . Subject to adjustment in accordance with
Section 10 hereof, the Company may issue up to seven million
five hundred thousand (7,500,000) Shares from Shares held in the
Company’s treasury or from authorized and unissued Shares
through the exercise of Options or stock appreciation rights or the
issuance of restricted stock awards issued pursuant to the
provisions of this Plan, and no more than such number of Shares may
be issued through the exercise of Incentive Stock Options. If any
Option or other award granted under this Plan shall terminate,
expire, or be canceled, forfeited or surrendered as to any Shares,
the Shares relating to such lapsed Option or other award shall be
available for issuance pursuant to new Options or other awards
subsequently granted under this Plan. Upon the grant of any Option
or other award hereunder, the authorized and unissued Shares to
which such Option or other award relates shall be reserved for
issuance to permit exercise under this Plan. Subject to the
provisions of Section 14 hereof, an Option granted hereunder
shall be either an Incentive Stock Option or a Non-Statutory Stock
Option as determined by the Committee at the time of grant of such
Option and shall clearly state whether it is an Incentive Stock
Option or Non-Statutory Stock Option. All Incentive Stock Options
shall be granted within 10 years from the initial adoption of the
Plan by the board of directors of Kevcorp Services, Inc. (prior to
this amendment and restatement).
4. Limitations . Options otherwise qualifying as Incentive
Stock Options hereunder will not be treated as Incentive Stock
Options to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the Shares, with
respect to which Options meeting the requirements of Code
Section 422(b) are exercisable for the first time by any
individual during any calendar year (under all stock option or
similar plans of the Company and any Subsidiary), exceeds
$100,000.
5. Conditions for Grant of Options
.
(a) Each Option shall be evidenced by an option
agreement that may contain any term deemed necessary or desirable
by the Committee, provided such terms are not inconsistent with
this Plan or any applicable law. Optionees shall be those persons
selected by the Committee from eligible Employees; provided that
Incentive Stock Options only may be granted to employees of the
Company, a Subsidiary or parent corporation (within the meaning of
Code Section 424(e)) of the Company. No Employee may be granted in
any calendar year Options to purchase more than one million five
hundred thousand (1,500,000) Shares. Any person who files with the
Committee, in a form satisfactory to the Committee, a written
waiver of eligibility to receive any Option under this Plan shall
not be eligible to receive any Option under this Plan for the
duration of such waiver.
(b) In granting Options, the Committee shall take
into consideration the contribution the person has made, or is
expected to make, to the success of the Company or its Subsidiaries
and such other factors as the Committee shall determine. The
Committee also shall have the authority to consult with and receive
recommendations from Officers and other personnel of the Company
and its Subsidiaries with regard to these matters. The Committee
may from time to time in granting Options under this Plan prescribe
such terms and conditions concerning such Options as it deems
appropriate; provided that such terms and conditions are not more
favorable to an Optionee than those expressly permitted herein;
provided further, however, that to the extent not cancelled
pursuant to Section 9(b) hereof, upon a Change of Control, any
Options that have not yet vested, may, in the sole discretion of
the Committee, vest upon such Change of Control.
(c) The Options granted to employees under this
Plan shall be in addition to regular salaries, pension, life
insurance or other benefits related to their employment with the
Company or its Subsidiaries. Neither this Plan nor any Option (or
other award) granted under this Plan shall confer upon any person
any right to employment or continuance of employment (or related
salary and benefits) by the Company or its Subsidiaries.
6. Exercise Price . The exercise price per Share of any Option
shall be any price determined by the Committee but