ELITE FX,
INC.
INCENTIVE STOCK
PLAN
1. Purpose. The Elite FX, Inc. Incentive Stock Plan (the
"Plan"), being assumed and adopted by Elite FX, Inc., a Florida
corporation, is intended to provide incentives which will attract
and retain highly competent persons at all levels as employees of
Elite FX, Inc. and its subsidiaries (the "Company"), as well as
independent contractors providing consulting or advisory services
to the Company, by providing them opportunities to acquire the
Company's common stock ("Common Shares") or to receive monetary
payments based on the value of such shares pursuant to the Awards
described in Paragraph 4 below.
2. Administration.
(a) The Plan will be administered by a Compensation Committee
(the "Committee") appointed by the Board of Directors (the "Board")
of the Company from among its members; provided, however, that, as
long as Common Shares are registered under the Securities Exchange
Act of 1933 (the "Act"), members of the Committee must qualify as
"non-employee directors" within the meaning of Securities and
Exchange Commission Regulation ss. 240.16b-3. Once appointed, the
Committee shall continue to serve until otherwise directed by the
Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution
therefor, and fill vacancies however caused; provided, however,
that at no time shall a Committee of less than two members of the
Board administer the Plan. The Committee is authorized, subject to
the provisions of the Plan, to establish such rules and regulations
as it deems necessary for the proper administration of the Plan and
to make such determinations and interpretations and to take such
action in connection with the Plan and any Awards (as hereinafter
defined) granted hereunder as it deems necessary or advisable. All
determinations and interpretations made by the Board and Committee
shall be binding and conclusive on all participants and their legal
representatives. No member of the Board, no member of the Committee
and no employee of the Company shall be liable for any act or
failure to act hereunder, by any other member or employee or by any
agent to whom duties in connection with the administration of this
Plan have been delegated or, except in circumstances involving such
person's bad faith, gross negligence or fraud, for any act or
failure to act by the member or employee.
(b) Pursuant to its administrative duties described in Section
2(a) above and notwithstanding anything to the contrary contained
herein, the Compensation Committee may, by a resolution adopted at
a meeting of the Compensation Committee duly convened and called or
by a unanimous written consent in lieu of a meeting, delegate to
the persons or persons who serve as Chief Executive Officer of the
Company the authority to determine the identities of employees who
are not officers or directors of the Company who shall receive
Stock Options under the Plan and the terms, conditions, limitations
and restrictions upon which such Stock Options shall be granted;
provided, however, that the per share exercise price of any Stock
Option awarded by the Chief Executive Officer of the Company
pursuant to any delegation of authority permitted hereunder shall
not be less than the Fair Market Value (as hereinafter defined) of
the
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Common Shares on the date the Stock Option is granted. The terms
and conditions of, and any limitation or restriction on, any such
delegation shall be at the sole discretion of the Compensation
Committee and shall be set forth in the resolution of the
Compensation Committee establishing such delegation. Any delegation
pursuant to this Section 2(b) may be revoked by the Compensation
Committee at any time.
3. Participants. Participants will consist of such
employees or prospective employees (conditioned upon, and effective
not earlier than his becoming an employee) of the Company, and
independent contractors (including persons other than individuals)
providing consulting or advisory services to the Company, as the
Committee in its sole discretion determines to be responsible for
the success and future growth and profitability of the Company and
whom the Committee may designate from time to time to receive
Awards under the Plan. Designation of a participant in any year
shall not require the Committee to designate such person to receive
an Award in any other year or, once designated, to receive the same
type or amount of Awards as granted to the participant in any year.
The Committee shall consider such factors as it deems pertinent in
selecting participants and in determining the type and amount of
their respective Awards.
4. Types of Awards. Awards under the Plan may be granted
in any one or a combination of (a) Stock Options, (b) Stock
Appreciation Rights, (c) Stock Awards, (d) Performance Shares, and
(e) Performance Units, all as described below (collectively
"Awards").
5. Shares Reserved under the Plan. Subject to the
following provisions of this Section 5, there is hereby reserved
for issuance under the Plan an aggregate of 600,000 Common Shares,
which may be authorized but unissued shares. Any shares subject to
Stock Options or Stock Appreciation Rights or issued under such
options or rights or as Stock Awards may thereafter be subject to
new options, rights or awards under this Plan if there is a lapse,
expiration or termination of any such options or rights prior to
issuance of the shares or the payment of the equivalent or if
shares are issued under such options or rights or as such awards
and thereafter are reacquired by the Company pursuant to rights
reserved by the Company upon issuance thereof.
6. Stock Options. Stock Options will consist of awards
from the Company, in the form of agreements, which will enable the
holder to purchase a specific number of Common Shares, at set terms
and at a fixed purchase price. Stock Options may be "incentive
stock options" ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") or Stock Options which do not constitute Incentive Stock
Options ("Nonqualified Stock Options"). The Committee will have the
authority to grant to any participant one or more Incentive Stock
Options, Nonqualified Stock Options, or both types of Stock Options
(in each case with or without Stock Appreciation Rights). Each
Stock Option shall be subject to such terms and conditions
consistent with the Plan as the Committee may impose from time to
time, subject to the following limitations:
(a ) Exercise Price . Each Stock Option granted hereunder
shall have such per-share exercise price as the Committee may
determine at the date of grant provided, however, that the
per-share exercise price for Incentive Stock Options shall not be
less than 100% of the Fair Market Value (as hereinafter defined) of
the Common Shares on the date the option is granted.
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(b) Payment of Exercise Price . The option exercise price
may be paid by cash, or upon approval from the Committee in its
sole discretion, broker-assisted cashless exercise, net-share
exercise, delivery of Common Shares of the Company then owned by
the participant, or by promissory note, with additional approval
from the Board or the CEO. Notwithstanding any contrary provision,
the Committee may require that payment by any method other than
cash may be made only if such payment does not result in a charge
to earnings for financial accounting purposes as determined by the
Committee. Net-cash exercises are not permitted under the Plan.
A broker-assisted cashless exercise involves the simultaneous
exercise by an employee of a share option and sale of sufficient
Common Shares through a broker to cover the payment and any
necessary withholding. Broker-assisted cashless exercise is
typically only available if the Common Shares are readily tradeable
on a national securities exchange or other market system at the
time of option exercise. Payment in a broker-assisted exercise is
made by delivering a properly executed exercise notice to the
Company together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or
loan proceeds to pay the exercise price. To facilitate the
foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms. In a net-share
exercise, the Company holds back from the Common Shares to be
issued upon exercise of an option that number of Commons Shares
having a value (based on the previous business day's closing price)
equal to the minimum amount required to satisfy the exercise price
and any necessary withholding, unless the Company determines that
such taxes must be in cash by the holder.
(c) Exercise Period . Stock Options granted under the
Plan will be exercisable at such times and subject to such terms
and conditions as shall be determined by the Committee. In
addition, Nonqualified Stock Options shall not be exercisable later
than fifteen (15) years after the date they are granted and
Incentive Stock Options shall not be exercisable later than ten
(10) years after the date they are granted. All Stock Options shall
terminate at such earlier times and upon such conditions or
circumstances as the Committee shall in its discretion set forth in
such option at the date of grant.
(d) Limitations on Incentive Stock Options . Incentive
Stock Options may be granted only to participants who are employees
of the Company or one of its subsidiaries (within the meaning of
Section 424(f) of the Code) at the date of grant. The aggregate
Fair Market Value (determined as of the time the option is granted)
of the Common Shares with respect to which Incentive Stock Options
are exercisable for the first time by a participant during any
calendar year (under all option plans of the Company) shall not
exceed $100,000. Incentive Stock Options may not be granted to any
participant who, at the time of grant, owns stock possessing (after
the application of the attribution rules of Section 424(d) of the
Code) more than 10% of the total combined voting power of all
classes of stock of the Company, unless the option price is fixed
at not less than 110% of the Fair Market Value of the Common Shares
on the date of grant and the exercise of such option is prohibited
by its terms after the expiration of five years from the date of
grant of such option.
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(e) Re-designation as Nonqualified Stock Options .
Options designated as Incentive Stock Options that fail to continue
to meet the requirements of Section 422 of the Code shall be
re-designated as Nonqualified Stock Options for Federal income tax
purposes automatically without further action by the Committee on
the date of such failure to continue to meet the requirements of
Section 422 of the Code.
(f) Limitation of Rights in Shares . The recipient of a
Stock Option shall not be deemed for any purpose to be a
shareholder of the Company with respect to any of the shares
subject thereto except to the extent that the Stock Option shall
have been exercised and, in addition, a certificate shall have been
issued and delivered to the participant.
7. Stock Appreciation Rights. The Committee may, in its
discretion, grant Stock Appreciation Rights to the holders of any
Stock Options granted hereunder. In addition, Stock Appreciation
Rights may be granted independently of and without relation to
Stock Options. Each Stock Appreciation Right shall be subject to
such terms and conditions consistent with the Plan as the Committee
shall impose from time to time, including the following:
(a) A Stock Appreciation Right relating to a Nonqualified Stock
Option may be made part of such option at the time of its grant or
at any time thereafter up to six months prior to its expiration,
and a Stock Appreciation Right relating to an Incentive Stock
Option may be made part of such option only at the time of its
grant.
(b) Each Stock Appreciation Right will entitle the holder to
elect in lieu of exercising the Stock Option to receive the
appreciation in the Fair Market Value of the shares subject thereto
up to the date the right is exercised. In the case of a right
issued in relation to a Stock Option, such
