| (a) |
"Compensation"
means, for the purpose of any Offering (as hereinafter defined) pursuant
to this Plan, base pay in effect as of the Offering Commencement Date
(as
hereinafter defined). Compensation shall not include any deferred
compensation other than contributions by an individual through a salary
reduction agreement to a cash or deferred plan pursuant to Section
401(k)
of the Code or to a cafeteria plan pursuant to Section 125 of the
Code.
|
| (b) |
"Board"
means the Board of Directors of the
Company.
|
| (c) |
"Common
Stock" means the common stock, $0.10 par value per share, of the
Company.
|
| (d) |
"Company"
shall also include any Parent or Subsidiary of Implant Sciences
Corporation designated by the Board of Directors of the Company (the
"Board").
|
| (e) |
"Employee"
means any person who is customarily employed at least 20 hours per
week
and more than five months in a calendar year by the
Company.
|
| (f) |
“Offering
commencement date” means January 1 or July
1.
|
| (g) |
“Offering
termination date” means June 30 for a January 1 offering commencement date
or December 31 for a July 1 offering commencement
date.
|
| (h) |
"Parent"
shall mean any present or future corporation which is or would constitute
a "parent corporation" as that term is defined in Section 424 of the
Code.
|
| (i) |
"Plan
Administrator" shall consist of the Board or, if appointed by the Board,
a
committee consisting of at least two Outside Directors who shall be
members of the Board, but who are not employees of the Company or of
any
parent or subsidiary of the Company.
|
| (j) |
"Subsidiary"
shall mean any present or future corporation which is or would constitute
a "subsidiary corporation" as that term is defined in Section 424 of
the
Code.
|
| (a) |
Participation
in the Plan is completely voluntary. Participation in any one or more
of
the Offerings under the Plan shall neither limit, nor require,
participation in any other Offering.
|
| (b) |
Each
Employee shall be eligible to participate in the Plan on the first
Offering Commencement Date, as hereinafter defined, following the
completion of one year of continuous service with the Company.
Notwithstanding the foregoing, no Employee shall be granted an option
under the Plan:
|
| (i) |
if,
immediately after the grant, such Employee would own stock, and/or
hold
outstanding options to purchase stock, possessing 5% or more of the
total
combined voting power or value of all classes of stock of the Company
or
any Parent or Subsidiary; for purposes of this Paragraph the rules
of
Section 424(d) of the Code shall apply in determining stock ownership
of
any Employee; or
|
| (ii) |
which
permits such Employee's rights to purchase stock under all Section
423
employee stock purchase plans of the Company and any Parent or Subsidiary
to accrue at a rate that exceeds $25,000 of the fair market value of
the
stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding; for purposes of this Paragraph,
the rules of Section 423(b)(8) of the Code shall
apply.
|
| (a) |
At
the time a participant files his authorization for a payroll deduction,
he
shall elect to have deductions made from his pay on each payday during
any
Offering in which he is a participant at a specified percentage of
his
Compensation as determined on the applicable Offering Commencement
Date;
said percentage shall be in increments of one percent up to a maximum
percentage of ten percent.
|
| (b) |
Payroll
deductions for a participant shall commence on the applicable Offering
Commencement Date when his authorization for a payroll deduction becomes
effective and subject to the last sentence of Paragraph 5 shall end
on the
Offering Termination Date of the Offering to which such authorization
is
applicable unless sooner terminated by the participant as provided
in
Paragraph 10.
|
| (c) |
All
payroll deductions made for a participant shall be credited to his
account
under the Plan. A participant may not make any separate cash payment
into
such account.
|
| (d) |
A
participant may withdraw from the Plan at any time during the applicable
Offering period.
|
| (a) |
On
the Offering Commencement Date of each Offering, a participating Employee
shall be deemed to have been granted an option to purchase a maximum
number of shares of the Common Stock equal to an amount determined
as
follows: 85% of the market value per share of the Common Stock on the
applicable Offering Commencement Date shall be divided into an amount
equal to the percentage of the Employee's Compensation which he has
elected to have withheld (but no more than 10%) multiplied by the
Employee's Compensation over the Offering period. Such market value
per
share of the Common Stock shall be determined as provided in clause
(i) of
Paragraph 7(b).
|
| (b) |
The
option price of the Common Stock purchased with payroll deductions
made
during each such Offering for a participant therein shall be the lower
of:
|
| (i) |
85%
of the closing price per share on the Offering Commencement Date as
reported by a nationally recognized stock exchange, or, if the Common
Stock is not listed on such an exchange, as reported by the National
Association of Securities Dealers Automated Quotation System ("Nasdaq")
National Market System or, if the Common Stock is not listed on the
Nasdaq
National Market System but is otherwise publicly traded over-the-counter,
85% of the mean of the bid and asked prices per share on the Offering
Commencement Date or, if the Common Stock is not traded over-the-counter,
85% of the fair market value on the Offering Commencement Date as
determined by the Plan Administrator; and
|
| (ii) |
85%
of the closing price per share on the Offering Termination Date as
reported by a nationally recognized stock exchange, or, if the Common
Stock is not listed on such an exchange, as reported by the Nasdaq
National Market System or, if the Common Stock is not listed on the
Nasdaq
National Market System but is otherwise publicly traded over-the-counter,
85% of the mean of the bid and asked prices per share on the Offering
Termination Date or, if the Common Stock is not traded over-the-counter,
85% of the fair market value on the Offering Termination Date as
determined by the Plan Administrator.
|
| (a) |
Unless
a participant gives written notice to the Treasurer of the Company
as
hereinafter provided, his option for the purchase of Common Stock with
payroll deductions made during any Offering will be deemed to have
been
exercised automatically on the Offering Termination Date applicable
to
such Offering for the purchase of the number of full shares of Common
Stock which the accumulated payroll deductions in his account at that
time
will purchase at the applicable option price (but not in excess of
the
number of shares for which options have been granted the Employee pursuant
to Paragraph 7(a) and any pro rata allocation to such participant under
Paragraph 12(a)), and any excess in his account at that time, other
than
amounts representing fractional shares, will be returned to
him.
|
| (b) |
Fractional
shares will not be issued under the Plan and any accumulated payroll
deductions which would have been used to purchase fractional shares
shall
be automatically carried forward to the next Offering unless the
participant elects, by written notice to the Treasurer of the Company,
to
have the excess cash returned to him.
|
| (a) |
Prior
to the Offering Termination Date for an Offering, any participant may
withdraw the payroll deductions credited to his account under the Plan
for
such Offering by giving written notice to the Treasurer of the Company.
All of the participant's payroll deductions credited to such account
will
be paid to him promptly after receipt of notice of withdrawal, without
interest, and no future payroll deductions will be made from his pay
during such Offering. The Company will treat any attempt to borrow
by a
participant on the security of accumulated payroll deductions as an
election to withdraw such deductions.
|
| (b) |
Except
as set forth in Paragraph 6(d), a participant's election not to
participate in, or withdrawal from, any Offering will not have any
effect
upon his eligibility to participate in any succeeding Offering or in
any
similar plan which may hereafter be adopted by the
Company.
|
| (c) |
Upon
termination of the participant's employment for any reason, including
retirement but excluding death, the payroll deductions credited to
his
account will be returned to him, or, in the case of his death, to the
person or persons entitled thereto under Paragraph
14.
|
| (d) |
Upon
termination of the participant's employment because of death, his
beneficiary (as defined in Paragraph 14) shall have the right to elect,
by
written notice given to the Company's Treasurer prior to the expiration
of
a period of 90 days commencing with the date of the death of the
participant, either:
|
| (i) |
to
withdraw all of the payroll deductions credited to the participant's
account under the Plan; or
|
| (ii) |
to
exercise the participant's option for the purchase of stock on the
Offering Termination Date next following the date of the participant's
death for the purchase of the number of full shares which the accumulated
payroll deductions in the participant's account at the date of the
participant's death will purchase at the applicable option price (subject
to the limitation contained in Paragraph 7(a)), and any excess in such
account will be returned to said beneficiary. In the event that no
such
written notice of election shall be duly received by the Company's
Treasurer, the beneficiary shall automatically be deemed to have elected
to withdraw the payroll deductions credited to the participant's account
at the date of the participant's death and the same will be paid promptly
to said beneficiary.
|
| (a) |
The
maximum number of shares of Common Stock available for issuance and
purchase by Employees under the Plan, subject to adjustment upon changes
in capitalization of the Company as provided in Paragraph 17, shall
be
500,000 shares of Common Stock. If the total number of shares for which
options are exercised on any Offering Termination Date in accordance
with
Paragraph 8 exceeds the maximum number of shares for the applicable
Offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in an equitable manner, and
the
balances of payroll deductions credited to the account of each participant
under the Plan shall be returned to the participant.
|
| (b) |
The
participant will have no interest in stock covered by his option until
such option has been exercised.
|