UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-
5(d)(2)
[ X ] Definitive Information Statement
K-9 CONCEPTS, INC.
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(Name of Registrant as Specified In Its Chapter)
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[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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TABLE OF CONTENTS
TABLE OF CONTENTS
INFORMATION STATEMENT ........................................................3
OUTSTANDING SHARES AND VOTING RIGHTS .........................................4
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON .....5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ...............6
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 .........6
ACTION TO BE TAKEN: ADOPTION OF THE K-9 CONCEPTS, INC. 2008 LONG-TERM STOCK
INCENTIVE PLAN ...............................................................7
ADDITIONAL INFORMATION ......................................................13
APPENDIX A - 2008 LONG-TERM STOCK INCENTIVE PLAN ............................14
K-9 CONCEPTS, INC.
RM0933, 9/F., Block C, Harbourfront Horizon
Hung Hom Bay, 8 Hung Luen Road
Kowloon, Hong Kong
852-6622-3666
INFORMATION STATEMENT
This information statement, pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended, and Regulation 14C and Schedule 14C there
under (the "Information Statement ") will be mailed on or about March 18, 2008
to the stockholders of record as of March 17, 2008 (the "Record Date ") of K-9
Concepts, Inc. in connection with certain actions to be taken pursuant to the
written consent of the stockholders of the Company holding a majority of the
outstanding shares of common stock, dated as of March 17, 2008.
The actions to be taken pursuant to the written consent shall be taken on
or about April 7, 2008, 20 days after the mailing of this information
statement.
THIS IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO
STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
Date: March 17, 2008 By Order of the Board of Directors,
/s/ Albert Au
---------------------------------------
Albert Au
President and Chief Executive Officer
NOTICE OF ACTION TO BE TAKEN PURSUANT TO THE WRITTEN CONSENT OF STOCKHOLDERS
HOLDING A MAJORITY OF THE OUTSTANDING CAPITAL STOCK IN LIEU OF A SPECIAL
MEETING OF THE STOCKHOLDERS, DATED MARCH 17, 2008.
TO THE STOCKHOLDERS OF K-9 CONCEPTS, INC.:
NOTICE IS HEREBY GIVEN to the stockholders of record of K-9 Concepts, Inc.
("our", "we" or the "Company") as of the close of business on the record date,
March 14, 2008 (the "Record Date"), that our board of directors (the Board")
has recommended, and that the holders of a majority of the voting power of
our outstanding common stock voted on March 17, 2008, to approve the adoption
of our 2008 Long-Term Stock Incentive Plan (the "Plan"), which Plan is designed
for the benefit of our employees, directors and consultants, and the employees,
directors and consultants of our affiliates.
None of our officers, directors, nominees for director (other than with
respect to elections for office), or any of their respective affiliates has any
interest in the matter to be acted upon, except as set forth in this
Information Statement.
Pursuant to Section 14 of the Securities Exchange Act of 1934, as amended,
and Regulation 14C and Schedule 14C thereunder, and the provisions of the
Nevada Revised Statutes, the above-mentioned corporate actions will become
effective on or after April 7, 2008, or twenty days (20) after this Information
Statement is first mailed to our stockholders.
As of the Record Date, 36,600,000 shares of our common stock were issued
and outstanding. Each share of common stock entitles the holder to one vote on
all matters brought before the common stockholders. The holders of a majority
of the issued and outstanding shares of our common stock voted for the approval
of the above-mentioned actions.
We will bear the entire cost of furnishing this Information Statement. We
will request brokerage houses, nominees, custodians, fiduciaries and other like
parties to forward this Information Statement to the beneficial owners of our
common stock held of record by them.
OUTSTANDING SHARES AND VOTING RIGHTS
As of the Record Date, the Company's authorized capitalization consisted of
100,000,000 shares of common stock (the "Common Stock"), of which 36,600,000
shares were issued and outstanding.
Each share of Common Stock entitles its holder to one vote on each matter
submitted to the stockholders. However, because stockholders holding at least a
majority of the voting rights of all outstanding shares of capital stock as at
the Record Date have voted in favor of the foregoing proposals by resolution
dated March 17, 2008 and having sufficient voting power to approve such
proposals through their ownership of capital stock, no other stockholder
consents will be solicited in connection with this Information Statement.
Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as
amended, the proposals will not be adopted until a date at least 20 days after
the date on which this Information Statement has been mailed to the
stockholders. The Company anticipates that the actions contemplated herein will
be effected on or about April 7, 2008.
The Company has asked brokers and other custodians, nominees and
fiduciaries to forward this Information Statement to the beneficial owners of
the Common Stock held of record by such persons and
will reimburse such persons for out-of-pocket expenses incurred in forwarding
such material.
Distributions and Costs
We will pay all costs associated with the distribution of this Information
Statement, including the costs of printing and mailing. We will only deliver
one Information Statement to multiple security holders sharing an address,
unless we have received contrary instructions from one or more of the security
holders. Also, we will promptly deliver a separate copy of this Information
Statement and future stockholder communication documents to any security holder
at a shared address to which a single copy of this Information Statement was
delivered, or deliver a single copy of this Information Statement and future
stockholder communication documents to any security holder or holders sharing
an address to which multiple copies are now delivered, upon written request to
us at our address noted above.
Security holders may also address future requests regarding delivery of
information statements and annual reports by contacting us at our address noted
above.
No Dissenters' Rights
The Nevada Revised Statutes do not provide for dissenter's rights in
connection with any of the actions described in this Information Statement, and
we will not provide shareholders with any such right independently.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION
TO MATTERS TO BE ACTED UPON
Except as disclosed elsewhere in this Information Statement, none of the
following persons has any substantial interest, direct or indirect, by security
holdings or otherwise (other than with respect to elections to office) in any
matter to be acted upon:
1. any of our directors or officers of our Company;
2. any proposed nominee for election as a director; and
3. any associate or affiliate of any of the foregoing persons.
The shareholdings of our directors and officers are listed below in the
section entitled "Security Ownership of Certain Beneficial Owners and
Management." To our knowledge, no director has advised us that he intends to
oppose the corporate actions described herein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the
beneficial ownership of the common stock as of March 14, 2008 by (a) each
stockholder who we know to own beneficially 5% or more of our outstanding
Common Stock; (b) all directors; (c) all nominees for director; (d) our
executive officers; and (d) all executive officers and directors as a group.
Except as otherwise indicated, all persons listed below have (i) sole
voting power and investment power with respect to their shares of common stock,
except to the extent that authority is shared by spouses under applicable law,
and (ii) record and beneficial ownership with respect to their shares of common
stock. The percentage of beneficial ownership is based upon 36,600,000 shares
of common stock outstanding as of March 14, 2008.
Name and address of beneficial owner Amount and Nature of Beneficial Ownership
Percent of class of common stock (1)
Albert Au 3,000,000 8.20%
President,
Chief Executive Officer
and Director
Rm 0933, 9/F., Block C
Harbourfront Horizon
Hung Hom Bay,
8 Hung Luen Road
Kowloon, Hong Kong
Jeanne Mok, 3,000,000 8.20%
Treasurer, Chief Financial
Officer and Director
G/F, 233 Wong Chuk Wan
Sai Kung, Hong Kong
ALL OFFICERS AND DIRECTORS 6,000,000 16.39%
AS A GROUP (2 PERSONS)
Craig Taplin 11,900,000 32.51%
477 Clifton Rd.
Kelowna, British Columbia
V1V-1A6
Canada
(1)Based on a total of 36,600,000 shares of common stock outstanding. In
accordance with Securities and Exchange Commission Rules, each person's
percentage interest is calculated by dividing the number of shares that
person beneficially owns by the sum of (a) the total number of shares
outstanding on March 14, 2008 plus (b) the number of shares such person
has the right to acquire within sixty (60) days of March 14, 2008.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that our directors and executive officers, and persons who own more than ten
percent (10%) of our outstanding common stock, file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock. Such persons are required by the SEC to
furnish us with copies of all such reports they file.
Specific due dates for such reports have been established by the SEC and
we are required to disclose any failure to file reports by such dates. We
believe that during the fiscal year ended August 31, 2007, each of Albert Au,
our President, Chief Executive Officer and director, and Jeanne Mok, our
Treasurer, Chief Financial Officer and director, failed to file a Form 3 or
Form 4, and our ten percent stockholders have failed to file a Form 3, and each
have therefore failed to comply with applicable Section 16(a) filing
requirements.
ACTION TO BE TAKEN: ADOPTION OF THE K-9 CONCEPTS, INC. 2008 LONG-TERM STOCK
INCENTIVE PLAN
PURPOSES OF THE 2008 PLAN
The 2008 Plan is intended to promote the best interests of K-9 Concepts,
Inc. and its stockholders by (i) assisting the Company and its Affiliates in
the recruitment and retention of persons with ability and initiative, (ii)
providing an incentive to such persons to contribute to the growth and success
of the Company's businesses by affording such persons equity participation
in the Company and (iii) associating the interests of such persons with those
of the Company and its Affiliates and stockholders.
GENERAL
On March 17, 2008, the Company's Board of Directors and the holders of a
majority of the voting power of our outstanding common stock voted to approve
the Company's 2008 Long Term Stock Incentive Plan (the "2008 Plan"). Under the
2008 Plan, the Board of Directors, the body authorized to implement, interpret
and administer the 2008 Plan, is authorized to grant Options, Stock Awards,
which includes Stock Bonus Awards, Restricted Stock Awards, Stock Appreciation
Rights and Deferred Shares, and Performance Shares, to "Participants" under the
2008 Plan. These awards are described below and are collectively referred to as
"Awards."
The following is a summary of the provisions of the 2008 Plan.
The benefits to be derived from the 2008 Plan by our officers and
directors, if any, are not quantifiable or determinable at this time.
Administration
The 2008 Plan shall be administered by either the Board or by a committee
(the "Committee") to which administration of the Plan, or of part of the Plan,
may be delegated by the Board (in either case, the "Administrator"). The
Committee shall consist of two (2) or more Directors who are (i) Non-Employee
Directors (within the meaning of Rule 16b-3 under the Exchange Act) for
purposes of exercising administrative authority with respect to Awards
granted to Eligible Persons who are subject to Section 16 of the Exchange Act;
(ii) to the extent required by the rules of the market on which the Company's
shares are traded or the exchange on which the Company's shares are listed,
"independent" within the meaning of such rules; and (iii) at such times as an
Award under this Plan by the Company is subject to Section 162(m) of the Code
(to the extent relief from the limitation of Section 162(m) of the Code is
sought with respect to Awards and administration of the Awards by a committee
of "outside directors" is required to receive such relief) "outside
directors" within the meaning of Section 162(m) of the Code.
Eligibility
Every person who at the date of grant is an employee, a Director or a
Consultant of the Company or of any Affiliate of the Company (as defined in the
2008 Plan) may be granted an Option (other than an Incentive Stock Option) to
purchase shares of common stock of the Company, a Stock Award, Restricted Stock
Award, Stock Appreciation Rights, Deferred Shares or Performance Shares (as
defined under the Plan). Incentive Stock Options may only be granted to
Employees of the Company, its Parent or Subsidiary.
A Consultant shall be eligible under the 2008 Plan only if the offer or
sale of the Company's
securities would be eligible for registration on Form S-8 Registration
Statement because of the identity and nature of the service provided by such
person, unless the Company determines that an offer or sale of the Company's
securities to such person will satisfy another exemption from the
registration under the Securities Act and complies with the securities laws of
all other jurisdictions applicable to such offer or sale.
The term "Director" refers to the members of the Board. The term
"consultant" means: (i) any person performing consulting or advisory services
for the Company or any Affiliate, or (ii) a director of an Affiliate.
Common Stock Subject to the 2008 Plan
The maximum aggregate number of shares of common stock that may be (i)
issued under the 2008 Plan pursuant to the exercise of Options, (ii) issued
pursuant to Stock Awards, (iii) covered by Stock Appreciation Rights and (iv)
covered by Performance Shares shall be limited to 15% of the shares of common
stock outstanding, which calculation shall be made on the first trading day of
a new fiscal year; provided that, in any year no more than 5% of the Common
Stock of the Company may be issued in any fiscal year, provided further that
the Committee may issue up to 10% of the Common Stock of the Company in the
Plan's first year. Common stock subject to the Plan shall include shares
forfeited in a prior year as provided in the 2008 Plan and for purposes of
determining the number of shares of common stock available under the 2008 Plan,
shares of common stock withheld by the Company to satisfy applicable tax
withholding obligations pursuant to Section 11 of the 2008 Plan shall be
deemed issued there under. However, no single participant may receive
more than 25% of the total shares awarded in any single year.
All issuances are also subject to other applicable provisions of the 2008
Plan.
Options
The Committee will designate each Eligible Person to whom an Option is to
be granted, and will specify the number of shares of Common Stock covered by
such Option. The Stock Option Agreement shall specify whether the Option is an
ISO or NQSO, the exercise price of the such Option, the vesting schedule
applicable to such Option, the expiration date of such Option, events of
termination of such Option, and any other terms of such Option. No Option that
is intended to be an ISO shall be invalid for failure to qualify as an ISO but
instead shall be deemed a NQSO.
Date of Grant of Option
The "Date of Grant" is the date that the Committee approves an Option
grant, provided that all terms of such grants, including the amount of shares,
the exercise price and vesting are determined at such time.
Option Price
The exercise price per share of Common Stock subject to an Option shall be
determined by the Committee, but shall comply with the following:
(i) The exercise price per share for Common Stock subject to an
Option (other than an ISO to a 10% shareholder) shall not be less than one
hundred percent (100%) of the Fair Market Value (as defined in the 2008
Plan) on the Date of Grant.
(ii) The exercise price per share for Common Stock subject to an ISO
granted to a Participant who is deemed to be a 10% shareholder on the Date
of Grant, shall not be less than one hundred ten percent (110%) of the
Fair Market Value on the Date of Grant.
"FAIR MARKET VALUE" means, on any given date, the current fair market value of
the shares of Common Stock as determined as follows:
(i) If the Common Stock is traded on a national securities
exchange, the closing price for the day of determination as quoted
on such market or exchange, including the NASDAQ Global Market or
NASDAQ Capital Market, or the OTC Bulletin Board, whichever is the
primary market or exchange for trading of the Common Stock or if no
trading occurs on such date, the last day on which trading occurred,
or such other appropriate date as determined by the Committee in its
discretion, as reported in The Wall Street Journal or such other
source as the Committee deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and the low asked
prices for the Common Stock for the day of determination; or
(iii) In the absence of an established market for the Common
Stock, Fair Market Value shall be determined by the Committee in
good faith.
Duration of Options
The maximum period during which an Option may be exercised is ten (10)
years from the date such Option was granted. In the case of an ISO that is
granted to a Participant who is or is deemed to be a Ten Percent Owner on the
date of grant, such Option shall not be exercisable after the expiration of
five (5) years from the date of grant.
Non-transferability of Options
Options granted under the 2008 Plan which are intended to be ISOs are
nontransferable except by will or by the laws of descent and distribution and
during the lifetime of the Participant are exercisable by only the Participant
to whom the ISO is granted.
Except to the extent transferability of NQSO is provided for in the Stock
Option Agreement or is approved by the Committee, during the lifetime of the
Participant to whom the NQSO is granted, such Option may be exercised only by
the Participant. If the Stock Option Agreement so provides or the Committee so
approves, a NQSO may be transferred by a Participant through a gift or domestic
relations order to the Participant's family members to the extent in compliance
with applicable securities laws and regulations and provided that such transfer
is not a transfer for value (within the meaning of applicable securities laws
and regulations). Any holder of a NQSO that was transferred pursuant to this
section of the 2008 Plan shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant.
In addition, no right or interest of a Participant in any Option shall be
liable for, or subject to, any lien, obligation, or liability of such
Participant.
Vesting
Options will vest as provided in the Stock Option Agreement.
No Rights as a Shareholder
A Participant shall have no rights as a stockholder of the Company with
respect to any Common Stock covered by an Option until the date of exercise and
the Company has issued the certificate for the Participant's shares of Common
Stock.
Notification to Company upon Disposition of an ISO
Participants are required to notify the Company of any sale or other
disposition of Common Stock acquired pursuant to an ISO if such sale or
disposition occurs within two years of the Date of Grant or within one year of
the issuance of the Common Stock. The Company may require that certificates
evidencing shares of Common Stock purchased upon the exercise of ISO be
endorsed with a restrictive legend.
Repricing of Options
The 2008 Plan provides that the Committee may not permit a Repricing of
any Option without the approval of the Company's Stockholders.
Stock Awards
The 2008 Plan also provides for four types of Stock Awards: Stock Bonus
Awards, Restricted Stock Awards, Stock Appreciation Rights and Deferred
Shares. Stock Bonus Awards, Restricted Stock Awards and Stock Appreciation
Rights may be granted by the Committee with such terms and conditions as the
Committee deems appropriate. These terms shall be set forth in each respective
Stock Award Agreement. The terms and conditions for Stock Bonus Awards,
Restricted Stock Awards and Stock Appreciate Rights may change from time to
time, with respect to each type of award, and from Participant to Participant
who receive each type of award, and the terms and conditions of separate awards
in each category need not be identical.
Provisions Particular to Restricted Stock Awards
Vesting of any grant of Restricted Stock Awards may be further conditioned
upon the attainment of Performance Objectives (as defined in the 2008 Plan)
established by the Committee in accordance with the applicable provisions of
Section 8 of the 2008 Plan regarding Performance Shares. (See "Performance
Shares" below.)
Provisions Particular to Stock Appreciation Rights
Stock Appreciation Rights are exercisable for seven (7) years from the
date such Stock Appreciation Right is granted. The base price per share for
each share of Common Stock covered by an award of Stock Appreciation Rights
shall not be less than one hundred percent (100%) of the Fair Market Value of
a share of Common Stock on the date of grant. Stock Appreciation Rights
may not be repriced without the approval of the Company's Stockholders.
Deferred Shares
The Committee may authorize grants of Deferred Shares to Participants upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:
(i) Each grant shall constitute the agreement by the Company to
issue or transfer shares of Common Stock to the Participant in the future
in consideration of the performance of services, subject to the
fulfillment during the Deferral Period of such conditions as the Committee
may specify.
(ii) Each grant may be made without additional consideration from
the Participant or in consideration of a payment by the Participant that
is less than the Fair Market Value on the date of grant.
(iii)Each grant shall provide that the Deferred Shares covered
thereby shall be subject to a Deferral Period, which shall be fixed by the
Committee on the date of grant, and any grant or sale may provide for the
earlier termination of such period in the event of a change in control of
the Company or other similar transaction or event.
(iv) During the Deferral Period, the Participant shall not have any
right to transfer any rights under the subject Award, shall not have any
rights of ownership in the Deferred Shares and shall not have any right to
vote such shares, but the Committee may on or after the date of grant,
authorize the payment of dividend or other distribution equivalents on
such shares in cash or additional shares on a current, deferred or
contingent basis.
(v) Any grant, or the vesting thereof, may be further conditioned
upon the attainment of Performance Objectives established by the Committee
in accordance with the applicable provisions of Section 8 of the 2008 Plan
regarding Performance Shares.
(vi) Each grant shall be evidenced by an agreement delivered to and
accepted by the Participant and containing such terms and provisions as
the Committee may determine consistent with the 2008 Plan.
Performance Shares
The Committee may authorize grants of Performance Shares, which shall
become payable to the Participant upon the achievement of specified Performance
Objectives, upon such terms and conditions as the Committee may determine in
accordance with the following provisions:
(i) Each grant shall specify the number of Performance
Shares to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.
(ii) The Performance Period with respect to each Performance
Share shall commence on the date established by the Committee and
may be subject to earlier termination in the event of a change in
control of the Company or similar transaction or event.
(iii)Each grant shall specify the Performance Objectives
that are to be achieved by the Participant.
(iv) Each grant may specify in respect of the specified
Performance Objectives a minimum acceptable level of achievement
below which no payment will be made and may set forth a formula for
determining the amount of any payment to be made if performance is
at or above such minimum acceptable level but falls short of the
maximum achievement of the specified Performance Objectives.
(v) Each grant shall specify the time and manner of payment
of Performance Shares that shall have been earned, and any grant may
specify that any such amount may be paid by the Company in cash,
shares of Common Stock or any combination thereof and may either
grant to the Participant or reserve to the Committee the right to
elect among those alternatives.
(vi) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum
specified by the Committee on the date of grant.
(vii)Any grant of Performance Shares may provide for the
payment to the Participant of dividend or other distribution
equivalents thereon in cash or additional shares of Common Stock on
a current, deferred or contingent basis.
(viii)If provided in the terms of the grant and subject to
the requirements of Section 162(m) of the Code (in the case of
Awards intended to qualify for exception therefrom), the Committee
may adjust Performance Objectives and the related minimum acceptable
level of achievement if, in the sole judgment of the Committee,
events or transactions have occurred after the date of grant that
are unrelated to the performance of the Participant and result in
distortion of the Performance Objectives or the related minimum
acceptable level of achievement.
(ix) Each grant shall be evidenced by an agreement that
shall be delivered to and accepted by the Participant, which shall
state that the Performance Shares are subject to all of the terms
and conditions of this Plan and such other terms and provisions as
the Committee may determine consistent with this Plan.
Withholding Tax
The Company or an Affiliate shall have the right, before any certificate
for any Common Stock is delivered, to deduct or withhold from any payment owed
to a Participant any amount that is necessary in order to satisfy any
withholding requirement that the Company or Affiliate in good faith believes is
imposed upon it in connection with U.S. federal, state, or local taxes,
including transfer taxes, as a result of the issuance of, or lapse of
restrictions on, such Common Stock, or otherwise require such Participant to
make provision for payment of any such withholding amount.
Effect on Employment and Service
The 2008 Plan, and its operation does not confer upon anyone any right to
continue in the employ or service of the Company or an Affiliate, affect any
right and power of the Company or an Affiliate to change a person's duties or
terminate the employment or service of any individual at any time with or
without assigning a reason therefore or except to the extent the Committee
grants an Option or Stock Award to such individual, confer on any individual
the right to participate in the benefits of the 2008 Plan.
Use of Proceeds
The Company intends to use the proceeds it receives from the sale of
Common Stock pursuant to the 2008 Plan for general corporate purposes.
Amendment And Termination
The Board may amend or terminate the 2008 Plan from time to time;
provided, however, stockholder approval shall be required for any amendment
that (i) increases the aggregate number of shares of Common Stock that may be
issued under the 2008 Plan, except as contemplated by Section 5.A or Section
9.B; (ii) changes the class of employees eligible to receive ISOs; (iii)
modifies the restrictions on Repricings set forth in the 2008 Plan; or (iv)
is required by the terms of any applicable law, regulation or rule, including
the rules of any market on which the Company's shares are traded or
exchange on which the Company's shares are listed. Except as specifically
permitted by the 2008 Plan, Stock Option Agreement or Stock Award Agreement
or as required to comply with applicable law, regulation or rule, no amendment
shall, without a Participant's consent, adversely affect any rights of such
Participant under any Option or Stock Award outstanding at the time such
amendment is made; provided, however, that an amendment that may cause an
Incentive Stock Option to become a Nonqualified Stock Option shall not be
treated as adversely affecting the rights of the Participant. Any amendment
requiring stockholder approval shall be approved by the stockholders of
the Company within twelve (12) months of the date such amendment is adopted
by the Board.
Effective Date of Plan; Duration of Plan
The 2008 Plan is effective upon adoption by the Board, subject to approval
within twelve (12) months by the stockholders of the Company.
Unless previously terminated, the 2008 Plan will terminate ten (10) years
after the earlier of (i) the date the 2008 Plan is adopted by the Board, or
(ii) the date the 2008 Plan is approved by the stockholders, except that Awards
that are granted under this Plan prior to its termination will continue to be
administered under the terms of this Plan until the Awards terminate or are
exercised.
A copy of the 2008 Plan is attached hereto as Appendix A.
ADDITIONAL INFORMATION
We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith, we
file periodic reports, documents and other information with the SEC relating to
our business, financial statements and other matters. Such reports and other
information may be inspected and are available for copying at the offices of
the SEC, 100 F Street, N.E., Washington, D.C. 20549 or may be accessed at
www.sec.gov. Information regarding the operation of the public reference
rooms may be obtained by calling the SEC at 1-800-SEC-0330.
We will provide upon request and without charge to each shareholder
receiving this Information Statement a copy of the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 2007, including the financial
statements and financial statement schedule information included therein, as
filed with the SEC. You are encouraged to review the Annual Report together
with any subsequent information we filed or will file with the SEC and other
publicly available information. A copy of any public filing is also available,
at no charge, by contacting our legal counsel, Gersten, Savage LLP, Attn:
David E. Danovitch, Esq. at 212-752-9700.
March 17, 2008 K-9 CONCEPTS, INC.
/s/ Albert Au
---------------------------------------
Albert Au
President and Chief Executive Officer
APPENDIX A
K-9 CONCEPTS, INC.
2008 LONG-TERM STOCK INCENTIVE PLAN
1. PURPOSE.
The K-9 Concepts, Inc. 2008 Long-Term Stock Incentive Plan is intended to
promote the best interests of K-9 Concepts, Inc. and its stockholders by
(i) assisting the Corporation and its Affiliates in the recruitment and
retention of persons with ability and initiative, (ii) providing an incentive
to such persons to contribute to the growth and success of the Corporation's
businesses by affording such persons equity participation in the Corporation
and (iii) associating the interests of such persons with those of the
Corporation and its Affiliates and stockholders.
2. DEFINITIONS.
As used in this Plan the following definitions shall apply:
A. "AFFILIATE" means (i) any Subsidiary, (ii) any Parent,
(iii) any corporation, or trade or business (including, without limitation, a
partnership, limited liability company or other entity) which is directly or
indirectly controlled fifty percent (50%) or more (whether by ownership of
stock, assets or an equivalent ownership interest or voting interest) by the
Corporation or one of its Affiliates, and (iv) any other entity in which the
Corporation or any of its Affiliates has a material equity interest and which
is designated as an "Affiliate" by resolution of the Committee.
B. "AWARD" means any Option or Stock Award granted hereunder.
C. "BOARD" means the Board of Directors of the Corporation.
D. "CAUSE" means: (i) conduct involving a felony criminal offense
under U. S. federal or state law or an equivalent violation of the laws of any
other country; (ii) dishonesty, fraud, self dealing or material violations of
civil law in the course of fulfilling the Participant's employment or other
assigned duties on behalf of the Corporation; (iii) breach of any
confidentiality, employment, or other written agreement with the Corporation;
or (iv) willful misconduct injurious to the Corporation or any of its
Subsidiaries or Affiliates as shall be determined by the Committee.
E. "CHANGE IN CONTROL" has the meaning set forth in Section 10.
F. "CODE" means the Internal Revenue Code of 1986, and any
amendments thereto.
G. "COMMITTEE" means the Board or any Committee of the Board to
which the Board has delegated any responsibility for the implementation,
interpretation or administration of this Plan. As of the date of the Plan, the
Board has initially delegated responsibility for the administration of the Plan
to the Corporation's Compensation Committee.
H. "COMMON STOCK" means the common stock, $0.001 par value, of
the Corporation.
I. "CONSULTANT" means (i) any person performing consulting or
advisory services for the Corporation or any Affiliate, or (ii) a director of
an Affiliate.
J. "CORPORATION" means K-9 Concepts, Inc., a Nevada corporation.
K. "CORPORATION LAW" means the Nevada General Corporation Law.
L. "DEFERRAL PERIOD" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7.D of this
Plan.
M. "DEFERRED SHARES" means an award pursuant to Section 7.D of
this Plan of the right to receive shares of Common Stock at the end of a
specified Deferral Period.
N. "DIRECTOR" means a member of the Board.
O. "ELIGIBLE PERSON" means an employee of the Corporation or an
Affiliate (including a corporation that becomes an Affiliate after the adoption
of this Plan), a Director or a Consultant to the Corporation or an Affiliate
(including a corporation that becomes an Affiliate after the adoption of this
Plan).
P. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
Q. "FAIR MARKET VALUE" means, on any given date, the current fair
market value of the shares of Common Stock as determined as follows:
(i) If the Common Stock is traded on a national securities
exchange, the closing price for the day of determination as quoted
on such market or exchange, including the NASDAQ Global Market or
NASDAQ Capital Market, or the OTC Bulletin Board, whichever is the
primary market or exchange for trading of the Common Stock or if no
trading occurs on such date, the last day on which trading occurred,
or such other appropriate date as determined by the Committee in its
discretion, as reported in The Wall Street Journal or such other
source as the Committee deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and the low asked
prices for the Common Stock for the day of determination; or
(iii) In the absence of an established market for the Common
Stock, Fair Market Value shall be determined by the Committee in
good faith.
R. "INCENTIVE STOCK OPTION" means an Option (or portion thereof)
intended to qualify for special tax treatment under Section 422 of the Code.
S. "NONQUALIFIED STOCK OPTION" means an Option (or portion
thereof) which is not intended or does not for any reason qualify as an
Incentive Stock Option.
T. "OPTION" means any option to purchase shares of Common Stock
granted under this Plan.
U. "PARENT" means any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation if each of the
corporations (other than the Corporation) owns stock possessing at least fifty
percent (50%) of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
V. "PARTICIPANT" means an Eligible Person who (i) is selected by
the Committee or an authorized officer of the Corporation to receive an Award
and (ii) is party to an agreement setting forth the terms of the Award, as
appropriate.
W. "PERFORMANCE AGREEMENT" means an agreement described in
Section 8 of this Plan.
X. "PERFORMANCE OBJECTIVES" means the performance objectives
established pursuant to this Plan for Participants who have received grants of
Performance Shares or, when so determined by the Committee, Stock Awards.
Performance Objectives may be described in terms of Corporation-wide objectives
or objectives that are related to the performance of the individual Participant
or the Affiliate, subsidiary, division, department or function within the
Corporation or Affiliate in which the Participant is employed or has
responsibility. Any Performance Objectives applicable to Awards to the extent
that such an Award is intended to qualify as "performance-based compensation"
under Section 162(m) of the Code shall be limited to specified levels of or
increases in the Corporation's or a business unit's return on equity, earnings
per share, total earnings, earnings growth, return on capital, return on
assets, economic value added, earnings before interest and taxes, earnings
before interest, taxes, depreciation and amortization, sales growth, gross
margin return on investment, increase in the Fair Market Value of the shares,
share price (including but not limited to growth measures and total stockholder
return), net operating profit, cash flow (including, but not limited to,
operating cash flow and free cash flow), cash flow return on investments (which
equals net cash flow divided by total capital), internal rate of return,
increase in net present value or expense targets. The Awards intended to
qualify as "Performance Based Compensation" under Section 162(m) of the Code
shall be pre-established in accordance with applicable regulations under
Section 162(m) of the Code and the determination of attainment of such goals
shall be made by the Committee. If the Committee determines that a change in
the business, operations, corporate structure or capital structure of the
Corporation (including an event described in Section 9), or the manner in which
it conducts is business, or other events or circumstances render the
Performance Objectives unsuitable, the Committee may modify such Performance
Objectives or the related minimum acceptable level of achievement, in whole or
in part, as the Committee deems appropriate and equitable; provided, however,
that no such modification shall be made to an Award intended to qualify as
performance-based compensation under Section 162(m) of the Code unless the
Committee determines that such modification will not result in loss of such
qualification or the Committee determines that loss of such qualification is in
the best interests of the Corporation.
Y. "PERFORMANCE PERIOD" means a period of time established under
Section 8 of this Plan within which the Performance Objectives relating to a
Performance Share or Stock Award are to be achieved.
Z. "PERFORMANCE SHARE" means a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 8 of this
Plan.
AA. "PLAN" means this K-9 Concepts, Inc. 2008 Long-Term Stock
Incentive Plan.
BB. "REPRICING" means, other than in connection with an event
described in Section 9 of this Plan, (i) lowering the exercise price of an
Option or Stock Appreciation Right after it has been granted or (ii) canceling
an Option or Stock Appreciation Right at a time when the exercise price exceeds
the then Fair Market Value of the Common Stock in exchange for another Option
or Stock Award.
CC. "RESTRICTED STOCK AWARD" means an award of Common Stock under
Section 7.B.
DD. "SECURITIES ACT" means the Securities Act of 1933, as amended.
EE. "STOCK AWARD" means a Stock Bonus Award, Restricted Stock
Award, Stock Appreciation Right, Deferred Shares, or Performance Shares.
FF. "STOCK BONUS AWARD" means an award of Common Stock under
Section 7.A.
GG. "STOCK APPRECIATION RIGHT" means an award of a right of the
Participant under Section 7.C to receive a payment in cash or shares of Common
Stock (or a combination thereof) based on the increase in Fair Market Value of
the shares of Common Stock covered by the award between the date of grant of
such award and the Fair Market Value of the Common Stock on the date of
exercise of such Stock Appreciation Right.
HH. "STOCK AWARD AGREEMENT" means an agreement (written or
electronic) between the Corporation and a Participant setting forth the
specific terms and conditions of a Stock Award granted to the Participant under
Section 7. Each Stock Award Agreement shall be subject to the terms and
conditions of this Plan and shall include such terms and conditions, as the
Committee shall authorize.
II. "STOCK OPTION AGREEMENT" means an agreement (written or
electronic) between the Corporation and a Participant setting forth the
specific terms and conditions of an Option granted to the Participant. Each
Stock Option Agreement shall be subject to the terms and conditions of this
Plan and shall include such terms and conditions, as the Committee shall
authorize.
JJ. "SUBSIDIARY" means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation if each of the corporations (other than the last corporation in
the unbroken chain) owns stock possessing at least fifty percent (50%) of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
KK. "TEN PERCENT OWNER" means any Eligible Person owning at the
time an Option is granted more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or of a Parent or
Subsidiary. An individual shall, in accordance with Section 424(d) of the
Code, be considered to own any voting stock owned (directly or indirectly) by
or for such Eligible Person's brothers, sisters, spouse, ancestors and lineal
descendants and any voting stock owned (directly or indirectly) by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its stockholders, partners, or beneficiaries.
3. ADMINISTRATION.
A. DELEGATION TO BOARD COMMITTEE. The Board shall be the sole
Committee of this Plan unless the Board delegates all or any portion of its
authority to administer this Plan to a Committee. To the extent not prohibited
by the charter or bylaws of the Corporation, the Board may delegate all or a
portion of its authority to administer this Plan to a Committee of the Board
appointed by the Board and constituted in compliance with the applicable
Corporation Law. The Committee shall consist solely of two (2) or more
Directors who are (i) Non-Employee Directors (within the meaning of Rule 16b-3
under the Exchange Act) for purposes of exercising administrative authority
with respect to Awards granted to Eligible Persons who are subject to Section
16 of the Exchange Act; (ii) to the extent required by the rules of the market
on which the Corporation's shares are traded or the exchange on which the
Corporation' shares are listed, "independent" within the meaning of such rules;
and (iii) at such times as an Award under this Plan by the Corporation is
subject to Section 162(m) of the Code (to the extent relief from the limitation
of Section 162(m) of the Code is sought with respect to Awards and
administration of the
Awards by a committee of "outside directors" is required to receive such
relief) "outside directors" within the meaning of Section 162(m) of the Code.
B. DELEGATION TO OFFICERS. The Committee may delegate to one or
more officers of the Corporation the authority to grant and administer Awards
to Eligible Persons who are not Directors or executive officers of the
Corporation, provided that the Committee shall have fixed the total number of
shares of Common Stock that may be subject to such Awards. No officer holding
such a delegation is authorized to grant Awards to himself or herself. In
addition to the Committee, the officer or officers to whom the Committee has
delegated the authority to grant and administer Awards shall have all powers
delegated to the Committee with respect to such Awards. Such delegation shall
be subject to any limitations set forth in the Corporation Law.
C. POWERS OF THE COMMITTEE. Subject to the provisions of this
Plan, and in the case of a Committee appointed by the Board, the specific
duties delegated to such Committee, the Committee (and the officers to whom the
Committee has delegated such authority) shall have the authority:
(i) To construe and interpret all provisions of this Plan
and all Stock Option Agreements, Stock Award Agreements and
Performance Agreements under this Plan.
(ii) To determine the Fair Market Value of Common Stock.
(iii) To select the Eligible Persons to whom Awards are
granted from time to time hereunder.
(iv) To determine the number of shares of Common Stock
covered by an Award; to determine whether an Option shall be an
Incentive Stock Option or Nonqualified Stock Option; and to
determine such other terms and conditions, not inconsistent with the
terms of this Plan, of each such Award. Such terms and conditions
include, but are not limited to, the exercise price of an Option,
purchase price of Common Stock subject to a Stock Award, the time or
times when Options or Stock Awards may be exercised or Common Stock
issued thereunder, the right of the Corporation to repurchase Common
Stock issued pursuant to the exercise of an Option or a Stock Award
and other restrictions or limitations (in addition to those
contained in this Plan) on the forfeitability or transferability of
Options, Stock Awards or Common Stock issued upon exercise of an
Option or pursuant to an Award. Such terms may include conditions
which shall be determined by the Committee and need not be uniform
with respect to Participants.
(v) To accelerate the time at which any Option or Stock
Award may be exercised, or the time at which a Stock Award or Common
Stock issued under this Plan may become transferable or non-
forfeitable.
(vi) To determine whether and under what circumstances an
Option may be settled in cash, shares of Common Stock or other
property under Section 6.H instead of Common Stock.
(vii) To waive, amend, cancel, extend, renew, accept the
surrender of, modify or accelerate the vesting of or lapse of
restrictions on all or any portion of an outstanding Award. Except
as otherwise provided by this Plan, the Stock Option Agreement,
Stock Award Agreement or Performance Agreement or as required to
comply with applicable law, regulation or rule, no amendment,
cancellation or modification shall, without a Participant's consent,
adversely affect any rights of the Participant; provided, however,
that (x) an amendment or modification that may cause an Incentive
Stock Option to become a Nonqualified Stock Option shall not be
treated as adversely affecting the rights of the Participant and
(y) any other amendment or modification of any Stock Option
Agreement, Stock Award Agreement or Performance Agreement that does
not, in the opinion of the Committee, adversely affect any rights of
any Participant, shall not require such Participant's consent.
Notwithstanding the foregoing, the restrictions on the Repricing of
Options and Stock Appreciation Rights, as set forth in this Plan,
may not be waived.
(viii) To prescribe the form of Stock Option Agreements, and
Stock Award Agreements and Performance Agreements; to adopt policies
and procedures for the exercise of Options or Stock Awards,
including the satisfaction of withholding obligations; to adopt,
amend, and rescind policies and procedures pertaining to the
administration of this Plan; and to make all other determinations
necessary or advisable for the administration of this Plan. The
Award's effectiveness will not be dependent on any signature unless
specifically so provided in the Award Agreement. Awards shall
generally be subject to a three (3) year vesting period and no more
than sixty percent 60% of Awards to executives and directors may
have a vesting period of less than three (3) years; provided,
however, that vesting may accelerate in the event of a Change in
Control and certain events as set forth in Section 9 herein, and in
the events of death, disability or retirement, as will be specified
in the Award Agreement.
(ix) To insure that the implementation of this Plan and
carrying out of the transactions contemplated by this Plan comply
with all applicable laws, including, without limitation, Code
Section 409A.
The express grant in this Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee;
provided that the Committee or any committee of the Board may not exercise any
right or power reserved to the Board. Any decision made, or action taken, by
the Committee or in connection with the administration of this Plan shall be
final, conclusive and binding on all persons having an interest in this Plan.
4. ELIGIBILITY.
A. ELIGIBILITY FOR AWARDS. Awards, other than Incentive Stock
Options, may be granted to any Eligible Person selected by the Committee.
Incentive Stock Options may be granted only to employees of the Corporation or
a Parent or Subsidiary.
B. ELIGIBILITY OF CONSULTANTS. A Consultant shall be an Eligible
Person only if the offer or sale of the Corporation's securities would be
eligible for registration on Form S-8 Registration Statement because of the
identity and nature of the service provided by such person, unless the
Corporation determines that an offer or sale of the Corporation's securities to
such person will satisfy another exemption from the registration under the
Securities Act and complies with the securities laws of all other jurisdictions
applicable to such offer or sale.
C. SUBSTITUTION AWARDS. The Committee may make Awards and may
grant Options under this Plan by assumption, in substitution or replacement of
performance shares, phantom shares, stock awards, stock options, stock
appreciation rights or similar awards granted by another entity (including an
Affiliate) in connection with a merger, consolidation, acquisition of property
or stock or similar transaction. Notwithstanding any provision of this Plan
(other than the maximum number of
shares of Common Stock that may be issued under this Plan), the terms of such
assumed, substituted, or replaced Awards shall be as the Committee, in its
discretion, determines is appropriate.
5. COMMON STOCK SUBJECT TO PLAN.
A. SHARE RESERVE AND LIMITATIONS ON GRANTS. Subject to
adjustment as provided in Section 9, the maximum aggregate number of shares of
Common Stock that may be (i) issued under this Plan pursuant to the exercise of
Options, (ii) issued pursuant to Stock Awards, (iii) covered by Stock
Appreciation Rights (without regard to whether payment on exercise of the Stock
Appreciation Right is made in cash or shares of Common Stock) and (iv) covered
by Performance Shares shall be limited to fifteen percent 15% of the shares of
Common Stock outstanding, which calculation shall be made on the first trading
day of a new fiscal year; provided that, in any year no more than five percent
5% of the Common Stock of the Company be issued in any fiscal year; provided
further that the Committee may issue up to 10% of the Common Stock of the
Company in the Plan's first year. The number shares of Common Stock subject to
the Plan shall be subject to adjustment as provided in Section 9. Subject to
adjustment as provided in Section 9, and notwithstanding any provision hereto
to the contrary, shares subject to the Plan shall include shares forfeited in a
prior year as provided herein. For purposes of determining the number of
shares of Common Stock available under this Plan, shares of Common Stock
withheld by the Corporation to satisfy applicable tax withholding obligations
pursuant to Section 11 of this Plan shall be deemed issued under this Plan. No
single participant may receive more than twenty-five percent 25% of the total
shares awarded in any single year.
B. REVERSION OF SHARES. If an Option or Stock Award is
terminated, expires or becomes unexercisable, in whole or in part, for any
reason, the unissued or unpurchased shares of Common Stock (or shares subject
to an unexercised Stock Appreciation Right) which were subject thereto shall
become available for future grant under this Plan. Shares of Common Stock that
have been actually issued under this Plan shall not be returned to the share
reserve for future grants under this Plan; except that shares of Common Stock
issued pursuant to a Stock Award which are forfeited to the Corporation or
repurchased by the Corporation at the original purchase price of such shares,
shall be returned to the share reserve for future grant under this Plan.
C. SOURCE OF SHARES. Common Stock issued under this Plan may be
shares of authorized and unissued Common Stock or shares of previously issued
Common Stock that have been reacquired by the Corporation.
6. OPTIONS.
A. AWARD. In accordance with the provisions of Section 4, the
Committee will designate each Eligible Person to whom an Option is to be
granted and will specify the number of shares of Common Stock covered by such
Option. The Stock Option Agreement shall specify whether the Option is an
Incentive Stock Option or Nonqualified Stock Option, the vesting schedule
applicable to such Option and any other terms of such Option. No Option that
is intended to be an Incentive Stock Option shall be invalid for failure to
qualify as an Incentive Stock Option.
B. OPTION PRICE. The exercise price per share for Common Stock
subject to an Option shall be determined by the Committee, but shall comply
with the following:
(i) The exercise price per share for Common Stock subject
to an Option shall not be less than one hundred percent (100%) of
the Fair Market Value on the date of grant.
(ii) The exercise price per share for Common Stock subject
to an Incentive Stock Option granted to a Participant who is deemed
to be a Ten Percent Owner on the date such option is granted, shall
not be less than one hundred ten percent (110%) of the Fair Market
Value on the date of grant.
C. MAXIMUM OPTION PERIOD. The maximum period during which an
Option may be exercised shall be ten (10) years from the date such Option was
granted. In the case of an Incentive Stock Option that is granted to a
Participant who is or is deemed to be a Ten Percent Owner on the date of grant,
such Option shall not be exercisable after the expiration of five (5) years
from the date of grant.
D. MAXIMUM VALUE OF OPTIONS WHICH ARE INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value of the Common Stock with
respect to which Incentive Stock Options granted to any person are exercisable
for the first time during any calendar year (under all stock option plans of
the Corporation or any Parent or Subsidiary) exceeds $100,000 (or such other
amount provided in Section 422 of the Code), the Options are not Incentive
Stock Options. For purposes of this section, the Fair Market Value of the
Common Stock will be determined as of the time the Incentive Stock Option with
respect to the Common Stock is granted. This section will be applied by taking
Incentive Stock Options into account in the order in which they are granted.
E. NONTRANSFERABILITY. Options granted under this Plan which are
intended to be Incentive Stock Options shall be nontransferable except by will
or by the laws of descent and distribution and during the lifetime of the
Participant shall be exercisable by only the Participant to whom the Incentive
Stock Option is granted. Except to the extent transferability of a
Nonqualified Stock Option is provided for in the Stock Option Agreement or is
approved by the Committee, during the lifetime of the Participant to whom the
Nonqualified Stock Option is granted, such Option may be exercised only by the
Participant. If the Stock Option Agreement so provides or the Committee so
approves, a Nonqualified Stock Option may be transferred by a Participant
through a gift or domestic relations order to the Participant's family members
to the extent in compliance with applicable securities laws and regulations and
provided that such transfer is not a transfer for value (within the meaning of
applicable securities laws and regulations). The holder of a Nonqualified
Stock Option transferred pursuant to this section shall be bound by the same
terms and conditions that governed the Option during the period that it was
held by the Participant. No right or interest of a Participant in any Option
shall be liable for, or subject to, any lien, obligation, or liability of such
Participant.
F. VESTING. Options will vest as provided in the Stock Option
Agreement.
G. EXERCISE. Subject to the provisions of this Plan and the
applicable Stock Option Agreement, an Option may be exercised to the extent
vested in whole at any time or in part from time to time at such times and in
compliance with such requirements, as the Committee shall determine. A partial
exercise of an Option shall not affect the right to exercise the Option from
time to time in accordance with this Plan and the applicable Stock Option
Agreement with respect to the remaining shares subject to the Option. An
Option may not be exercised with respect to fractional shares of Common Stock.
H. PAYMENT. Unless otherwise provided by the Stock Option
Agreement, payment of the exercise price for an Option shall be made in cash or
a cash equivalent acceptable to the Committee or if the Common Stock is traded
on an established securities market, by payment of the exercise price by a
broker-dealer or by the Option holder with cash advanced by the broker-dealer
if the exercise notice is accompanied by the Option holder's written
irrevocable instructions to deliver the Common Stock acquired upon exercise of
the Option to the broker-dealer or by delivery of the Common Stock to the
broker-dealer with an irrevocable commitment by the broker-dealer to forward
the exercise price to the
Corporation. With the consent of the Committee, payment of all or a part of the
exercise price of an Option may also be made (i) by surrender to the
Corporation (or delivery to the Corporation of a properly executed form of
attestation of ownership) of shares of Common Stock that have been held for
such period prior to the date of exercise as is necessary to avoid adverse
accounting treatment to the Corporation, or (ii) any other method acceptable to
the Committee, including without limitation, the withholding of shares
receivable upon settlement of the option in payment of the exercise price.
If Common Stock is used to pay all or part of the exercise price, the sum of
the cash or cash equivalent and the Fair Market Value (determined as of the
date of exercise) of the shares surrendered must not be less than the Option
price of the shares for which the Option is being exercised.
I. STOCKHOLDER RIGHTS. No Participant shall have any rights as a
stockholder with respect to shares subject to an Option until the date of
exercise of such Option and the certificate for shares of Common Stock to be
received on exercise of such Option has been issued by the Corporation.
J. DISPOSITION AND STOCK CERTIFICATE LEGENDS FOR INCENTIVE STOCK
OPTION SHARES. A Participant shall notify the Corporation of any sale or other
disposition of Common Stock acquired pursuant to an Incentive Stock Option if
such sale or disposition occurs (i) within two (2) years of the grant of an
Option or (ii) within one (1) year of the issuance of the Common Stock to the
Participant. Such notice shall be in writing and directed to the Chief
Financial Officer of the Corporation or is his/her absence, the Chief Executive
Officer. The Corporation may require that certificates evidencing shares of
Common Stock purchased upon the exercise of Incentive Stock Option issued under
this Plan be endorsed with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD OR
TRANSFERRED PRIOR TO ___, 20___, IN THE ABSENCE OF A WRITTEN
STATEMENT FROM THE CORPORATION TO THE EFFECT THAT THE
CORPORATION IS AWARE OF THE FACTS OF SUCH SALE OR TRANSFER.
The blank contained in this legend shall be filled in with the date that
is the later of (i) one (1) year and one (1) day after the date of the exercise
of such Incentive Stock Option or (ii) two (2) years and one (1) day after the
grant of such Incentive Stock Option.
K. NO REPRICING. In no event shall the Committee permit a
Repricing of any Option without the approval of the stockholders of the
Corporation.
7. STOCK AWARDS.
A. STOCK BONUS AWARDS. Each Stock Award Agreement for a Stock
Bonus Award shall be in such form and shall contain such terms and conditions
(including provisions relating to consideration, vesting, reacquisition of
shares following termination, and transferability of shares) as the Committee
shall deem appropriate. The terms and conditions of Stock Award Agreements for
Stock Bonus Awards may change from time to time, and the terms and conditions
of separate Stock Bonus Awards need not be identical.
B. RESTRICTED STOCK AWARDS. Each Stock Award Agreement for a
Restricted Stock Award shall be in such form and shall contain such terms and
conditions (including provisions relating to purchase price, consideration,
vesting, reacquisition of shares following termination, and transferability of
shares) as the Committee shall deem appropriate. The terms and conditions of
the Stock Award Agreements for Restricted Stock Awards may change from time to
time, and the terms and conditions of separate Restricted Stock Awards need not
be identical. Vesting of any grant of Restricted Stock Awards
may be further conditioned upon the attainment of Performance Objectives
established by the Committee in accordance with the applicable provisions of
Section 8 of this Plan regarding Performance Shares.
C. STOCK APPRECIATION RIGHTS. Each Stock Award Agreement for
Stock Appreciation Rights shall be in such form and shall contain such terms
and conditions (including provisions relating to vesting, reacquisition of
shares following termination, and transferability of shares) as the Committee
shall deem appropriate. The terms and conditions of Stock Appreciation Rights
may change from time to time, and the terms and conditions of separate Stock
Appreciation Rights need not be identical. No Stock Appreciation Right shall
be exercisable after the expiration of seven (7) years from the date such Stock
Appreciation Right is granted. The base price per share for each share of
Common Stock covered by an Award of Stock Appreciation Rights shall not be less
than one hundred percent (100%) of the Fair Market Value of a share of Common
Stock on the date of grant. In no event shall the Committee permit a Repricing
of any Stock Appreciation Right without the approval of the stockholders of the
Corporation.
D. DEFERRED SHARES. The Committee may authorize grants of
Deferred Shares to Participants upon such terms and conditions as the Committee
may determine in accordance with the following provisions:
(i) Each grant shall constitute the agreement by the
Corporation to issue or transfer shares of Common Stock to the
Participant in the future in consideration of the performance of
services, subject to the fulfillment during the Deferral Period of
such conditions as the Committee may specify.
(ii) Each grant may be made without additional consideration
from the Participant or in consideration of a payment by the
Participant that is less than the Fair Market Value on the date of
grant.
(iii) Each grant shall provide that the Deferred Shares
covered thereby shall be subject to a Deferral Period, which shall
be fixed by the Committee on the date of grant, and any grant or
sale may provide for the earlier termination of such period in the
event of a change in control of the Corporation or other similar
transaction or event.
(iv) During the Deferral Period, the Participant shall not
have any right to transfer any rights under the subject Award, shall
not have any rights of ownership in the Deferred Shares and shall
not have any right to vote such shares, but the Committee may on or
after the date of grant, authorize the payment of dividend or other
distribution equivalents on such shares in cash or additional shares
on a current, deferred or contingent basis.
(v) Any grant of the vesting thereof may be further
conditioned upon the attainment of Performance Objectives
established by the Committee in accordance with the applicable
provisions of Section 8 of this Plan regarding Performance Shares.
(vi) Each grant shall be evidenced by an agreement delivered
to and accepted by the Participant and containing such terms and
provisions as the Committee may determine consistent with this Plan.
8. PERFORMANCE SHARES.
A. The Committee may authorize grants of Performance Shares,
which shall become payable to the Participant upon the achievement of specified
Performance Objectives, upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(i) Each grant shall specify the number of Performance
Shares to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.
(ii) The Performance Period with respect to each Performance
Share shall commence on the date established by the Committee and
may be subject to earlier termination in the event of a change in
control of the Corporation or similar transaction or event.
(iii) Each grant shall specify the Performance Objectives
that are to be achieved by the Participant.
(iv) Each grant may specify in respect of the specified
Performance Objectives a minimum acceptable level of achievement
below which no payment will be made and may set forth a formula for
determining the amount of any payment to be made if performance is
at or above such minimum acceptable level but falls short of the
maximum achievement of the specified Performance Objectives.
(v) Each grant shall specify the time and manner of payment
of Performance Shares that shall have been earned, and any grant may
specify that any such amount may be paid by the Corporation in cash,
shares of Common Stock or any combination thereof and may either
grant to the Participant or reserve to the Committee the right to
elect among those alternatives.
(vi) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum
specified by the Committee on the date of grant.
(vii) Any grant of Performance Shares may provide for the
payment to the Participant of dividend or other distribution
equivalents thereon in cash or additional shares of Common Stock on
a current, deferred or contingent basis.
(viii) If provided in the terms of the grant and subject to
the requirements of Section 162(m) of the Code (in the case of
Awards intended to qualify for exception therefrom), the Committee
may adjust Performance Objectives and the related minimum acceptable
level of achievement if, in the sole judgment of the Committee,
events or transactions have occurred after the date of grant that
are unrelated to the performance of the Participant and result in
distortion of the Performance Objectives or the related minimum
acceptable level of achievement.
(ix) Each grant shall be evidenced by an agreement that
shall be delivered to and accepted by the Participant, which shall
state that the Performance Shares are subject to all of the terms
and conditions of this Plan and such other terms and provisions as
the Committee may determine consistent with this Plan.
9. CHANGES IN CAPITAL STRUCTURE.
A. NO LIMITATIONS OF RIGHTS. The existence of outstanding Awards
shall not affect in any way the right or power of the Corporation or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of
the Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
B. CHANGES IN CAPITALIZATION. If the Corporation shall effect
a subdivision or consolidation of shares or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, without receiving consideration
therefore in money, services or property, then (i) the number, class, and per
share price of shares of Common Stock subject to outstanding Options and other
Awards hereunder and (ii) the number and class of shares then reserved for
issuance under this Plan and the maximum number of shares for which Awards may
be granted to a Participant during a specified time period shall be
appropriately and proportionately adjusted. The conversion of convertible
securities of the Corporation shall not be treated as effected "without
receiving consideration." The Committee shall make such adjustments, and its
determinations shall be final, binding and conclusive.
C. MERGER, CONSOLIDATION OR ASSET SALE. If the Corporation is
merged or consolidated with another entity or sells or otherwise disposes of
substantially all of its assets to another company while Options or Stock
Awards remain outstanding under this Plan, unless provisions are made in
connection with such transaction for the continuance of this Plan and/or the
assumption or substitution of such Options or Stock Awards with new options or
stock awards covering the stock of the successor company, or parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices, then all outstanding Options and Stock Awards which have not
been continued, assumed or for which a substituted award has not been granted
shall, whether or not vested or then exercisable, unless otherwise specified in
the Stock Option Agreement, Performance Agreement, Stock Award Agreement, or
any other agreement executed and delivered by the Company, which references the
terms of this Plan, or employment agreement, if and as applicable, and,
terminate immediately as of the effective date of any such merger,
consolidation or sale.
D. LIMITATION ON ADJUSTMENT. Except as previously expressly
provided, neither the issuance by the Corporation of shares of stock of any
class, or securities convertible into shares of stock of any class, for cash or
property, or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Corporation convertible into such shares or other
securities, nor the increase or decrease of the number of authorized shares of
stock, nor the addition or deletion of classes of stock, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number, class
or price of shares of Common Stock then subject to outstanding Options or Stock
Awards.
10. CHANGE IN CONTROL
A. GENERALLY. In the event of a Change in Control,
notwithstanding any other provision of the Plan to the contrary, the Committee
may, in its discretion, take any of the following actions:
(i) provide that any Options and Stock Appreciation Rights
outstanding which are not then exercisable and vested shall become
immediately vested and fully exercisable;
(ii) immediately lapse restrictions and deferral limitations
applicable to any Restricted Stock, Restricted Stock Unit and other
Awards and such Restricted Stock shall become free of all
restrictions, fully vested and transferable and Restricted Stock
Units and other Awards shall be settled as promptly as practicable
in the form set forth in the applicable Award Agreement;
(iii) provide that Performance Targets applicable to
Performance Share Units and other Awards shall be deemed to be
satisfied and such Awards shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse
and such Restricted Stock Units and other Awards shall be settled as
promptly as is practicable in the form set forth in the applicable
Award Agreement; and
(iv) make such additional adjustments, substitutions and/or
settlements of outstanding Awards as it deems appropriate to protect
Participants' interests in their Awards, consistent with the Plan's
purposes, including, without limitation, the cancellation of
outstanding Awards in exchange for payments of cash, property or a
combination thereof having an aggregate value equal to the value of
such Awards, as determined by the Committee or the Board in its sole
discretion.
B. TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. To the
extent not otherwise vested by the Committee in accordance with the provisions
of this Section 10 and notwithstanding any other provision of this Plan to the
contrary, during the 24-month period following a Change in Control: (i) upon
the involuntary termination of a Participant's employment other than
termination for Cause; (ii) upon the voluntary termination of employment by the
Participant following a material and adverse change in the Participant's
compensation, responsibilities, functions or reporting relationship; or (iii)
in the event a Participant resigns rather that accept a mandatory relocation
greater than 50 miles; then, in any such event, all outstanding Awards held by
such Participant shall become vested as of the Date of Termination. Any Option
or Stock Appreciation Right held by the Participant as of the date of the
Change in Control that remains outstanding as of the date of Termination of
Employment may thereafter be exercised, until the earlier of (i) the third
anniversary of the date of termination; or (ii) the expiration of the Term of
such Option. Restricted Shares shall immediately be free and transferable and
Restricted Share Units, Performance Share Units and other Awards shall be
vested as of the Termination of Employment and settled as soon as practicable
as specified in the Award Agreement.
C. DEFINITION OF CHANGE IN CONTROL. For purposes of the Plan, a
"Change in Control" shall mean any of the following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of the then-
outstanding Shares of Common Stock plus any other outstanding shares
of stock of the Corporation entitled to vote in the election of
directors (the "Outstanding Corporation Voting Securities");
provided, however, that the Corporation and any employee benefit
plan (or related trust) sponsored by it shall not be deemed to be a
Person; or
(ii) A change in the composition of the Board such that the
individuals who constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board. For
this purpose, any individual whose election or nomination for
election by the Corporation's shareholders was approved by a vote of
at least two-thirds
of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board; or
(iii) The consummation of a reorganization, merger, statutory
share exchange or consolidation or similar corporate transaction
involving the Corporation or any of its subsidiaries or a sale or
other disposition of substantially all of the assets of the
Corporation or a material acquisition of assets or stock of another
entity by the Corporation or any of its subsidiaries, (each, a
"Business Combination") if:
A. the individuals and entities that were the
beneficial owners of the Outstanding Corporation Voting
Securities immediately prior to such Business Combination do
not beneficially own, directly or indirectly, more than 50% of
the then-outstanding shares of stock and the combined voting
power of the then-outstanding voting securities of the
corporation resulting from such Business Combination; or
B. a Person beneficially owns, directly or indirectly,
15% or more of the then-outstanding shares of stock of the
corporation resulting from such Business Combination; or
C. members of the Incumbent Board do not comprise at
least a majority of the members of the board of directors of
the corporation resulting from such Business Combination; or
(iv) The approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
There shall be no forfeiture or repayment under this Section 10 following a
Change in Control of any award not previously forfeited.
11. WITHHOLDING OF TAXES.
The Corporation or an Affiliate shall have the right, before any
certificate for any Common Stock is delivered, to deduct or withhold from any
payment owed to a Participant any amount that is necessary in order to satisfy
any withholding requirement that the Corporation or Affiliate in good faith
believes is imposed upon it in connection with U.S. federal, state, or local
taxes, including transfer taxes, as a result of the issuance of, or lapse of
restrictions on, such Common Stock, or otherwise require such Participant to
make provision for payment of any such withholding amount. Subject to such
conditions as may be established by the Committee, the Committee may permit a
Participant to (i) have Common Stock otherwise issuable under an Option or
Stock Award withheld to the extent necessary to comply with minimum statutory
withholding rate requirements, (ii) tender back to the Corporation shares of
Common Stock received pursuant to an Option or Stock Award to the extent
necessary to comply with minimum statutory withholding rate requirements for
supplemental income, (iii) deliver to the Corporation previously acquired
Common Stock, (iv) have funds withheld from payments of wages, salary or other
cash compensation due the Participant, (v) pay the Corporation or its
Affiliate in cash, in order to satisfy part or all of the obligations for any
taxes required to be withheld or otherwise deducted and paid by the Corporation
or its Affiliate with respect to the Option or Stock Award; or (vi) establish a
10b5-1 trading plan for withheld stock designed to facilitate the sale of stock
in connection with the vesting of such shares, the proceeds of which shall be
utilized to make all applicable withholding payments in a manner to be
coordinated by the Corporation's Chief Financial Officer.
12. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES.
A. GENERAL REQUIREMENTS. No Option or Stock Award shall be
exercisable, no Common Stock shall be issued, no certificates for shares of
Common Stock shall be delivered, and no payment shall be made under this Plan
except in compliance with all applicable federal and state laws and regulations
(including, without limitation, withholding tax requirements), any listing
agreement to which the Corporation is a party, and the rules of all domestic
stock exchanges or quotation systems on which the Corporation's shares may be
listed. The Corporation shall have the right to rely on an opinion of its
counsel as to such compliance. Any share certificate issued to evidence Common
Stock when a Stock Award is granted or for which an Option or Stock Award is
exercised may bear such legends and statements as the Committee may deem
advisable to assure compliance with federal and state laws and regulations. No
Option or Stock Award shall be exercisable, no Stock Award shall be granted, no
Common Stock shall be issued, no certificate for shares shall be delivered, and
no payment shall be made under this Plan until the Corporation has obtained
such consent or approval as the Committee may deem advisable from regulatory
bodies having jurisdiction over such matters.
B. PARTICIPANT REPRESENTATIONS. The Committee may require that a
Participant, as a condition to receipt or exercise of a particular award,
execute and deliver to the Corporation a written statement, in form
satisfactory to the Committee, in which the Participant represents and warrants
that the shares are being acquired for such person's own account, for
investment only and not with a view to the resale or distribution thereof. The
Participant shall, at the request of the Committee, be required to represent
and warrant in writing that any subsequent resale or distribution of shares of
Common Stock by the Participant shall be made only pursuant to either (i) a
registration statement on an appropriate form under the Securities Act of 1933,
which registration statement has become effective and is current with regard to
the shares being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act of 1933, but in claiming such exemption the
Participant shall, prior to any offer of sale or sale of such shares, obtain a
prior favorable written opinion of counsel, in form and substance satisfactory
to counsel for the Corporation, as to the application of such exemption
thereto.
13. GENERAL PROVISIONS.
A. EFFECT ON EMPLOYMENT AND SERVICE. Neither the adoption of
this Plan, its operation, nor any documents describing or referring to this
Plan (or any part thereof) shall (i) confer upon any individual any right to
continue in the employ or service of the Corporation or an Affiliate, (ii) in
any way affect any right and power of the Corporation or an Affiliate to change
an individual's duties or terminate the employment or service of any individual
at any time with or without assigning a reason therefor or (iii) except to the
extent the Committee grants an Option or Stock Award to such individual, confer
on any individual the right to participate in the benefits of this Plan.
B. USE OF PROCEEDS. The proceeds received by the Corporation
from the sale of Common Stock pursuant to this Plan shall be used for general
corporate purposes.
C. UNFUNDED PLAN. This Plan, insofar as it provides for grants,
shall be unfunded, and the Corporation shall not be required to segregate any
assets that may at any time be represented by grants under this Plan. Any
liability of the Corporation to any person with respect to any grant under this
Plan shall be based solely upon any contractual obligations that may be created
pursuant to this Plan. No such obligation of the Corporation shall be deemed
to be secured by any pledge of, or other encumbrance on, any property of the
Corporation.
D. RULES OF CONSTRUCTION. Headings are given to the Sections of
this Plan solely as a convenience to facilitate reference. The reference to
any statute, regulation, or other provision of law shall be construed to refer
to any amendment to or successor of such provision of law.
E. CHOICE OF LAW. This Plan and all Stock Option Agreements and
Stock Award Agreements entered into under this Plan shall be interpreted under
the Corporation Law excluding (to the greatest extent permissible by law) any
rule of law that would cause the application of the laws of any jurisdiction
other than the Corporation Law.
F. FRACTIONAL SHARES. The Corporation shall not be required to
issue fractional shares pursuant to this Plan. The Committee may provide for
elimination of fractional shares or the settlement of such fraction shares in
cash.
G. FOREIGN EMPLOYEES. In order to facilitate the making of any
grant or combination of grants under this Plan, the Committee may provide for
such special terms for Awards to Participants who are foreign nationals, or who
are employed by the Corporation or any Affiliate outside of the United States,
as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to, or amendments, restatements or alternative
versions of, this Plan, as it may consider necessary or appropriate for such
purposes without thereby affecting the terms of this Plan, as then in effect,
unless this Plan could have been amended to eliminate such inconsistency
without further approval by the stockholders of the Corporation.
14. AMENDMENT AND TERMINATION.
The Board may amend or terminate this Plan from time to time; provided,
however, stockholder approval shall be required for any amendment that
(i) increases the aggregate number of shares of Common Stock that may be issued
under this Plan, except as contemplated by Section 5.A or Section 9.B;
(ii) changes the class of employees eligible to receive Incentive Stock
Options; (iii) modifies the restrictions on Repricings set forth in this Plan;
or (iv) is required by the terms of any applicable law, regulation or rule,
including the rules of any market on which the Corporation shares are traded or
exchange on which the Corporation shares are listed. Except as specifically
permitted by this Plan, Stock Option Agreement or Stock Award Agreement or as
required to comply with applicable law, regulation or rule, no amendment shall,
without a Participant's consent, adversely affect any rights of such
Participant under any Option or Stock Award outstanding at the time such
amendment is made; provided, however, that an amendment that may cause an
Incentive Stock Option to become a Nonqualified Stock Option shall not be
treated as adversely affecting the rights of the Participant. Any amendment
requiring stockholder approval shall be approved by the stockholders of the
Corporation within twelve (12) months of the date such amendment is adopted
by the Board.
15. EFFECTIVE DATE OF PLAN; DURATION OF PLAN.
A. This Plan shall be effective upon adoption by the Board,
subject to approval within twelve (12) months by the stockholders of the
Corporation. In the event that the stockholders of the Corporation shall not
approve this Plan within such twelve (12) month period, this Plan shall
terminate. Unless and until the Plan has been approved by the stockholders of
the Corporation, no Option or Stock Award may be exercised, and no shares of
Common Stock may be issued under the Plan. In the event that the stockholders
of the Corporation shall not approve the Plan within such twelve (12) month
period, the Plan and any previously granted Options or Stock Awards shall
terminate.
B. Unless previously terminated, this Plan will terminate ten
(10) years after the earlier of (i) the date this Plan is adopted by the Board,
or (ii) the date this Plan is approved by the stockholders, except that Awards
that are granted under this Plan prior to its termination will continue to be
administered under the terms of this Plan until the Awards terminate or are
exercised.
IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
by a duly authorized officer as of the date of adoption of this Plan by the
Board of Directors.
K-9 CONCEPTS, INC.
By: /s/ Albert Au
------------------------
Albert Au
President and Chief Executive Officer