2005 INDEPENDENT SALES AGENTS' STOCK OPTION PLAN
1. Purpose; Types of Awards; Construction.
The purpose of the AutoInfo, Inc. 2005 Independent Sales Agent Stock
Option Plan (the "Plan") is to align the interests of indenpendent sales agents
of AutoInfo, Inc. (the "Company") and its affiliates with those of the
stockholders of the Company, to afford an incentive to such sales agents to
continue as such, to increase their efforts on behalf of the Company and to
promote the success of the Company's business. To further such purposes, the
Committee may grant options to its independent sales agents to purchase shares
of the Company's common stock. The provisions of the Plan are not intended to
satisfy the requirements of Section 16(b) of the Securities Exchange Act of 1934
and of Section 162(m) of the Internal Revenue Code of 1986, as amended.
As used in this Plan, the following words and phrases shall have the
meanings indicated below:
(a) "Agreement" shall mean a written agreement entered into between
the Company and an Optionee in connection with an award under the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause," when used in connection with the termination of an
Optionee's affiliation by the Company or the cessation of an Optionee's service
as a sales agent, shall mean (i) the conviction of the Optionee for the
commission of a felony, or (ii) the willful and continued failure by the
Optionee substantially to perform his duties and obligations to the Company or a
Subsidiary (other than any such failure resulting from his incapacity due to
physical or mental illness), or (iii) the willful engaging by the Optionee in
misconduct that is demonstrably injurious to the Company or a Subsidiary. For
purposes of this Section 2(c), no act, or failure to act, on an Optionee's part
shall be considered "willful" unless done, or omitted to be done, by the
Optionee in bad faith and without reasonable belief that his action or omission
was in the best interest of the Company. The Committee shall determine whether a
termination is for Cause for purposes of the Plan.
(d) "Change in Control" shall mean the occurrence of the event set
forth in any of the following paragraphs:
(i) any Person (as defined below) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the Company (not
including in the securities benefi-
cially owned by such Person any securities acquired directly from the
Company or its subsidiaries) representing 50% or more of the combined
voting power of the Company's then outstanding securities; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
(iii) there is consummated a merger or consolidation of the
Company or a direct or indirect subsidiary thereof with any other
corporation, other than (A) a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its subsidiaries)
representing 50% or more of the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's
assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such
For purposes of this Section 2(d), "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(e) "Committee" shall mean a committee established by the Board to
administer the Plan.
(f) "Common Stock" shall mean shares of common stock, no par value,
of the Company.
(g) "Company" shall mean AutoInfo, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.
(h) "Disability" shall mean an Optionee's inability to perform his
duties with the Company or on the Board by reason of any medically determinable
physical or mental impairment, as determined by a physician selected by the
Optionee and acceptable to the Company.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.
(j) "Fair Market Value" per share as of a particular date shall mean
(i) if the shares of Common Stock are then listed on a national securities
exchange, the closing sales price per share of Common Stock on the national
securities exchange on which the Common Stock is principally traded for the last
preceding date on which there was a sale of such Common Stock on such exchange,
or (ii) if the shares of Common Stock are then traded in an over-the-counter
market, the closing bid price for the shares of Common Stock in such
over-the-counter market for the last preceding date on which there was a sale of
such Common Stock in such market, or (iii) if the shares of Common Stock are not
then listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee, in its sole discretion, shall determine.
(k) "Nonqualified Option" shall mean an Option that is not an
Incentive Stock Option.
(l) "Option" shall mean the right, granted hereunder, to purchase
shares of Common Stock. Options granted by the Committee pursuant to the Plan
shall be Nonqualified Stock Options.
(m) "Optionee" shall mean a person who receives a grant of an
(n) "Option Price" shall mean the exercise price of the shares of
Common Stock covered by an Option.
(o) "Parent" shall mean any company (other than the Company) in an
unbroken chain of companies ending with the Company if, at the time of granting
an Option, each of the companies other than the Company owns stock possessing
fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other companies in such chain.
(p) "Plan" shall mean this AutoInfo, Inc. 2005 Independent Sales
Agent Stock Option Plan.
(q) "Rule 16b-3" shall mean Rule 16b-3, as from time to time in
effect, promulgated by the Securities and Exchange Commission under Section 16
of the Exchange Act, including any successor to such Rule.
(r) "Subsidiary" shall mean any company (other than the Company) in
an unbroken chain of companies beginning with the Company if, at the time of
granting an Option, each of the companies other than the last company in the
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other companies in
The Plan, except as may otherwise be determined by the Board, shall
be administered by the Board or a Committee thereof.
The Board and/or the Committee shall have the authority in its
discretion, subject to and not inconsistent with the express provisions of the
Plan, to administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or advisable in
the administration of the Plan, including, without limitation, the authority to
grant Options; to determine the purchase price of the shares of Common Stock
covered by each Option; to determine the persons to whom, and the time or times
at which awards shall be granted; to determine the number of shares to be
covered by each award; to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the Agreements (which need not be identical) and to cancel or
suspend awards, as necessary; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
The Board and/or the Committee may not delegate its authority to
grant Options. The Board and/or the Committee may employ one or more persons to
render advice with respect to any responsibility that the Board and/or the
Committee may have under the Plan. All decisions, determination and
interpretations of the Board and/or the Committee shall be final and binding on
all Optionees of any awards under this Plan.
All determinations of the Board and/or the Committee shall be made
by a majority of its members either present in person or participating by
conference telephone at a meeting or by written consent. The Committee may
appoint a secretary and make such rules and regulations for the conduct of its
business as it shall deem advisable, and shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any award
Awards under the Plan may be granted exclusively to independent
sales agents of the Company, and its Subsidiaries. In determining the persons to
whom awards shall be granted and the number of shares to be covered by each
award, the Committee shall take into account the duties of the respective
persons, their present and potential contributions to the success of the Company
and such other factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan.
The maximum number of shares of Common Stock reserved for the grant
of awards under the Plan shall be 2,500,000, subject to adjustment as provided
in Section 9 hereof. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be reacquired by the
If any outstanding award under the Plan should for any reason
expire, be canceled or be forfeited without having been exercised in full, the
shares of Common Stock allocable to the unexercised, canceled or terminated
portion of such award shall (unless the Plan shall have been terminated) become
available for subsequent grants of awards under the Plan.
6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by an
Agreement, in such form and containing such terms and conditions as the
Committee shall from time to time approve, which Agreement shall comply with and
be subject to the following terms and conditions, unless otherwise specifically
provided in such Option Agreement:
(a) Number of Shares. Each Option Agreement shall state the number
of shares of Common Stock to which the Option relates.
(b) Type of Option. Each Option Agreement shall specifically state
that the Option constitutes a Nonqualified Stock Option.
(c) Option Price. Each Option Agreement shall state the Option
Price, which shall not be less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock covered by the Option on the date of
grant. The Option Price shall be subject to adjustment as provided in Section 9
hereof. The date as of which the Board and/or the Committee adopts a resolution
expressly granting an Option shall be considered the day on which such Option is
granted, unless such resolution specifies a different date.
(d) Medium and Time of Payment. The Option Price shall be paid in
full, at the time of exercise, in cash.
(e) Exercise Schedule and Period of Options. Each Option Agreement
shall provide the exercise schedule for the Option as determined by the Board
and/or the Committee; provided, however, that, the Board and/or the Committee
shall have the authority to accelerate the exercisability of any outstanding
Option at such time and under such circumstances as it, in its sole discretion,
deems appropriate. The exercise period shall be ten (10) years from the date of
the grant of the Option unless otherwise determined by the Board and/or the
Committee. The exercise period shall be subject to earlier termination as
provided in Sections 6(f) and 6(g) hereof. An Option may be exercised, as to any
or all full shares of Common Stock as to which the Option has become
exercisable, by written notice delivered in person or by mail to the Secretary
of the Company, specifying the number of shares of Common Stock with respect to
which the Option is being exercised.
(f) Termination. Except as provided in this Section 6(f) and in
Section 6(g) hereof, an Option may not be exercised unless an Optionee who is an
independent sales agent, the Optionee is then providing services to the Company
in such capacity. In the event that the services of an Optionee as a an
independent sales agent shall cease (other than by reason of death, Disability,
or Cause), all Options of such Optionee that are exercisable at the time of such
termination may, unless earlier terminated in accordance with their terms, be
exercised within ninety (90) days after the date of such termination or service
(or such different period as the Board and/or the Committee shall prescribe).
(g) Death or Disability of Optionee. If an Optionee shall die while
affiliated with the Company or a Subsidiary, or within ninety (90) days after
the date of termination of such Optionee's affiliation with the Company (or
within such different period as the Board and/or the Committee may have provided
pursuant to Section 6(f) hereof), or if the Optionee's service shall cease by
reason of Disability, all Options theretofore granted to such Optionee (to the
extent otherwise exercisable) may, unless earlier terminated in accordance with
their terms, be exercised by the Optionee or by his beneficiary, at any time
within one year after the death or Disability of the Optionee (or such different
period as the Committee shall prescribe). In the event that an Option granted
hereunder shall be exercised by the legal representatives of a deceased or
former Optionee, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative to exercise such Option. Unless otherwise determined by the
Committee, Options not otherwise exercisable on the date of termination of
employment shall be forfeited as of such date.
(h) Other Provisions. The Option Agreements evidencing awards under
the Plan shall contain such other terms and conditions not inconsistent with the
Plan as the Board and/or the Committee may determine, including penalties for
the commission of competitive acts.
7. Effect of Certain Changes.
(a) In the event of any extraordinary dividend, stock dividend,
recapitalization, merger, consolidation, stock split, warrant or rights
issuance, or combination or exchange of such shares, or other similar
transactions, each of the number of shares of Common
Stock available for awards, the number of such shares covered by outstanding
awards, and the price per share of Options, as appropriate, shall be equitably
adjusted by the Committee to reflect such event and preserve the value of such
(b) Upon the occurrence of a Change in Control, each Option granted
under the Plan and then outstanding but not yet exercisable shall thereupon
become fully exercisable.
8. Surrender and Exchange of Awards.
The Board and/or the Committee may permit the voluntary surrender of
all or a portion of any Option granted under the Plan or any option granted
under any other plan, program or arrangement of the Company or any Subsidiary
("Surrendered Option"), to be conditioned upon the granting to the Optionee of a
new Option for the same number of shares of Common Stock as the Surrendered
Option, or may require such voluntary surrender as a condition precedent to a
grant of a new Option to such Optionee. Subject to the provisions of the Plan,
such new Option shall be an Nonqualified Stock Option, and shall be exercisable
at the price, during such period and on such other terms and conditions as are
specified by the Board and/or the Committee at the time the new Option is
9. Period During Which Awards May Be Granted.
Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from the date the Plan is adopted by the Board,
unless the Board shall terminate the Plan at an earlier date or extend its term.
10. Nontransferability of Awards.
Except as otherwise determined by the Committee, awards granted
under the Plan shall not be transferable otherwise than by will or by the laws
of descent and distribution, and awards may be exercised or otherwise realized,
during the lifetime of the Optionee, only by the Optionee or by his guardian or
11. Agreement by Optionee Regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise of a
Nonqualified Stock Option (a "Tax Event"), each Optionee shall agree that no
later than the date of the Tax Event, such Optionee will pay to the Company or
make arrangements satisfactory to the Committee regarding payment of any
federal, state or local taxes of any kind required by law to be withheld upon
the Tax Event. Alternatively, the Committee may provide that such an Optionee
may elect, to the extent permitted or required by law, to have the Company
deduct federal, state and local taxes of any kind required by law to be withheld
upon the Tax Event from any payment of any kind due the Optionee. Any decision
made by the Committee under this Section 11 shall be in the Committee's sole
12. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan. Except as provided in Section 7(a) hereof, no
suspension, termination, modification or amendment of the Plan may adversely
affect any award previously granted, unless the written consent of the Optionee
13. Rights as a Shareholder.
An Optionee or a transferee of an award shall have no rights as a
shareholder with respect to any shares covered by the award until the date of
the issuance of a stock certificate to him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distribution of other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 7(a) hereof.
14. No Rights to Service as an Iindependent Sales Agent, or Otherwise.
Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any Optionee the right to an continued
affiliation with Company or any Subsidiary or to be entitled to any remuneration
or benefits not set forth in the Plan or such Agreement or to interfere with or
limit in any way the right of the Company or any such Subsidiary to terminate
such Optionee's service.
An Optionee may file with the Board and/or the Committee a written
designation of a beneficiary on such form as may be prescribed by the Committee
and may, from time to time, amend or revoke such designation. If no designated
beneficiary survives the Optionee, the executor or administrator of the
Optionee's estate shall be deemed to be the Optionee's beneficiary.
16. Governing Law.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.