EXHIBIT 10.1
STOCK SALE PLAN
This Stock Sale Plan (this "Plan") is entered into this 11 day of
August, 2003 between XXXXXX X. XXXXX (the "Participant") and XXXXXX X. XXXXX
& CO. (the "Broker").
RECITALS
The Participant desires to establish this Plan to systematically
sell shares of common stock, par value $0.001 per share (the "Stock"), of
APPLIED DIGITAL SOLUTIONS, INC. (the "Issuer").
The Participant desires to engage the Broker to effect sales of
shares of the Stock in accordance with this Plan.
The Stock is traded on the Nasdaq SmallCap Market (the "Exchange").
AGREEMENT
Therefore, the Participant and the Broker hereby agree as follows:
1. The Broker shall effect a sale (each a "Planned Transaction"),
commencing September 1, 2003 of 50,000 shares of Stock, at a price of $0.50
per share or better, on the 1st day of each month, or the next trading day
if any such specified day is not a trading day, on which the Exchange is
open and the stock trades regular way trading.
2. This Plan shall become effective on the date hereof and shall
terminate on the earliest to occur of:
o 600,000 shares of Stock having been sold; or
o the death of the Participant.
Notwithstanding the foregoing provisions of this Paragraph 2, the
Participant may terminate this Plan at any time by providing written notice
of termination prior to the requested date of termination.
3. The Participant is indebted to the Issuer under that certain
promissory note dated March 23, 1999, in the principal amount $450,000.00
(the "Note"). Currently, $420,000.00 is outstanding under the Note. The
Participant agrees he shall remit the net proceeds (net of broker
commissions, fees, applicable income taxes and other charges, if any)
realized from each Planned Transaction to the Issuer until such time as the
Participant's obligations under the Note are repaid in full.
4. The Participant understands that if the Broker is not able to
effect part or all of a Planned Transaction consistent with ordinary
principles of best execution or due to a market disruption or a legal,
regulatory, or contractual restriction applicable to the Broker, then the
Broker shall effect such Planned Transaction, or part thereof, as promptly
as practical consistent with ordinary principles of best execution
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and after the cessation or termination of any such market disruption,
applicable restriction, or other event, provided that no such Planned
Transaction shall be effected after the termination of this Plan. However,
if at any time the Broker must exercise his discretion in effecting a
Planned Transaction, the Broker must not be aware of any material non-public
information.
5. The Participant represents and warrants that he:
(a) is not currently aware of any material nonpublic
information with respect to the Issuer or any securities of the
Issuer (including the Stock);
(b) is not subject to any legal, regulatory, or
contractual restriction or undertaking that would prevent the
Broker from conducting the Planned Transactions in accordance with
this Plan;
(c) is entering into this Plan in good faith and not as
part of a plan or scheme to evade the prohibitions of SEC Rule
10b5-1;
(d) owns free and clear of any liens, claims, encumbrances
or other restrictions the shares of Stock to be sold under this
Plan;
(e) is an affiliate of the Issuer for purposes of SEC Rule
144; and
(f) is currently able to purchase and sell shares of Stock
in accordance with the Issuer's insider-trading policies and has
obtained the approval of the Issuer's General Counsel (or other
appropriate compliance officer) to enter into this Plan at this
time which approval is evidenced below by the Issuer's
acknowledgement hereof.
6. The Participant shall immediately notify the Broker if the
Participant becomes subject to a legal, regulatory, or contractual
restriction or undertaking that would prevent the Broker from making Planned
Transactions under this Plan, and, in such a case, the Participant and the
Broker shall cooperate to amend or otherwise revise this Plan to take
account of the restriction or undertaking (but neither party shall be
obligated to take any action that would be inconsistent with SEC Rule
10b5-1(c)).
7. It is the parties' intent that this Plan comply with the
requirements of SEC Rule 10b5-1(c)(1) and this Plan shall be interpreted to
comply with the requirements thereof. Any provision of this Plan that cannot
be construed in accordance with Rule 10b5-1(c) shall be void.
8. If the Participant is an "affiliate" of the Issuer for
purposes of SEC Rule 144, as represented by the Participant above, then the
Broker agrees to conduct all Planned Transactions in accordance with the
manner-of-sale requirement of Rule 144, and in no event shall the Broker
effect any such Planned Transaction if it would exceed the then-applicable
volume limitation under Rule 144, assuming that the sales under this Plan
are the only sales subject to that limitation. The Participant agrees not to
take, and agrees to cause any person or entity with which he or she would be
required to aggregate sales of Stock under paragraph (a)(2) or (e) of Rule
144 not to take, any action that would cause any such sale not to comply
with Rule 144. The Participant will be responsible for making all required
Form 144 filings.
9. The Participant acknowledges that the Issuer may suspend the
Planned Transactions at such times and for such periods as may be advisable
to ensure compliance with, among other things,
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applicable securities laws and regulations, rules of the Exchange, or
contractual or accounting requirements in connection with acquisitions or
dispositions by the Issuer or the Issuer's purchases or sales of its
securities. Any such suspension shall be communicated to the Broker in
writing by the Issuer's General Counsel or other appropriate compliance
officer and shall contain an acknowledgment that such suspension is being
made in accordance with Rule 10b5-1(c).
10. The Broker agrees not to use any information about the Planned
Transactions in connection with purchases or sales of, or trading in, any
securities of the Issuer, or derivative securities thereof, or provide other
people with such information or recommend that other people buy or sell
securities based upon such information.
11. The Participant agrees to make, or to assist the Issuer in
making, all filings required under Sections 13(d) and 16 of the Securities
Exchange Act of 1934 (e.g., Forms 4 and 5) with respect to the Planned
Transactions. The Broker shall have no responsibility for any such filings.
12. The Participant agrees that the Issuer, in its discretion, may
publicly disclose the existence and terms of this Plan.
13. All share numbers and dollar amounts set forth in this Plan
shall automatically be adjusted to reflect stock splits, stock dividends,
and similar events occurring after the date hereof.
14. The Participant may trade in securities of the Issuer in
addition to the Planned Transaction, provided that the Participant complies
with the insider-trading policies of the Issuer and applicable regulatory
requirements and the Participant does not enter into or alter a
corresponding or hedging transaction or position with respect to the Planned
Transactions. The Participant agrees to promptly notify the Broker of any
transaction in the Stock by the Participant other than a Planned Transaction
pursuant to this Plan.
15. This Plan may be amended only by a writing executed by the
Participant and the Broker that is acknowledged by the Issuer. Any such
writing shall contain the Participant's representation that he or she knows
of no material nonpublic information regarding the Issuer or any of its
securities (including the Stock) as of the date thereof.
IN WITNESS WHEREOF, the undersigned have signed this Plan as of the
date first written above.
PARTICIPANT
By: /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
BROKER: XXXXXX X. XXXXX & CO.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
Its: Senior Investment Consultant
Acknowledged by:
APPLIED DIGITAL SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Its: Executive Vice President, General Counsel and Secretary
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