Attached files
Exhibit 99.1
2010 EQUITY COMPENSATION PLAN
I. ESTABLISHMENT OF PLAN; DEFINITIONS
1. Purpose. The purpose of the Corporation's 2010 Equity Compensation Plan is to
encourage certain, officers, employees, directors and consultants of the
Corporation to acquire and hold stock in the Corporation as an added incentive
to remain with the Corporation and to increase their efforts in promoting the
interests of the Corporation and to enable the Corporation to attract and retain
capable individuals.
2. Definitions. Unless the context clearly indicates otherwise, the following
terms shall have the meanings set forth below:
(a) "Award" shall mean the grant of any Stock Option, Stock Appreciation
Right or Stock Award pursuant to the Plan.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Committee" shall mean a committee made up of at least two members of
the Board whose members shall, from time to time, be appointed by the
Board. If a Committee has not been appointed by the Board, "Committee"
shall mean the Board.
(e) "Corporation" shall mean WESTERN STANDARD ENERGY CORP., a Nevada
corporation.
(f) "Consultants" shall mean individuals or entities who provide services
to the Corporation who are not Employees or Directors.
(g) "Directors" shall mean those members of the Board of Directors of the
Corporation who are not Employees.
(h) "Disability" shall mean a medically determinable physical or mental
condition which causes an Employee, Director or Consultant to be
unable to engage in any substantial gainful activity and which can be
expected to result in death or to be of long-continued and indefinite
duration.
(i) "Employee" shall mean any common law employee, including officers, of
the Corporation as determined under the Code and the Treasury
Regulations thereunder.
(j) "Fair Market Value" with regards to the grant of Stock Options shall
mean (i) if the Stock is listed on a national securities exchange, the
mean between the highest and lowest sales prices for the Stock on such
date, or, if no such prices are reported for such day, then on the
next preceding day on which there were reported prices; (ii) if the
Stock is not listed on a national securities exchange, the closing
price for the shares on such date, or if no such prices are reported
for such day, then on the next preceding day on which there were
reported prices; or (iii) as determined in good faith by the Board.
"Fair Market Value" with regards to Stock Awards shall be determined
by the Board, in good faith and in its sole discretion.
(k) "Grantee" shall mean an officer, Employee, Director or Consultant
granted a Stock Option or Stock Award under this Plan.
(l) "Incentive Stock Option" shall mean an option granted pursuant to the
Incentive Stock Option provisions as set forth in Part II of this
Plan.
(m) "Non-Qualified Stock Option" shall mean an option granted pursuant to
the Non-Qualified Stock Option provisions as set forth in Part III of
this Plan.
(n) "Plan" shall mean the 2010 Equity Compensation Plan as set forth
herein and as amended from time to time.
(o) "Restricted Stock" shall mean Stock which is issued pursuant to the
Restricted Stock as set forth in Part IV of this Plan.
(p) "Stock" shall mean authorized but unissued shares of the Common Stock
of the Corporation or reacquired shares of the Corporation's Common
Stock.
(q) "Stock Appreciation Right" shall mean a stock appreciation right
granted pursuant to the Stock Appreciation Right provisions as set
forth in Part II and III of this Plan.
(r) "Stock Award" shall mean an award of Restricted granted pursuant to
this Plan.
(s) "Stock Option" shall mean an option granted pursuant to the Plan to
purchase shares of Stock.
(t) "Subsidiary" shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with and including the
Corporation, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(u) "Ten Percent Shareholder" shall mean an Employee who at the time a
Stock Option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all stock of the
Corporation or of its parent or subsidiary corporation.
3. Shares of Stock Subject to the Plan. Subject to the provisions of Paragraph 2
of Part V of the Plan, the Stock which may be issued or transferred pursuant to
Stock Options and Stock Awards granted under the Plan and the Stock which is
subject to outstanding but unexercised Stock Options under the Plan shall not
exceed 5,000,000 SHARES in the aggregate. If a Stock Option shall expire and
terminate for any reason, in whole or in part, without being exercised or, if
Stock Awards are forfeited because the restrictions with respect to such Stock
Awards shall not have been met or have lapsed, the number of shares of Stock
which are no longer outstanding as Stock Awards or subject to Stock Options may
again become available for the grant of Stock Awards or Stock Options. There
shall be no terms and conditions in a Stock Award or Stock Option which provide
that the exercise of an Incentive Stock Option reduces the number of shares of
Stock for which an outstanding Non-Qualified Stock Option may be exercised; and
there shall be no terms and conditions in a Stock Award or Stock Option which
provide that the exercise of a Non-Qualified Stock Option reduces the number of
shares of Stock for which an outstanding Incentive Stock Option may be
exercised.
4. Administration of the Plan. The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee shall have
authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the terms and provisions of Stock
Option agreements, and to make all other determinations necessary or advisable
for the administration of the Plan. Any controversy or claim arising out of or
related to this Plan shall be determined unilaterally by and at the sole
discretion of the Committee.
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5. Amendment or Termination. The Board may, at any time, alter, amend, suspend,
discontinue, or terminate this Plan; provided, however, that such action shall
not adversely affect the right of Grantees to Stock Awards or Stock Options
previously granted and no amendment, without the approval of the stockholders of
the Corporation, shall increase the maximum number of shares which may be
awarded under the Plan in the aggregate, materially increase the benefits
accruing to Grantees under the Plan, change the class of Employees eligible to
receive options under the Plan, or materially modify the eligibility
requirements for participation in the Plan.
6. Effective Date and Duration of the Plan. The effective date of the Plan is
the date on which the Plan is adopted by the Board. If the stockholders of the
Corporation do not approve the Plan within 12 months after the Board's adoption
of the Plan, any Incentive Stock Options granted under the Plan will be treated
as Non-Qualified Stock Options. Unless sooner terminated as provided herein, the
Plan shall terminate ten years after the earlier of the Plan's adoption by the
Board and approval by the Company's stockholders.
7. General.
(a) Each Stock Option, Stock Award and Stock Appreciation Right shall be
evidenced by a written instrument (which may be in the form of a unanimous
written consent of the Board) containing such terms and conditions, not
inconsistent with this Plan, as the Committee shall approve.
(b) The granting of a Stock Option, Stock Award or Stock Appreciation Right
in any year shall not give the Grantee any right to similar grants in future
years or any right to be retained in the employ of the Corporation, and all
Employees shall remain subject to discharge to the same extent as if the Plan
were not in effect.
(c) No officer, Employee, Director or Consultant and no beneficiary or
other person claiming under or through him, shall have any right, title or
interest by reason of any Stock Option or any Stock Award to any particular
assets of the Corporation, or any shares of Stock allocated or reserved for the
purposes of the Plan or subject to any Stock Option or any Stock Award except as
set forth herein. The Corporation shall not be required to establish any fund or
make any other segregation of assets to assure the payment of any Stock Option
or Stock Award.
(d) No right under the Plan shall be subject to anticipation, sale,
assignment, pledge, encumbrance, or charge except by will or the laws of descent
and distribution, and a Stock Option shall be exercisable during the Grantee's
lifetime only by the Grantee or his conservator.
(e) Notwithstanding any other provision of this Plan or agreements made
pursuant thereto, the Corporation's obligation to issue or deliver any
certificate or certificates for shares of Stock under a Stock Option or Stock
Award, and the transferability of Stock acquired by exercise of a Stock Option
or grant of a Stock Award, shall be subject to all of the following conditions:
(i) Any registration or other qualification of such shares under any state
or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Board shall, in its
absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(ii) The obtaining of any other consent, approval, or permit from any state
or federal governmental agency which the Board shall, in its absolute
discretion upon the advice of counsel, determine to be necessary or
advisable.
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(f) All payments to Grantees or to their legal representatives shall be
subject to any applicable tax, community property, or other statutes or
regulations of the United States or of any state or country having jurisdiction
thereof. The Grantee may be required to pay to the Corporation the amount of any
withholding taxes which the Corporation is required to withhold with respect to
a Stock Option or its exercise or a Stock Award. In the event that such payment
is not made when due, the Corporation shall have the right to deduct, to the
extent permitted by law, from any payment of any kind otherwise due to such
person all or part of the amount required to be withheld.
(g) In the case of a grant of a Stock Option or Stock Award to any Employee
of a subsidiary of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares, if any, covered by the Stock Option or
Stock Award to the subsidiary, for such lawful consideration as the Committee
may specify, upon the condition or understanding that the subsidiary will
transfer the shares to the Employee in accordance with the terms of the Stock
Option or Stock Award specified by the Committee pursuant to the provisions of
the Plan. For purposes of this Section, a subsidiary shall mean any subsidiary
corporation of the Corporation as defined in Section 424 of the Code.
(h) A Grantee entitled to Stock as a result of the exercise of a Stock
Option or grant of a Stock Award shall not be deemed for any purpose to be, or
have rights as, a shareholder of the Corporation by virtue of such exercise,
except to the extent a stock certificate is issued therefor and then only from
the date such certificate is issued. No adjustments shall be made for dividends
or distributions or other rights for which the record date is prior to the date
such stock certificate is issued. The Corporation shall issue any stock
certificates required to be issued in connection with the exercise of a Stock
Option with reasonable promptness after such exercise.
(i) The grant or exercise of Stock Options granted under the Plan or the
grant of a Stock Award under the Plan shall be subject to, and shall in all
respects comply with, applicable law relating to such grant or exercise, or to
the number of shares of Stock which may be beneficially owned or held by any
Grantee.
(j) The Corporation intends that the Plan shall comply with the
requirements of Rule 16b-3 (the "Rule") under the Securities Exchange Act of
1934, as amended, during the term of this Plan. Should any additional provisions
be necessary for the Plan to comply with the requirements of the Rule, the Board
may amend this Plan to add to or modify the provisions of this Plan accordingly.
(k) The Corporation intends that the Plan shall comply with the
requirements of Section 409A of the Code, to the extent applicable. Should any
changes to the Plan be necessary for the Plan to comply with the requirements of
Code Section 409A the Board may amend this Plan to add to or modify the
provisions of this Plan accordingly.
(l) The Corporation will seek stockholder approval in the manner and to the
degree required under Applicable Laws. If the Corporation fails to obtain
stockholder approval of the Plan within twelve (12) months after the date this
Plan is adopted by the Board, pursuant to Section 422 of the Code, any Option
granted as an Incentive Option at any time under the Plan will not qualify as an
Incentive Option within the meaning of the Code and will be deemed to be a
Non-Qualified Option.
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II. INCENTIVE STOCK OPTION PROVISIONS
1. Granting of Incentive Stock Options.
(a) Only Employees of the Corporation shall be eligible to receive
Incentive Stock Options under the Plan. Officers, Directors and Consultants of
the Corporation who are not also Employees shall not be eligible to receive
Incentive Stock Options.
(b) The purchase price of each share of Stock subject to an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of a share of the
Stock on the date the Incentive Stock Option is granted; provided, however, that
the purchase price of each share of Stock subject to an Incentive Stock Option
granted to a Ten Percent Shareholder shall not be less than 110% of the Fair
Market Value of a share of the Stock on the date the Incentive Stock Option is
granted.
(c) No Incentive Stock Option shall be exercisable more than ten years from
the date the Incentive Stock Option was granted; provided, however, that an
Incentive Stock Option granted to a Ten Percent Shareholder shall not be
exercisable more than five years from the date the Incentive Stock Option was
granted.
(d) The Committee shall determine and designate from time to time those
Employees who are to be granted Incentive Stock Options and specify the number
of shares subject to each Incentive Stock Option.
(e) The Committee, in its sole discretion, shall determine whether any
particular Incentive Stock Option shall become exercisable in one or more
installments, specify the installment dates, and, within the limitations herein
provided, determine the total period during which the Incentive Stock Option is
exercisable. Further, the Committee may make such other provisions as may appear
generally acceptable or desirable to the Committee or necessary to qualify its
grants under the provisions of Section 422 of the Code.
(f) The Committee may grant at any time new Incentive Stock Options to an
Employee who has previously received Incentive Stock Options or other options
whether such prior Incentive Stock Options or other options are still
outstanding, have previously been exercised in whole or in part, or are
cancelled in connection with the issuance of new Incentive Stock Options. The
purchase price of the new Incentive Stock Options may be established by the
Committee without regard to the existing Incentive Stock Options or other
options.
(g) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the option is granted) of the Stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Employee during any calendar year (under all such plans of the Grantee's
employer corporation and its parent and subsidiary corporation) shall not exceed
$100,000.
2. Exercise of Incentive Stock Options. The option price of an Incentive Stock
Option shall be payable on exercise of the option (i) in cash or by check, bank
draft or postal or express money order, (ii) by the surrender of Stock then
owned by the Grantee, (iii) the proceeds of a loan from an independent
broker-dealer whereby the loan is secured by the option or the stock to be
received upon exercise, or (iv) any combination of the foregoing; PROVIDED, that
each such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law. Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Committee may
determine.
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3. Termination of Employment.
(a) If a Grantee's employment with the Corporation is terminated other than
by Disability or death, the terms of any then outstanding Incentive Stock Option
held by the Grantee shall extend for a period ending on the earlier of the date
on which such Stock Option would otherwise expire or three months after such
termination of employment, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment.
(b) If a Grantee's employment with the Corporation is terminated by reason
of Disability, the term of any then outstanding Incentive Stock Option held by
the Grantee shall extend for a period ending on the earlier of the date on which
such Stock Option would otherwise expire or twelve months after such termination
of employment, and such Stock Option shall be exercisable to the extent it was
exercisable as of such last date of employment.
(c) If a Grantee's employment with the Corporation is terminated by reason
of death, the representative of his estate or beneficiaries thereof to whom the
Stock Option has been transferred shall have the right during the period ending
on the earlier of the date on which such Stock Option would otherwise expire or
twelve months after such date of death, to exercise any then outstanding
Incentive Stock Options in whole or in part. If a Grantee dies without having
fully exercised any then outstanding Incentive Stock Options, the representative
of his estate or beneficiaries thereof to whom the Stock Option has been
transferred shall have the right to exercise such Stock Options in whole or in
part.
4. Stock Appreciation Rights
(a) Grant. Stock Appreciation Rights related to all or any portion of an
Incentive Stock Option may be granted by the Committee to any Grantee in
connection with the grant of an Incentive Stock Option or unexercised portion
thereof held by the Grantee at any time and from time to time during the term
thereof. Each Stock Appreciation Right shall be granted at least at Fair Market
Value on the date of grant and be subject to such terms and conditions not
inconsistent with the provisions of this Part II as shall be determined by the
Committee and included in the agreement relating to such Stock Appreciation
Right, subject in any event, however, to the following terms and conditions of
this Section 4. Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it ceases
to be exercisable that are more restrictive than the limitations on the exercise
of the Incentive Stock Option to which it relates.
(b) Exercise. No Stock Appreciation Right shall be exercisable with respect
to such related Incentive Stock Option or portion thereof unless such Incentive
Stock Option or portion shall itself be exercisable at that time. A Stock
Appreciation Right shall be exercised only upon surrender of the related
Incentive Stock Option or portion thereof in respect of which the Stock
Appreciation Right is then being exercised.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a Grantee
shall be entitled to receive an amount equal to the product of (i) the amount by
which the Fair Market Value of a share of Stock on the date of exercise of the
Stock Appreciation Right exceeds the option price per share specified in the
related Incentive Stock Option and (ii) the number of shares of Stock in respect
of which the Stock Appreciation Right shall have been exercised.
(d) Form of Payment. Stock Appreciation Rights may be settled in Stock,
cash or a combination thereof. The number of shares of Stock to be distributed
shall be the largest whole number obtained by dividing the amount otherwise
distributable in respect of such settlement by the Fair Market Value of a share
of Stock on the date of exercise of the Stock Appreciation Right. The value of
fractional shares of Stock shall be paid in cash.
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(e) Effect of Exercise of Right or Related Option. If the related Incentive
Stock Option is exercised in whole or in part, then the Stock Appreciation Right
with respect to the Stock purchased pursuant to such exercise (but not with
respect to any unpurchased Stock) shall be terminated as of the date of exercise
if such Stock Appreciation Right is not exercised on such date.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Grantee other than by will or the laws of
descent and distribution, and shall be exercisable during the Grantee's lifetime
only by the Grantee.
(g) Termination of Employment. If the Grantee ceases to be an Employee of
the Corporation for any reason, each outstanding Stock Appreciation Right shall
be exercisable for such period and to such extent as the related Incentive Stock
Option or portion thereof.
III. NON-QUALIFIED STOCK OPTION PROVISIONS
1. Granting of Stock Options.
(a) Officers, Employees, Directors and Consultants shall be eligible to
receive Non-Qualified Stock Options under the Plan.
(b) The Committee shall determine and designate from time to time those
officers, Employees, Directors and Consultants who are to be granted
Non-Qualified Stock Options and the amount subject to each Non-Qualified Stock
Option.
(c) The Committee may grant at any time new Non-Qualified Stock Options to
an Employee, Director or Consultant who has previously received Non-Qualified
Stock Options or other Stock Options, whether such prior Non-Qualified Stock
Options or other Stock Options are still outstanding, have previously been
exercised in whole or in part, or are cancelled in connection with the issuance
of new Non-Qualified Stock Options.
(d) The Committee shall determine the purchase price of each share of Stock
subject to a Non-Qualified Stock Option. Such price shall not be less than 100%
of the Fair Market Value of such Stock on the date the Non-Qualified Stock
Option is granted.
(e) The Committee, in its sole discretion, shall determine whether any
particular Non-Qualified Stock Option shall become exercisable in one or more
installments, specify the instalment dates, and, within the limitations herein
provided, determine the total period during which the Non-Qualified Stock Option
is exercisable. Further, the Committee may make such other provisions as may
appear generally acceptable or desirable to the Committee, including the
extension of a Non-Qualified Stock Option, provided that such extension does not
extend the option beyond the period specified in paragraph (f) below.
(f) No Non-Qualified Stock Option shall be exercisable more than ten years
from the date such option is granted.
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2. Exercise of Stock Options. The option price of a Non-Qualified Stock Option
shall be payable on exercise of the Stock Option (i) in cash or by check, bank
draft or postal or express money order, (ii) by the surrender of Stock then
owned by the Grantee, (iii) the proceeds of a loan from an independent
broker-dealer whereby the loan is secured by the option or the stock to be
received upon exercise, or (iv) any combination of the foregoing; PROVIDED, that
each such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law. Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Committee may
determine.
3. Termination of Relationship.
(a) If a Grantee's employment with the Corporation is terminated, a
Director Grantee ceases to be a Director, or a Consultant Grantee ceases to be a
Consultant, other than by reason of Disability or death, the terms of any then
outstanding Non-Qualified Stock Option held by the Grantee shall extend for a
period ending on the earlier of the date established by the Committee at the
time of grant or three months after the Grantee's last date of employment or
cessation of being a Director or Consultant, and such Stock Option shall be
exercisable to the extent it was exercisable as of the date of termination of
employment or cessation of being a Director or Consultant.
(b) If a Grantee's employment is terminated by reason of Disability, a
Director Grantee ceases to be a Director by reason of Disability or a Consultant
Grantee ceases to be a Consultant by reason of Disability, the term of any then
outstanding Non-Qualified Stock Option held by the Grantee shall extend for a
period ending on the earlier of the date on which such Stock Option would
otherwise expire or twelve months after the Grantee's last date of employment or
cessation of being a Director or Consultant, and such Stock Option shall be
exercisable to the extent it was exercisable as of such last date of employment
or cessation of being a Director or Consultant.
(c) If a Grantee's employment is terminated by reason of death, a Director
Grantee ceases to be a Director by reason of death or a Consultant Grantee
ceases to be a Consultant by reason of death, the representative of his estate
or beneficiaries thereof to whom the Stock Option has been transferred shall
have the right during the period ending on the earlier of the date on which such
Stock Option would otherwise expire or twelve months following his death to
exercise any then outstanding Non-Qualified Stock Options in whole or in part.
If a Grantee dies without having fully exercised any then outstanding
Non-Qualified Stock Options, the representative of his estate or beneficiaries
thereof to whom the Stock Option has been transferred shall have the right to
exercise such Stock Options in whole or in part.
4. Stock Appreciation Rights
(a) Grant. Stock Appreciation Rights related to all or any portion of a
Non-Qualified Stock Option may be granted by the Committee to any Grantee in
connection with the grant of a Non-Qualified Stock Option or unexercised portion
thereof held by the Grantee at any time and from time to time during the term
thereof. Each Stock Appreciation Right shall be granted at least at Fair Market
Value on the date of grant and be subject to such terms and conditions not
inconsistent with the provisions of this Part III as shall be determined by the
Committee and included in the agreement relating to such Stock Appreciation
Right, subject in any event, however, to the following terms and conditions of
this Section 4. Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it ceases
to be exercisable that are more restrictive than the limitations on the exercise
of the Non-Qualified Stock Option to which it relates.
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(b) Exercise. No Stock Appreciation Right shall be exercisable with respect
to such related Non-Qualified Stock Option or portion thereof unless such
Non-Qualified Stock Option or portion shall itself be exercisable at that time.
A Stock Appreciation Right shall be exercised only upon surrender of the related
Non-Qualified Stock Option or portion thereof in respect of which the Stock
Appreciation Right is then being exercised.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a Grantee
shall be entitled to receive an amount equal to the product of (i) the amount by
which the Fair Market Value of a share of Stock on the date of exercise of the
Stock Appreciation Right exceeds the option price per share specified in the
related Non-Qualified Stock Option and (ii) the number of shares of Stock in
respect of which the Stock Appreciation Right shall have been exercised.
(d) Form of Payment. Stock Appreciation Rights may only be settled in
Stock, cash or any combination thereof. The number of shares of Stock to be
distributed shall be the largest whole number obtained by dividing the amount
otherwise distributable in respect of such settlement by the Fair Market Value
of a share of Stock on the date of exercise of the Stock Appreciation Right. The
value of fractional shares of Stock shall be paid in cash.
(e) Effect of Exercise of Right or Related Option. If the related
Non-Qualified Stock Option is exercised in whole or in part, then the Stock
Appreciation Right with respect to the Stock purchased pursuant to such exercise
(but not with respect to any unpurchased Stock) shall be terminated as of the
date of exercise if such Stock Appreciation Right is not exercised on such date.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Grantee other than by will or the laws of
descent and distribution, and shall be exercisable during the Grantee's lifetime
only by the Grantee.
(g) Termination of Employment. If the Grantee ceases to be an officer,
Employee, Director or Consultant of the Corporation for any reason, each
outstanding Stock Appreciation Right shall be exercisable for such period and to
such extent as the related Non-Qualified Stock Option or portion thereof.
IV. RESTRICTED STOCK AWARDS
1. Grant of Restricted Stock.
(a) Officers, Employees, Directors and Consultants shall be eligible to
receive grants of Restricted Stock under the Plan.
(b) The Committee shall determine and designate from time to time those
officers, Employees, Directors and Consultants who are to be granted Restricted
Stock and the number of shares of Stock subject to such Stock Award.
(c) The Committee, in its sole discretion, shall make such terms and
conditions applicable to the grant of Restricted Stock as may appear generally
acceptable or desirable to the Committee.
2. Termination of Relationship.
(a) If a Grantee's employment with the Corporation, a Director Grantee
ceases to be a Director, or a Consultant Grantee ceases to be a Consultant,
prior to the lapse of any restrictions applicable to the Restricted Stock such
Stock shall be forfeited and the Grantee shall return the certificates
representing such Stock to the Corporation.
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(b) If the restrictions applicable to a grant of Restricted Stock shall
lapse, the Grantee shall hold such Stock free and clear of all such restrictions
except as otherwise provided in the Plan.
V. ADJUSTMENTS UPON MERGER, REORGANIZATION, DISSOLUTION OR CHANGE IN CONTROL
1. Substitution of Options. In the event of a corporate merger or consolidation,
or the acquisition by the Corporation of property or stock of an acquired
corporation or any reorganization or other transaction qualifying under Section
424 of the Code, the Committee may, in accordance with the provisions of that
Section, substitute Stock Options, Stock Awards and Stock Appreciation Rights
under this Plan for Stock Options, Stock Awards and Stock Appreciation Rights
under the plan of the acquired corporation provided (i) the excess of the
aggregate Fair Market Value of the shares of Stock subject to Stock Option
immediately after the substitution over the aggregate option price of such Stock
is not more than the similar excess immediately before such substitution and
(ii) the new Stock Option does not give the Grantee additional benefits,
including any extension of the exercise period. Alternatively, the Committee may
provide, that each Stock Option, Stock Award and Stock Appreciation Right
granted under the Plan shall terminate as of a date to be fixed by the Board;
provided, that no less than thirty days written notice of the date so fixed
shall be given to each holder, and each holder shall have the right, during the
period of fifteen days preceding such termination, to exercise the Stock
Options, Stock Awards and Stock Appreciation Rights as to all or any part of the
Stock covered thereby, including Stock as to which such would not otherwise be
exercisable.
2. Adjustment Provisions.
(a) In the event that a dividend shall be declared upon the Stock payable
in shares of the Corporation's common stock, the number of shares of Stock then
subject to any Stock Option or Stock Award outstanding under the Plan and the
number of shares reserved for the grant of Stock Options or Stock Awards
pursuant to the Plan shall be adjusted by adding to each such share the number
of shares which would be distributable in respect thereof if such shares had
been outstanding on the date fixed for determining the shareholders of the
Corporation entitled to receive such share dividend.
(b) If the shares of Stock outstanding are changed into or exchanged for a
different number or class or other securities of the Corporation or of another
corporation, whether through split-up, merger, consolidation, reorganization,
reclassification or recapitalization then there shall be substituted for each
share of Stock subject to any such Stock Option or Stock Award and for each
share of Stock reserved for the grant of Stock Options or Stock Awards pursuant
to the Plan the number and kind of shares or other securities into which each
outstanding share of Stock shall have been so changed or for which each share
shall have been exchanged.
(c) In the event there shall be any change, other than as specified above
in this Section 2, in the number or kind of outstanding shares of Stock or of
any shares or other securities into which such shares shall have been changed or
for which they shall have been exchanged, then if the Board shall, in its sole
discretion, determine that such change equitably requires an adjustment in the
number or kind of shares theretofore reserved for the grant of Stock Options or
Stock Awards pursuant to the Plan and of the shares then subject to Stock
Options or Stock Awards, such adjustment shall be made by the Board and shall be
effective and binding for all purposes of the Plan and of each Stock Option and
Stock Award outstanding thereunder.
(d) Each Stock Appreciation Right outstanding at the time of any adjustment
pursuant to this Section 2 and the number of outstanding Stock Appreciation
Rights, shall be adjusted, changed or exchanged in the same manner as related
Stock Options.
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(e) In the case of any such substitution or adjustment as provided for in
this Section 2, the option price set forth in each outstanding Stock Option for
each share covered thereby prior to such substitution or adjustment will be the
option price for all shares or other securities which shall have been
substituted for such share or to which such share shall have been adjusted
pursuant to this Section 2, and the price per share shall be adjusted
accordingly.
(f) No adjustment or substitution provided for in this Section 2 shall
require the Corporation to sell a fractional share, and the total substitution
or adjustment with respect to each outstanding Stock Option shall be limited
accordingly.
(g) Upon any adjustment made pursuant to this Section 2 the Corporation
will, upon request, deliver to the Grantee a certificate setting forth the
option price thereafter in effect and the number and kind of shares or other
securities thereafter purchasable on the exercise of such Stock Option.
3. Dissolution or Liquidation. In the event of a proposed dissolution or
liquidation of the Corporation, to the extent an Award has not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action.
4. Change in Control. Notwithstanding Sections 1 and 2 above, in the event of a
Change of Control (as defined below), except as otherwise determined by the
Board, the Grantee shall fully vest in and have the right to exercise the Awards
as to all of the Stock, including Stock as to which it would not otherwise be
vested or exercisable. If an Award becomes fully vested and exercisable as the
result of a Change of Control, the Committee shall notify the Grantee in writing
or electronically prior to the Change of Control that the Award shall be fully
vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Award shall terminate upon the expiration of such period. For
purposes of this Agreement, a "Change of Control" means the happening of any of
the following events:
(a) When any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act") (other than the
Corporation, a Subsidiary or a Corporation employee benefit plan, including any
trustee of such plan acting as trustee) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent (50%) or more of the
combined voting power of the Corporation's then outstanding securities entitled
to vote generally in the election of directors; or
(b) The stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Corporation approve an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation's assets; or
(c) A change in the composition of the Board of the Corporation, as a
result of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are directors of the
Corporation as of the date the Plan is approved by the stockholders, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Corporation).
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VI. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, notion, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan or any Award agreement and against and from any and all amounts paid by
him or her in settlement thereof, with the Corporation's approval, or paid by
him or her in settlement thereof, with the Corporation's approval, or paid by
him or her in satisfaction of any judgment in any such action, suit, or
proceeding against him or her, provided he or she shall give the Corporation an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Corporation's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify them or hold them harmless.
VII. CONDITIONS UPON ISSUANCE OF SHARES
1. Legal Compliance. Stock shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of Stock
shall comply with applicable laws and shall be further subject to the approval
of counsel for the Corporation with respect to such compliance.
2. Investment Representations. As a condition to the exercise of an Award, the
Corporation may require the Grantee exercising such Award to represent and
warrant at the time of any such exercise that the Stock is being purchased only
for investment and without any present intention to sell or distribute such
Stock if, in the opinion of counsel for the Corporation, such a representation
is required.
3. No Rights as Stockholder. No Grantee will have any of the rights of a
stockholder with respect to any Stock until the Stock is issued to the said
Grantee. After Stock is issued to the Grantee, the Grantee will be a stockholder
and will have all the rights of a stockholder with respect to such Stock,
including the right to vote and receive all dividends or other distributions
made or paid with respect to such Stock.
VIII. LEGAL CONSTRUCTION
1. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2. Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
3. Requirements of Law. The granting of Awards and the issuance of Stock under
the Plan shall be subject to all applicable laws.
4. Governing Law. The Plan and all Award agreements shall be construed in
accordance with and governed by the laws of the State of Nevada.
5. Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.
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