Exhibit 4.4
FLEXWEIGHT CORPORATION
1998 STOCK OPTION PLAN
Adopted by the Board of Directors: August 3, 1998
1. Purpose.
The purpose of this plan (the "Plan") is to secure for Flexweight
Corporation(the "Company") and its shareholders the benefits arising from
capital stock ownership by employees or officers of, and consultants or advisors
to, the Company who have contributed to the Company in the past and who are
expected to contribute to the Company's future growth and success. Except where
the context otherwise requires, the term "Company" shall include the parent and
all present and future subsidiaries of the Company as defined in Sections 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from
time to time (the "Code").
2. Type of Stock or Options and Administration.
(a) Types of Stock or Options. The shares of Common Stock issued for
services rendered or the stock options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (the "Board"), or
a Committee (the "Committee") designated by the Board of Directors. The stock
options are non-statutory options and are not intended to meet the requirements
of Section 422 of the Code.
(b) Administration. The Plan will be administered by the Board, whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive. The Board may, to the full extent permitted by or
consistent with applicable laws or regulations (including, without limitation,
applicable state laws and Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3")),
delegate any or all of its powers under the Plan to a Committee appointed by the
Board, and if the Committee is so appointed all references to the "Board" in
this Plan shall mean and relate to such Committee. The Board may in its sole
discretion authorize the issuance of Common Stock for services rendered, or may
grant options to purchase shares of the Company's Common Stock ("Common Stock")
and issue shares upon exercise of such options as provided in the Plan; or the
Board may delegate the power to issue shares or grant options to the Committee.
The Board shall have authority, subject to the express provisions of the Plan,
to construe the respective stock issuance agreements, the option agreements and
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective stock issuance
agreements or option agreements, which need not be identical, and to make all
other determinations in the judgment of the Board necessary or
desirable for the administration of the Plan. The Board may correct any defect
or supply any omission or reconcile any inconsistency in the Plan or in any
stock issuance agreement or option agreement in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. No director or person acting pursuant to
authority delegated by the Board or the Committee shall be liable for any action
or determination under the Plan made in good faith.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 shall apply only to such persons as are
required to file reports under Section 16(a) of the Exchange Act (a "Reporting
Person").
3. Eligibility
(a) General. Options may be granted to persons who are, at the time of
issuance or grant, employees or officers of, or consultants or advisors to, the
Company; and Common Stock or Options may be issued to consultants or advisors
who have rendered (in the case of stock issuances) or are rendering and are
expected to continue to render (in the case of Options) consulting or advisory
services, including Professional advisory services, to the Company, not
involving a capital raising transaction.
(b) Grant of Options to Officers. The selection of an officer (as the
term "officer" is defined for purposes of Rule 16b-3) as a recipient of either
stock or an option, the timing of the stock issuance or the option grant, the
exercise price of the option and the number of shares subject to the issuance or
the option shall be determined either (i) by the Board, or (ii) by two or more
directors having full authority to act in the matter, each of whom shall be a
"disinterested person". For the purposes of the Plan, a director shall be deemed
to be a "disinterested person" only if such person qualifies as a "disinterested
person" within the meaning of Rule 16b- 3, as such term is interpreted from time
to time.
(c) Issuance of Stock. Stock may be issued only to eligible persons
for (i) services (as defined in Section 3(a) above) which have been rendered
(including incidental expenses incurred in connection with the rendering of
services) to the Company, or (ii) upon the exercise of previously granted stock
options.
4. Stock Subject to Plan.
Subject to adjustment as provided in Section 14 below, the maximum number
of shares of Common Stock of the Company which may be issued and sold under the
Plan, including shares issuable pursuant to the exercise of stock options, is
1,500,000 shares. If an option granted under the Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject to such option shall again be available for subsequent option grants or
stock issuances under the Plan.
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5. Forms of Stock Issuance Agreements and Option Agreements.
As a condition to the issuance of Stock or the grant of an option under the
Plan, each recipient of either stock or an option shall execute either an
employee or advisor compensation agreement or an option agreement in such form
not inconsistent with the Plan as may be approved by the Board. Such agreements
may differ among recipients.
6. Purchase Price.
(a) General. The stock issuance price and the purchase price per share
of stock deliverable upon the exercise of an option shall be determined by the
Board.
(b) Payment of Purchase Price. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Company of shares of Common Stock of the Company already owned
and held by the optionee for at least twelve months and having a fair market
value equal in amount to the exercise price of the options being exercised, (ii)
by any other means which the Board determines are consistent with the purpose of
the Plan and with applicable laws and regulations (including, without
limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the
Federal Reserve Board), or (iii) by any combination of such methods of payments.
The fair market value of any shares of the Company's Common Stock or other
non-cash consideration which may be delivered upon exercise of any option shall
be determined by the Board.
7. Option Period.
Each option and all rights thereunder shall expire on such date as shall be
set forth in the applicable option agreement, and options shall be subject to
earlier termination as provided in the Plan.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. Nontransferability of Options.
All options granted to Reporting Persons shall not be assignable or
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transferable by the person to whom they are granted, either voluntarily or by
operation of law, except by will or the laws of descent and distribution, and,
during the life of the optionee, shall be exercisable only by the optionee;
provided, however, that options may be transferred pursuant to a qualified
domestic relations order (as defined in Rule 16b-3).
10. Effect of Termination of Employment or Other Relationship.
(a) Options. Subject to the provisions of the Plan, the Board shall
determine the period of time during which an optionee or his/her valid assigns
may exercise an option following (i) the termination of the optionee's
employment or other relationship with the Company or (ii) the death or
disability of the optionee, but such period shall in no event be less than three
months. Such periods shall be set forth in the agreement evidencing such option.
(b) Stock. Shares of stock that are issued for services rendered
pursuant to this Plan may not be canceled by the Company; provided that when the
shares are issued, the recipient of the shares shall acknowledge having received
full payment for the services previously rendered and shall waive any right to
additional or different payment by the Company for such services.
11. Additional Provisions.
(a) Additional Option Provisions. The Board may, in its sole
discretion, include additional provisions in option agreements covering options
granted under the Plan, including without limitations restrictions on transfer,
repurchase rights, commitments to pay cash bonuses, to make, arrange for or
guaranty loans or to transfer other property to optionees upon exercise of
options, or such provisions as shall be determined by the Board; provided that
such additional provisions shall not be inconsistent with any other term or
condition of the Plan.
(b) Acceleration, Extension, Etc. The Board may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Rule 16b-3.
12. General Restrictions.
The shares issued pursuant to this Plan and each option shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares, including the
shares subject to such option, upon any
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securities exchange or under any state or federal law, or that the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such shares may not be issued or such option may not be exercised,
in whole or in part, unless such listing, registration, qualification, consent
or approval, or satisfaction of such condition shall have been effected or
obtained on conditions acceptable to the Board.
13. Rights as a Shareholder.
The holder of an option shall have no rights as a shareholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
14. Adjustment Provisions for Recapitalizations and Related Transactions.
(a) General. If, through or as a result of any merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities, of the Company or other non-cash assets
are distributed with respect to such shares of Common Stock or other securities,
an appropriate and proportionate adjustment may be made in (x) the maximum
number and kind of shares reserved for issuance under the Plan, (y) the number
and kind of shares or other securities subject to any then outstanding options
under the Plan, and (z) the price for each share subject to any then outstanding
options under the Plan, without changing the aggregate purchase price as to
which such options remain exercisable. Notwithstanding the foregoing, no
adjustment shall be made pursuant to this Section 14 if such adjustment would
cause the Plan to fail to comply with Rule 16b-3.
(b) Board Authority to Make Adjustments.
Any adjustments under this Section 14 will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be
issued under the Plan on account of any such adjustments.
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15. Merger, Consolidation, Asset Sale, Liquidation, Etc.
(a) General. In the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity, or in the event of a liquidation of the Company,
the Board, or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions, as to outstanding options: (i) provide that such options shall be
assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or affiliate thereof), (ii) upon written notice to the
optionees, provide that all unexercised options will terminate immediately prior
to the consummation of such transactions unless exercised by the optionee within
a specified period following the date of such notice, (iii) in the event of a
merger under the terms of which holders of the Common Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the merger ( "Merger Price"), make or provide for a cash payment to the
optionees equal to the difference between (A) the Merger Price times the number
of shares of Common Stock subject to such outstanding options (to the extent
then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options, and (iv) provide that all or any outstanding
options shall become exercisable in full immediately prior to such event.
(b) Substitute Stock or Options. The Company may issue stock or grant
options under the Plan in substitution for stock or options held by employees
of, or consultants or advisors to, another corporation who become employees of
or consultants or advisors to the Company or a subsidiary of the Company, as the
result of a merger or consolidation of the employing corporation with the
Company or a subsidiary of the Company, or as a result of the acquisition by the
Company, or one of its subsidiaries, of property or stock of the employing
corporation. The Company may direct that substitute stock be issued or options
be granted on such terms and conditions as the Board considers appropriate in
the circumstances.
16. No Special Employment Rights.
Nothing contained in the Plan or in any stock issuance or option shall
confer upon any recipient or optionee any right with respect to the continuation
of his or her employment by the Company or interfere in any way with the right
of the Company at any time to terminate such employment or to increase or
decrease the compensation of the recipient or optionee.
17. Amendment of the Plan.
(a) The Board may at any time, and from time to time, modify or amend
the Plan in any respect, except that if at any time the approval of the
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shareholders of the Company is required under any law or rule, the Board may not
effect such modification or amendment without such approval.
(b) The termination or any modification or amendment of the Plan shall
not, without the consent of a recipient of stock or an optionee, affect his or
her rights under stock or an option previously issued or granted to him or her.
With the consent of the recipient or optionee affected, the Board may amend
outstanding stock agreements or option agreements in a manner not inconsistent
with the Plan. The Board shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding stock or option to the extent
necessary to ensure the qualifications of the Plan under Rule 16b-3.
18. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the recipient or optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to any shares
issued or issuable upon exercise of options under the Plan. Subject to the prior
approval of the Company, which may be withheld by the Company in its sole
discretion, the recipient or optionee may elect to satisfy such obligations, in
whole or in part, (i) by causing the Company to withhold shares of Common Stock
otherwise issued or issuable pursuant to the exercise of an option or (ii) by
delivering to the Company shares of Common Stock already owned by the recipient
or the optionee. The shares so delivered or withheld shall have a fair market
value equal to such withholding obligations. The fair market value of the shares
used to satisfy such withholding obligation shall be determined by the Company
as of the date that the amount of tax to be withheld is to be determined. A
recipient or optionee who has made an election pursuant to this Section 18(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.
(b) Notwithstanding the foregoing, in the case of a Reporting Person,
no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3.
19. Cancellation and New Grant of Options, Etc.
The Board shall have the authority to effect, at any time and from time to
time, with the consent of the affected optionees, (i) the cancellation of any or
all outstanding options under the Plan and the grant in substitution thereof of
new options under the Plan covering the same or different numbers of shares of
Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the canceled options or (ii) the
amendment of the terms of any and all outstanding options under the Plan to
provide an option exercise price per share which is higher or lower than the
then-current exercise price per share of such outstanding options.
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20. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by
the Board. Amendments to the Plan shall become effective when adopted by the
Board. Shares may be issued and options may be granted under the Plan at any
time after the effective date and before the date fixed as the termination date
of the Plan.
(b) Termination. Unless sooner expressly terminated in accordance with
the provisions of the Plan, the Plan shall terminate upon the earlier of (i) the
close of business on the day next preceding the tenth anniversary of the date of
its adoption by the Board, or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to the issuance of
shares or the exercise or cancellation of options granted under the Plan. Unless
sooner expressly terminated in accordance with the provisions of the Plan, the
Plan shall terminate with respect to options on the date specified in (ii)
above, then options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
21. Provision for Foreign Participants.
The Board of Directors, may, without amending the Plan, modify stock
issuances or options granted to participants who are foreign nationals or
employed outside the United States to recognize differences in laws, rules,
regulations or customs of such foreign jurisdiction with respect to tax,
securities, currency, employee benefit or other matters.
22. Registration of Shares and Options.
In the Board's discretion, the Board may agree with respect to certain
shares and options issued under the Plan, to prepare and file Registration
Statements on Form S-8, which Registration Statements may include reoffer
prospectuses as that term is defined in Form S-8, to register and continue to
keep effectively registered for resale the shares issued as compensation under
the Plan and the shares of Common Stock issued upon the exercise of options
granted under the Plan.
Adopted by the Board of Directors
August 3, 1998
By: /s/Walter G. Sanders
Walter Sanders
President/Director
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