EXHIBIT 10.3
EQUITEX, INC.
2003 STOCK OPTION PLAN
1. PURPOSES OF AND BENEFITS UNDER THE PLAN. This 2003 Stock Option Plan (the
"Plan") is intended to encourage stock ownership by employees, officers and
directors of EQUITEX, INC., its divisions, Subsidiary corporations and Parent
corporations (the "Corporation"), so that they may acquire or increase their
proprietary interest in the Corporation, to (i) induce qualified persons to
become employees, officers, consultants to or employee directors of the
Corporation; (ii) reward employees and employee directors for past services to
the Corporation and (iii) encourage such persons to remain in the employ of or
associated with the Corporation and to put forth maximum efforts for the success
of the business of the Corporation.
It is intended that options granted by the Committee pursuant to Section
6(a) of this Plan shall constitute "incentive stock options" ("Incentive Stock
Options") within the meaning of Section 422 of the Internal Revenue Code, and
the regulations issued thereunder, and options granted by the Committee pursuant
to Section 6(b) of this Plan shall constitute "non-statutory stock options"
("Non-statutory Stock Options").
2. DEFINITIONS. As used in this Plan, the following words and phrases shall have
the meanings indicated:
a. "Board" means the Board of Directors of the Corporation.
b. "Code" means Internal Revenue Code of 1986, as amended from time to
time.
c. "Committee" means the Compensation Committee appointed by the Board, if
one has been appointed. If no Committee has been appointed, the term
"Committee" shall mean the Board.
d. "Common Stock" means the Corporation's $.02 par value common stock.
e. "Disability" means a Recipient's inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has
lasted or can be expected to last for a continuous period of not less
than 12 months, or such other meaning ascribed in Section 22(e)(3) of
the Code or any successor provision. If the Recipient has a disability
insurance policy, the term "Disability" shall be as defined therein;
provided that said definition is not inconsistent with the meaning
ascribed in Section 22(e)(3) of the Code or any successor provision.
f. "Exchange Act" means Securities Exchange Act of 1934, as amended from
time to time.
g. "Option" means either a Non-statutory Stock Option or Incentive Stock
Option.
h. "Option Price" means the purchase price of the shares of Common Stock
covered by an Option determined in accordance with Section 7(c)
hereunder.
i. "Parent" means any corporation which is a "parent corporation" as
defined in Section 424(e) of the Code, with respect to the Corporation.
j. "Plan" means this 2003 Stock Option Plan.
k. "Recipient" means any person granted an Option hereunder.
l. "Retirement" means retirement from active employment with the
Corporation at or after age 60. The Committee's determination regarding
an individual's retirement shall be conclusive on all parties.
m. "Securities Act" means the Securities Act of 1933, as amended from time
to time.
n. "Subsidiary" means any corporation which is a "subsidiary corporation"
as defined in Section 424(f) of the Code, with respect to the
Corporation.
3. ADMINISTRATION.
a. The Plan shall be administered by the Committee. 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 conferred under the Plan or necessary
or advisable in the administration of the Plan, including the authority to grant
Options; to determine the vesting schedules and other restrictions, if any,
relating to Options; to determine the Option Price; to determine the persons to
whom, and the time or times at which, Options shall be granted; to determine the
number of shares to be covered by each Option; to determine fair market value
per share; to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
Option agreements (which need not be identical) entered into in connection with
Options granted under the Plan; and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan.
b. Options granted under the Plan shall be evidenced by duly adopted
resolutions of the Committee included in the minutes of the meeting at which
they are adopted or in a unanimous written consent.
c. The Committee shall endeavor to administer the Plan and grant Options
hereunder in a manner that is compatible with the obligations of persons subject
to Section 16 of the Exchange Act ("Section 16 Persons"), however compliance
with Section 16 is a personal responsibility of each Section 16 person and is
not the responsibility of the Corporation or the Committee, or any person
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thereof. None of the Committee, the Board or the Corporation shall assume any
legal responsibility for a Recipient's compliance with his obligations under
Section 16 of the Exchange Act. Any Option granted hereunder which would subject
or subjects the Recipient to liability under Section 16(b) of the Exchange Act
is void ab initio as if it had never been granted.
d. No member of the Committee or the Board shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Option
granted hereunder.
4. ELIGIBILITY.
a. Subject to certain limitations hereinafter set forth, Options may be
granted to employees, officers, directors and consultants of the Corporation. In
determining the persons to whom Options shall be granted and the number of
shares to be covered by each Option, the Committee shall take into account the
duties of the respective persons, their present and potential contributions to
the success of the Corporation and such other factors as the Committee shall
deem relevant to accomplish the purposes of the Plan.
b. A Recipient shall be eligible to receive more than one grant of an
Option during the term of the Plan, on the terms and subject to the restrictions
herein set forth.
5. STOCK RESERVED.
a. The stock subject to Options hereunder shall be shares of Common Stock.
Such shares, in whole or in part, may be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Corporation. The
aggregate number of shares of Common Stock as to which Options may be granted
from time to time under the Plan (the "Available Shares") initially shall not
exceed 3,500,000 shares. The number of Available Shares shall be subject to
adjustment as provided in Section 7(i) hereof.
b. If any outstanding Option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares of Common Stock
allocable to the unexercised portion of such Option shall become available for
subsequent grants of Options under the Plan unless the Plan shall have been
terminated.
6. STOCK OPTIONS
a. INCENTIVE STOCK OPTIONS.
(1) Options granted pursuant to this Section 6(a) are intended to
constitute Incentive Stock Options and shall be subject to the
following special terms and conditions, in addition to the general
terms and conditions specified in Section 7 hereof. Only employees
of the Corporation (as the term "employees" is defined for the
purposes of the Internal Revenue Code) shall be entitled to receive
Incentive Stock Options.
(2) The aggregate fair market value (determined as of the date the
Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options granted under this and
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any other plan of the Corporation or any Parent Corporation or
Subsidiary Corporation are exercisable for the first time by any
Recipient during any calendar year may not exceed the amount set
forth in Section 422(d) of the Internal Revenue Code.
(3) Incentive Stock Options granted under this Plan are intended to
satisfy all requirements for incentive stock options under Section
422 of the Internal Revenue Code and the Treasury Regulations
thereunder and, notwithstanding any other provision of this Plan,
the Plan and all Incentive Stock Options granted under it shall be
so construed, and all contrary provisions shall be so limited in
scope and effect and, to the extent they cannot be so limited, they
shall be void.
b. NON-STATUTORY STOCK OPTIONs. Options granted pursuant to this Section
6(b) are intended to constitute Non-statutory Stock Options and shall be subject
only to the general terms and conditions specified in Section 7 hereof.
7. TERMS AND CONDITIONS OF OPTIONS. Each Option granted pursuant to the Plan
shall be evidenced by a written Option agreement between the Corporation and the
Recipient, which agreement substantially shall be in the form of Exhibit A
hereto as modified from time to time by the Committee in its discretion, and
which shall comply with and be subject to the following terms and conditions:
a. NUMBER OF SHARES. Each Option agreement shall state the number of shares
of Common Stock covered by the Option.
b. TYPE OF OPTION. Each Option agreement shall specifically identify the
portion, if any, of the Option which constitutes an Incentive Stock Option and
the portion, if any, which constitutes a Non-statutory Stock Option.
c. OPTION PRICE.
(1) The Option Price of any Non-statutory Stock Option granted under
the Plan shall be fixed by the Committee at the time of grant of
such option and shall not be less than 80% of the fair market value
of the Common Stock at the time the Option is granted. The Committee
shall, in good faith, determine the fair market value of the Common
Stock (without regard to any restrictions other than a restriction
which, by its terms, will never lapse) based upon a reasonable
method of valuation adopted by the Committee, or such other method
as may be permitted by the Code, or regulations or rulings
promulgated thereunder. In no event shall the Option Price be less
than the par value of the Common Stock. The Committee will use its
best efforts to determine the fair market value of the Common Stock
subject to the Option, but neither the Committee or the Company will
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be responsible for the payment of any tax imposed upon the
participants, nor will they reimburse participants for their payment
of any tax so imposed. Neither the Company, the Committee nor any
member thereof shall make any representation or warranty to any
participant regarding federal or state income tax consequences or
effects of participating in the Plan.
(2) The Option Price of any Incentive Stock Option granted under the
Plan to a person owning less than ten percent of the total combined
voting power of the Common Stock shall be at a price not less than
100% of the fair market value per share, determined by the Committee
pursuant to Paragraph 7(c)(1), above, on the date of grant of the
Incentive Stock Option.
(3) The Option Price of any Incentive Stock Option granted under the
Plan to a person owning more than ten percent of the total combined
voting power of the Common Stock shall be at a price not less than
110% of the fair market value per share, determined by the Committee
pursuant to Paragraph 7(c)(1), above, on the date of grant of the
Incentive Stock Option.
(4) The Option Price shall be subject to adjustment as provided in
Section 7(i) hereof.
(5) The date on which the Committee adopts a resolution expressly
granting an option shall be considered the day on which such option
is granted, unless a future date is specified in the resolution.
d. TERM OF OPTIOn. Each Option agreement shall state the period during and
times at which the Option shall be exercisable; provided, however:
(1) The date on which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such Option
is granted, although such grant shall not be effective until the
Recipient has executed an Option agreement with respect to such
Option.
(2) Except as further restricted in paragraph 7(d)(3), the exercise
period shall not exceed ten years from the date of grant of the
option.
(3) The exercise period for Incentive Stock Options granted to a person
owning more than ten percent of the total combined voting power of
the Common Stock of the Corporation shall be for no more than five
years.
(4) The Committee shall have the authority to accelerate or extend the
exercisability of any outstanding option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. No
exercise period may be extended to increase the term of the option
beyond ten years from the date of the grant.
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(5) The exercise period shall be subject to earlier termination as
provided in Sections 7(f) and 7(g) hereof, and furthermore shall be
terminated upon surrender of the Option by the holder thereof if
such surrender has been authorized in advance by the Committee.
e. METHOD OF EXERCISE AND MEDIUM AND TIME OF PAYMENT.
(1) An Option may be exercised as to any or all whole shares of Common
Stock as to which it then is exercisable.
(2) Each exercise of an Option granted hereunder, whether in whole or
in part, shall be by written notice to the secretary of the
Corporation designating the number of shares as to which the Option
is being exercised, and shall be accompanied by payment in full of
the Option Price for the number of shares so designated, together
with any written statements required by any applicable securities
laws.
(3) The Option Price shall be paid in cash, in shares of Common Stock
having a fair market value equal to such Option Price, as determined
by the Committee in its sole discretion, or in a combination of cash
and shares and, subject to approval of the Committee, may be
effected in whole or in part (A) with monies received from the
Corporation at the time of exercise as a compensatory cash payment,
or (B) with monies borrowed from the Corporation pursuant to
repayment terms and conditions as shall be determined from time to
time by the Committee, in its discretion, separately with respect to
each exercise of an Option and each Recipient; provided, however,
that each such method and time for payment and each such borrowing
and the terms and conditions of repayment shall be permitted by and
be in compliance with applicable law.
(4) The Recipient shall make provision for the withholding of taxes as
required by Paragraph 8 hereof.
f. TERMINATION. Except as provided herein or in any option agreement
entered into pursuant hereto, an Option may not be exercised unless the
Recipient then is an employee, officer or director of or consultant to the
Corporation, and unless the Recipient has remained continuously as an employee,
officer or director of or consultant to the Corporation since the date of grant
of the Option.
(1) If the Recipient ceases to be an employee, officer or director of,
or consultant to, the Corporation for cause (other than by reason of
death, Disability or retirement), and except as otherwise provided
in any option agreement for the grant of Non-statutory Stock Options
pursuant to Section 6(b) hereof, all Options theretofore granted to
such Recipient but not theretofore exercised shall immediately
terminate.
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(2) If the Recipient ceases to be an employee, officer or director of,
or consultant to, the Corporation (other than by reason of death,
Disability or retirement), other than for cause, and except as
otherwise provided in any option agreement for the grant of
Non-statutory Stock Options pursuant to Section 6(b) hereof, all
Options theretofore granted to such Recipient but not theretofore
exercised shall terminate three months following the date the
Recipient ceased to be an employee, officer or director of, or
consultant to, the Corporation.
(3) Nothing in the Plan or in any Option granted hereunder shall confer
upon an individual any right to continue in the employ of or other
relationship with the Corporation or interfere in any way with the
right of the Corporation to terminate such employment or other
relationship between the individual and the Corporation.
g. DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. If a Recipient shall die
while an employee, officer or director of or a consultant to the Corporation, or
if the Recipient's employment, officer or director status or consulting
relationship, shall terminate by reason of Disability or Retirement, all Options
theretofore granted to such Recipient, whether or not otherwise exercisable,
unless earlier terminated in accordance with their terms, may be exercised by
the Recipient or by the Recipient's estate or by a person who acquired the right
to exercise such Options by bequest or inheritance or otherwise by reason of the
death or Disability of the Recipient, at any time within one year after the date
of death, Disability or Retirement of the Recipient; provided, however, that in
the case of Incentive Stock Options such one-year period shall be limited to
three months in the case of Retirement.
h. TRANSFERABILITY RESTRICTION.
(1) Options granted under the Plan shall not be transferable other than
by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Internal
Revenue Code or Title I of the Employee Retirement Income Security
Act of 1974, or the rules thereunder. Options may be exercised,
during the lifetime of the Recipient, only by the Recipient and
thereafter only by his or her legal representative.
(2) Any attempted sale, pledge, assignment, hypothecation or other
transfer of an Option contrary to the provisions hereof and the levy
of any execution, attachment or similar process upon an Option shall
be null and void and without force or effect and shall result in a
termination of the Option.
(3) As a condition to the transfer of any shares of Common Stock issued
upon exercise of an Option granted under this Plan, the Corporation
may require an opinion of counsel, satisfactory to the Corporation,
to the effect that such transfer will not be in violation of the
Securities Act or any other applicable securities laws or that such
transfer has been registered under federal and all applicable state
securities laws. Further, the Corporation shall be authorized to
refrain from delivering or transferring shares of Common Stock
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issued under this Plan until the Committee determines that such
delivery or transfer will not violate applicable securities laws and
the Recipient has tendered to the Corporation any federal, state or
local tax owed by the Recipient as a result of exercising the Option
or disposing of any Common Stock when the Corporation has a legal
liability to satisfy such tax. The Corporation shall not be liable
for damages due to delay in the delivery or issuance of any stock
certificate for any reason whatsoever, including, but not limited
to, a delay caused by listing requirements of any securities
exchange or any registration requirements under the Securities Act,
the Exchange Act, or under any other state or federal law, rule or
regulation. The Corporation is under no obligation to take any
action or incur any expense in order to register or qualify the
delivery or transfer of shares of Common Stock under applicable
securities laws or to perfect any exemption from such registration
or qualification. Furthermore, the Corporation will not be liable to
any Recipient for failure to deliver or transfer shares of Common
Stock if such failure is based upon the provisions of this
paragraph.
i. EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock dividends, or through a
recapitalization resulting in stock splits, or combinations or
exchanges of such shares, the number of shares of Common Stock
available for Options and the number of such shares covered by
outstanding Options, and the exercise price per share of the
outstanding Options, shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of
issued shares of Common Stock; provided, however, that any
fractional shares resulting from such adjustment shall be
eliminated.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including, but
not limited to, split-up, split-off or spin-off, or a merger or
consolidation of the Corporation with another corporation, the
Committee may provide that the holder of each Option then
exercisable shall have the right to exercise such Option (at its
then current Option Price) solely for the kind and amount of shares
of stock and other securities, property, cash or any combination
thereof receivable upon such dissolution, liquidation, corporate
separation or division, or merger or consolidation by a holder of
the number of shares of Common Stock for which such Option might
have been exercised immediately prior to such dissolution,
liquidation, or corporate separation or division, or merger or
consolidation; or in the alternative the Committee may provide that
each Option granted under the Plan shall terminate as of a date
fixed by the Committee; provided, however, that not less than 30
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days' written notice of the date so fixed shall be given to each
Recipient, who shall have the right, during the period of 30 days
preceding such termination, to exercise the Option as to all or any
part of the shares of Common Stock covered thereby, including shares
as to which such Option would not otherwise be exercisable.
(3) Paragraph (2) of this Section 7(i) shall not apply to a merger or
consolidation in which the Corporation is the surviving corporation
and shares of Common Stock are not converted into or exchanged for
stock, securities of any other corporation, cash or any other thing
of value. Notwithstanding the preceding sentence, in case of any
consolidation or merger of another corporation into the Corporation
in which the Corporation is the surviving corporation and in which
there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par
value, or as a result of a subdivision or combination, but including
any change in such shares into two or more classes or series of
shares), the Committee may provide that the holder of each Option
then exercisable shall have the right to exercise such Option solely
for the kind and amount of shares of stock and other securities
(including those of any new direct or indirect Parent of the
Corporation), property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by the
holder of the number of shares of Common Stock for which such Option
might have been exercised.
(4) In the event of a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with
a different par value or without par value, the shares resulting
from any such change shall be deemed to be the Common Stock within
the meaning of the Plan.
(5) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive, provided that each Incentive Stock Option
granted pursuant to this Plan shall not be adjusted in a manner that
causes such option to fail to continue to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Internal
Revenue Code.
(6) Except as expressly provided in this Section 7(i), the Recipient
shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend
or any other increase or decrease in the number of shares of stock
of any class or by reason of any dissolution, liquidation, merger,
or consolidation or spin-off of assets or stock of another
corporation; and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common
Stock subject to the Option. The grant of an Option pursuant to the
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Plan shall not affect in any way the right or power of the
Corporation to make adjustments, reclassifications, reorganizations
or changes of its capital or business structures or to merge or to
consolidate or to dissolve, liquidate or sell, or transfer all or
part of its business or assets.
j. RIGHTS AS SHAREHOLDER - NON-DISTRIBUTIVE INTENT.
(1) Neither a person to whom an Option is granted, nor such person's
legal representative, heir, legatee or distributee, shall be deemed
to be the holder of, or to have any rights of a holder with respect
to, any shares subject to such Option until after the Option is
exercised and the shares are issued to the person exercising such
Option.
(2) Upon exercise of an Option at a time when there is no registration
statement in effect under the Securities Act relating to the shares
issuable upon exercise, shares may be issued to the Recipient only
if the Recipient represents and warrants in writing to the
Corporation that the shares purchased are being acquired for
investment and not with a view to the distribution thereof and
provides the Corporation with sufficient information to establish an
exemption from the registration requirements of the Securities Act.
A form of subscription agreement is attached hereto as Exhibit B.
(3) No shares shall be issued upon the exercise of an Option unless and
until there shall have been compliance with any then applicable
requirements of the Securities and Exchange Commission, or any other
regulatory agencies having jurisdiction over the Corporation.
(4) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in
Section 7(i) hereof.
k. Other Provisions. Option Agreements authorized under the Plan shall
contain such other provisions, including, without limitation, (i) the imposition
of restrictions upon the exercise of an option, and (ii) in the case of an
Incentive Stock Option, the inclusion of any condition not inconsistent with
such option qualifying as an Incentive Stock Option, as the Committee shall deem
advisable.
8. AGREEMENT BY RECIPIENT REGARDING TAXES.
a. Each Recipient agrees that upon exercise of an Option granted under this
Plan, in addition to the payment of the Option Price as provided in Section 7(e)
hereof, the Recipient shall pay in cash to the Corporation, an amount sufficient
to allow the Corporation to pay federal, state and local taxes of any kind
required by law to be withheld upon the exercise of such Option from any payment
of any kind otherwise due to the Recipient.
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b. Each Option Recipient must acknowledge the possible availability of an
election under Section 83(b) of the Code, or any successor provision.
9. TERM OF PLAN. Options may be granted under this Plan from time to time within
a period of ten years from the date the Plan is adopted by the Board.
10. AMENDMENT AND TERMINATION OF THE PLAN. The Committee at any time and from
time to time may suspend, terminate, modify or amend the Plan. Except as
provided in Section 7 hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted, unless
the written consent of the Recipient is obtained.
11. ASSUMPTION. Subject to Section 7, the terms and conditions of any
outstanding Options granted pursuant to this Plan shall be assumed by, be
binding upon and shall inure to the benefit of any successor corporation to the
Corporation and continue to be governed by, to the extent applicable, the terms
and conditions of this Plan. Such successor corporation may but shall not be
obligated to assume this Plan.
12. TERMINATION OF RIGHT OF ACTION. Every right of action arising out of or in
connection with the Plan by or on behalf of the Corporation, or by any
shareholder of the Corporation against any past, present or future member of the
Board, or against any employee, or by an employee (past, present or future)
against the Corporation, irrespective of the place where an action may be
brought and of the place of residence of any such shareholder, director or
employee, will cease and be barred by the expiration of three years from the
date of the act or omission in respect of which such right of action is alleged
to have risen or such shorter period as may be provided by law.
13. ADOPTION.
a. This Plan was approved by the Board of Directors of the Corporation on
December 30, 2002.
b. If this Plan is not approved by the shareholders of the Corporation
within 12 months of the date the Plan was approved by the Board as required by
Section 422(b)(1) of the Internal Revenue Code, this Plan and the options
granted hereunder shall be and remain effective for all Recipients, but the
reference to Incentive Stock Options herein shall be deleted and all options
granted hereunder shall be Non-statutory Stock Options pursuant to Section 6(b)
hereof.
c. Notwithstanding any other provision of this Plan, if any person who is
granted options under this Plan prior to shareholder approval of this Plan,
ceases to be an officer or employee of the Company prior to shareholder approval
of this Plan, all options granted to that person shall immediately terminate.
EQUITEX, INC.
By___________________________________
Henry Fong, President
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EXHIBIT A
FORM OF
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of this ___ day of _______, 200__,
between EQUITEX, INC., a Delaware corporation (the "Corporation"), and
________________ (the "Recipient").
In accordance with its 2003 Stock Option Plan (the "Plan"), a copy of
which is attached and is incorporated herein by reference, the Corporation
desires, in connection with the services of the Recipient, to provide the
Recipient with an opportunity to acquire no par value common stock ("Common
Stock") of the Corporation on favorable terms and thereby increase the
Recipient's proprietary interest in the Corporation and as incentive to put
forth maximum efforts for the success of the business of the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Recipient agree as follows:
CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination of the
Compensation Committee of the Board of Directors of the Corporation (the
"Committee") (if such a Committee has been appointed) or in the absence of a
Committee, by the Board of Directors of the Corporation (the "Board) made on
_______, ___ 200__ (the "Date of Grant"), the Corporation, subject to the terms
of the Plan and of this Agreement, confirms that the Recipient has been
irrevocably granted on the Date of Grant, as a matter of separate inducement and
agreement, and in addition to and not in lieu of salary or other compensation
for services, [an Incentive/a Non-statutory] Stock Option pursuant to Section 6
of the Plan (the "Option") to purchase an aggregate of ______ shares of Common
Stock on the terms and conditions herein set forth, subject to adjustment as
provided in Paragraph 8 hereof.
1. OPTION PRICE. The Option Price of shares of Common Stock covered by
the Option will be $_____ per share (the "Option Price") subject to adjustment
as provided in Paragraph 7(i) of the Plan.
2. VESTING OF OPTION. This Option shall vest as follows \\to be
tailored to each optionee\\
3. EXERCISE OF OPTION. Except as otherwise provided in Section 7 of the
Plan, the Option may be exercised in whole or in part at any time during the
term of the Option, provided, however, no Option shall be exercisable after the
expiration of the term thereof, and no Option shall be exercisable unless the
holder shall at the time of exercise have been an employee, officer, consultant
to or employee director of the Corporation for a period of at least three
months.
The Option may be exercised, as provided in this Paragraph 4, by notice
and payment to the Corporation as provided in Paragraph 11 hereof and Section
7(e) of the Plan.
4. TERM OF OPTION. The term of the Option will be through ______ years
from the Date of Grant, subject to earlier termination or cancellation as
provided in this Agreement.
The holder of the Option will not have any rights to dividends or any
other rights of a shareholder with respect to any shares of Common Stock subject
to the Option until such shares shall have been issued upon purchase of such
shares through exercise of the Option.
5. TRANSFERABILITY RESTRICTION. The Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way
(whether by operation of law or otherwise) except in strict compliance with
Section 7(h) of the Plan. Any assignment, transfer, pledge, hypothecation or
other disposition of the Option or any attempt to make any such levy of
execution, attachment or other process will cause the Option to terminate
immediately upon the happening of any such event, provided, however, that any
such termination of the Option under the foregoing provisions of this Paragraph
6 will not prejudice any rights or remedies which the Corporation may have under
this Agreement or otherwise.
6. EXERCISE UPON TERMINATION. The Recipient's rights to exercise this
Option upon termination of employment or cessation as an officer or employee
director shall be as set forth in Section 7(f) of the Plan.
7. DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. The Recipient's rights
to exercise this Option upon the death, Disability or Retirement of the
Recipient shall be as set forth in Section 7(g) of the Plan.
8. ADJUSTMENTS. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 7(i) of the Plan.
9. NO REGISTRATION OBLIGATION. The Recipient understands that the
Option is not registered under the Securities Act of 1933, as amended (the
"Securities Act") and the Corporation has no obligation to register under the
Securities Act the Option or any of the shares of Common Stock subject to and
issuable upon the exercise of the Option. The Recipient represents that the
Option is being acquired by him or her and that such shares of Common Stock will
be acquired by him or her for investment and all certificates for the shares
issued upon exercise of the Option will bear the following legend unless such
shares are registered under the Securities Act prior to their issuance:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
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The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the Recipient and the Corporation
are able to establish the existence of an exemption from registration under the
Securities Act and applicable state laws.
10. NOTICES. Each notice relating to this Agreement will be in writing
and delivered in person or by certified mail to the proper address. Notices to
the Corporation shall be addressed to the Corporation, 7315 East Peakview
Avenue, Englewood, Colorado 80111, Attn: Secretary. Notices to the Recipient or
other person or persons then entitled to exercise the Option shall be addressed
to the Recipient or such other person or persons at the Recipient's address
below specified. Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect given pursuant to this
Paragraph 10.
11. AGREEMENT BY RECIPIENT REGARDING TAXES.
a) The Recipient agrees that upon exercise of an Option, in
addition to the payment of the Option Price as provided in Section 7(e) of the
Plan, the Recipient shall pay in cash to the Corporation, an amount sufficient
to allow the Corporation to pay federal, state and local taxes of any kind
required by law to be withheld upon the exercise of such Option from any payment
of any kind otherwise due to the Recipient.
b) The Recipient acknowledges the possible availability of an
election under Section 83(b) of the Code and agrees to give the Corporation
prompt written notice of any election made by such person under Section 83(b) of
the Code, or any similar provision thereof.
12. SECTION 16 COMPLIANCE. The Recipient acknowledges that it is solely
responsible for filing all reports that may be required under Section 16 of the
Securities Exchange Act of 1934, and that the filing of such reports is not the
responsibility of the Corporation or the Committee, or any person thereof.
13. APPROVAL OF COUNSEL. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended, applicable state securities laws,
the rules and regulations thereunder, and the requirements of any national
securities exchange upon which the Common Stock then may be listed.
14. BENEFITS OF AGREEMENT. This Agreement will inure to the benefit of
and be binding upon each successor and assign of the Corporation. All
obligations imposed upon the Recipient and all rights granted to the Corporation
under this Agreement will be binding upon the Recipient's heirs, legal
representatives and successors.
15. GOVERNMENTAL AND OTHER REGULATIONS. The exercise of the Option and
the Corporation's obligation to sell and deliver shares upon the exercise of
rights to purchase shares is subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency which may, in the opinion of counsel for the Corporation, be required.
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16. INCORPORATION OF THE PLAN. The Plan is attached hereto and
incorporated herein by reference. In the event that any provision in this
Agreement conflicts with a provision in the Plan, the Plan shall govern. All
capitalized terms not otherwise defined herein shall be as defined in the Plan.
Executed in the name and on behalf of the Corporation by one of its
duly authorized officers and by the Recipient all as of the date first above
written.
EQUITEX, INC.
By________________________________
Name___________________________
Title__________________________
The undersigned Recipient understands the terms of this Option
Agreement and the attached Plan and hereby agrees to comply therewith.
Date __________ ___, 20__ _______________________________
Recipient: _____________________
Tax ID Number:_________________
Address: _____________________
-------------------------------
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Exhibit B
FORM OF
SUBSCRIPTION AGREEMENT
THE SECURITIES OF EQUITEX, INC. BEING SUBSCRIBED FOR HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE BLUE SKY OR
SECURITIES LAWS AND ARE OFFERED UNDER EXEMPTIONS FROM THE REGISTRATION
PROVISIONS OF SUCH LAWS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
This Subscription Agreement is entered for the purpose of the
Undersigned acquiring _____________ shares of the $.02 par value common stock
(the "Securities") of EQUITEX, INC., a Delaware corporation (the "Corporation")
from the Corporation upon the exercise of an Option pursuant to the Equitex,
Inc. 2003 Stock Option Plan (the "Plan"). It is understood that no exercise of
an Option at a time when no registration statement relating thereto is effective
under the Securities Act of 1933, as amended (the "Securities Act") can be
completed until the Undersigned executes this Subscription Agreement and
delivers it to the Corporation, and then such exercise is effective only in
accordance with the terms of the Plan and this Subscription Agreement.
In connection with the Undersigned's acquisition of the Securities, the
Undersigned represents and warrants to the Corporation as follows:
1. The Undersigned has been provided with the following information:
\\need to insert at the time of exercise\\ (all of which is referred to herein
as the "Available Information").
2. The Corporation has given the Undersigned the opportunity to ask
questions of and to receive answers from persons acting on the Corporation's
behalf concerning the terms and conditions of this transaction and the
opportunity to obtain any additional reasonable information regarding the
Corporation, its business and financial condition which the Corporation
possesses or can acquire without unreasonable effort or expense.
3. The Securities are being acquired by the Undersigned for his or her
own account and not on behalf of any other person or entity. The Undersigned's
present financial condition is such that it is unlikely that it would be
necessary for the Undersigned to dispose of any portion of the Securities in the
foreseeable future.
4. The Undersigned understands that the Securities being acquired
hereby have not been registered under the Securities Act or any state or foreign
securities laws, and are and will continue to be restricted securities within
the meaning of Rule 144 of the General Rules and Regulations under the
Securities Act and applicable state statutes, and consents to the placement of
an appropriate restrictive legend or legends on any certificates evidencing the
Securities and any certificates issued in replacement or exchange therefor and
acknowledges that the Corporation will cause its stock transfer records to note
such restrictions.
5. By the Undersigned's execution below, it is acknowledged and
understood that the Corporation is relying upon the accuracy and completeness
hereof in complying with certain obligations under applicable securities laws.
6. This Agreement binds and inures to the benefit of the
representatives, successors and permitted assigns of the respective parties
hereto.
7. Incorporation of the Plan. The Plan is attached hereto and
incorporated herein by reference. In the event that any provision in this
Agreement conflicts with a provision in the Plan, the Plan shall govern. All
capitalized terms not otherwise defined herein shall be as defined in the Plan.
(Undersigned)
______________, 20__ ____________________________
Recipient: _________________
Tax ID Number:______________
Address: __________________
____________________________
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