U. S. TECHNOLOGY INC
1996 STOCK OPTION PLAN
ARTICLE I
PURPOSE
U. S. TECHNOLOGY INC (the "Company"), is largely
dependent for the successful conduct of its business on the
initiative, effort and judgment of its officers and
employees. This Stock Option Plan (the "Plan") is intended
to provide the key employees of the Company an incentive
through stock ownership in the Company and encourage them to
remain in the Company's employ. Moreover, since the
Incentive Stock Options and Non-Qualified Stock Options
provided for in the Plan are subject to various alternative
provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), the Committee (as hereinafter defined) will
have considerable latitude in shaping options granted under
the Plan to the particular circumstances of the optionee,
thus recognizing the full incentive value of the option.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board of
Directors (the "Board") of the Company or the Board, at its
option, may delegate the administration of the Plan to a
committee of the Board (the Board and the Committee are
hereinafter collectively or alternatively referred to as the
"Committee") subject to the provisions of this Article II.
All members of the Committee shall be Directors of the
Company and shall be selected by (and serve at the pleasure
of) the Board. Subject to the express provisions of the
Plan, the Committee shall have plenary authority, in its
discretion, to recommend to the Board the individuals within
the class set forth in Article IV to whom, and the time and
price per share at which, options shall be granted, and the
number of shares to be subject to each option. In making
such determination, the Committee may take into account the
nature of the services rendered by the respective employees,
their present and potential contributions to the Company's
success and such other factors as the Committee in its
discretion shall deem relevant. Subject to the express
provisions of the Plan, the Committee shall also have
plenary authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations regulating it, to
recommend to the Board the terms and provisions of the
respective options (which need not be identical) and to make
all other determinations necessary or advisable for the
administration of the Plan. The Committee's determination
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on the matters referred to in this Article II shall be
final, conclusive and binding upon all optionees.
ARTICLE III
AMOUNT OF STOCK AND DURATION OF PLAN
The aggregate amount (subject to adjustment as provided
in Article VIII) of stock which may be purchased pursuant to
options granted under this Plan shall be 600,000 shares of
the Company's Common Stock. Any option granted hereunder
must be granted within ten (10) years from the date of
approval of adoption of the Plan by the Board or the date on
which this Plan is approved by the Company's shareholders,
whichever is earlier. Shares subject to options under the
Plan may, in the sole discretion of the Board, be either
authorized and unissued shares or issued shares which have
been acquired by the Company and are being held in its
treasury. When options have been granted under the Plan and
have lapsed unexercised or partially unexercised, the shares
which were subject thereto may be reoptioned under the Plan.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
All officers and employees of the Company shall be
eligible to receive Stock Options under the Plan.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Each option granted under the Plan shall be evidenced
by a Stock Option Agreement (the "Agreement"), the form of
which shall have been approved by the Committee and Counsel
to the Company. The Agreement shall be executed by the
Company and the optionee and shall set forth the terms and
conditions of the option, which terms and conditions shall
include, but not by way of limitation, the following:
1. Option Price. The option price shall be determined
by the Committee, but shall not in any event be less than
the greater of the (i) par value of the Company's Common
Stock or (ii) the fair market value of the Company's Stock
on the date that the option is granted.
2. Term of Option. The term of the option shall be
selected by the Committee, but in no event shall such term
exceed ten (10) years.
3. Transferability. Options granted hereunder shall
not be transferable otherwise than by will or operation of
the laws of descent and distribution. During the lifetime
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of the optionee, options granted hereunder shall be
exercisable only by the optionee.
4. Termination of Employment. In the event of an
optionee's termination of employment with the Company for
any reason other than death, all options granted hereunder
shall thereupon terminate. The Committee may, in its
discretion, direct that certain Agreements contain provision
permitting exercise of an option after an optionee's
retirement. Upon the termination of an optionee's
employment by reason of his death, such optionee's option(s)
shall terminate to the extent it was not exercisable at the
date of his death. To the extent such options were then
exercisable by the optionee, optionee's estate or the
beneficiaries thereof shall be entitled to exercise such
options for a period of three (3) months from the date of
his death, (unless the option(s) should sooner terminate
according to its own provisions) but not thereafter.
Notwithstanding the other provisions of this subparagraph 4,
no option shall be exercised more than ten (10) years from
the date upon which it is granted.
5. Other Conditions. At its sole discretion, the
Committee may impose other conditions upon the options
granted hereunder, including, but not by way of limitation,
percentage limitations upon the exercise of options granted
hereunder.
If the Plan and the shares of Common Stock reserved for
options hereunder have not been registered under the
Securities Act of 1933, as amended (the "Act"), the
Committee shall satisfy itself that the exemption from
registration afforded by Section 4(2) of the Act will be
available.
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ARTICLE VI
INCENTIVE STOCK OPTIONS
The Committee and the Board, in recommending and
granting stock options hereunder, shall have the discretion
to determine that certain options shall be Incentive Stock
Options, as defined in Section 422A of the Code and the
regulations thereunder, while other options shall be Non-
Qualified Stock Options. Neither the members of the
Committee, the members of the Board nor the Company shall be
under any obligation or incur any liability to any person by
reason of the determination by the Committee or the Board
whether an option granted under the Plan shall be an
Incentive Stock Option or a Non-Qualified Stock Option. The
provisions of this Article VI shall be applicable to all
Incentive Stock Options at any time granted or outstanding
under the Plan.
All Incentive Stock Options granted or outstanding
under the Plan shall be granted and held subject to and in
compliance with the terms and conditions specifically set
forth in Articles II, III, IV, and V hereof and, in
addition, subject to and in compliance with the following
further terms and conditions:
1. The option price of all Incentive Stock Options
shall not be less than one hundred percent (100%) of the
fair market value of the Company's Common Stock at the time
the option is granted (notwithstanding any provision of
Article V hereof to the contrary);
2. No Incentive Stock Option shall be granted to any
person who, at the time of the grant, owns stock possessing
more than ten percent (10%) of the total combined voting
power of the Company. Such ownership limitation will be
waived if (i) the option price is at least one hundred ten
percent (110%) of the fair market value of the Company's
Common Stock at the time the option is granted; and (ii) the
option by its terms must not be exercisable more than five
(5) years from the date it is granted; and,
3. The aggregate fair market value of all shares of
Common Stock (determined at the time of the grant of the
option) exercisable for the first time by an employee during
any calendar year shall not exceed $100,000.
ARTICLE VII
EXERCISE OF OPTIONS
Options granted hereunder may be exercised only by
tendering to the Company written notice of exercise
accompanied by the aggregate purchase price for the shares
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with respect to which the option is being exercised. No
option shall be exercisable unless the shares issuable on
the exercise thereof have been registered under the Act, or
the Company shall have first received the opinion of its
counsel that registration under the Act is not required in
connection with such issuance. At the time of exercise, if
the shares with respect to which the option is being
exercised have not been registered under the Act, the
Company may require the optionee to give the Company
whatever written assurance counsel for the Company may
require that the shares are being acquired for investment
and not with a view to the distribution thereof, and that
the shares will not be disposed of without the written
opinion of such counsel that registration under the Act is
not required. Share certificates issued to the optionee
upon exercise of the option shall bear a legend to the
foregoing effect to the extent counsel for the Company deems
it advisable. The purchase price of shares of Common Stock
of the Company acquired upon the exercise of any Non-
Qualified Stock Option or Incentive Stock Option granted
under the Plan may be paid by an optionee by the payment of
cash, or by the assignment to the Company of shares of the
Company's Common Stock theretofore owned by the optionee
having a value equal to such option price, or by any
combination thereof. For purposes of the Plan, shares of
Common Stock shall be deemed to have a value equal to the
closing bid price for a share for the trading day upon which
such value is being determined.
ARTICLE VIII
ADJUSTMENTS
Subject to any required action by the Company's
Directors and shareholders, the number of shares provided
for in each outstanding option and the price per share
thereof, and the number of shares provided for in the Plan,
shall be proportionately adjusted for any increase or
decrease in the number of issued shares of the Company's
Common Stock resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on
the Common Stock) or any other increase or decrease in the
number of such shares effected without receipt of
consideration by the Company. Subject to any required
action by the Company's Directors and shareholders, if the
Company shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and
apply to the securities to which a holder of the number of
shares of the Company's Common Stock subject to the option
would have been entitled. In the event (hereinafter
collectively referred to as an "Event of Sale or
Liquidation") of: (a) a dissolution or liquidation of the
Company; (b) a merger or consolidation in which the Company
is not the surviving corporation; (c) a sale of all or
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substantially all of the assets of the Company; or (d) a
sale of all or substantially all of the outstanding Common
Stock of the Company to on purchaser, then each outstanding
option shall terminate, provided, however, that in such
event, each optionee shall have the right immediately prior
to any Event of Sale of Liquidation to exercise his option
with respect to the full number of shares covered thereby,
without regard to any installment provision contained in
this Agreement. In the event of a change in the Company's
Common Stock 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
Common Stock within the meaning of the Plan. The aforesaid
adjustment shall be made by the Committee whose
determination in that respect shall be final, binding and
conclusive. Except as hereinbefore expressly provided in
this Article VIII, the optionee shall have no rights by
reason of subdivision or consolidation of shares of stock of
any class or payment of any stock dividend or any other
increase or decrease in the number of shares of any class or
by reason of any Event of Sale or Liquidation, or spin-off
of assets or stock of another corporation; and any issue by
the Company 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 the
Company's Common Stock subject to any option. The grant of
an option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to
dissolve or liquidate or sell or transfer all or any part of
its business or assets.
ARTICLE IX
AMENDMENT OR DISCONTINUANCE
The Board may at any time amend, rescind or terminate
the Plan, as it shall deem advisable, provided, however,
that no change may be made in options theretofore granted
under the Plan (without the consent of the optionees) which
should impair the optionee's rights. Provided, however,
that no amendment to the Plan will be effective unless and
until such amendment has been approved by the holders of a
majority of the Company's outstanding voting stock (voting
as a single class) present, or represented, and entitled to
vote at a duly constituted meeting of such shareholders.
ARTICLE X
SHAREHOLDER APPROVAL
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The Plan shall be effective (the "Effective Date") when
it has received the approval of a majority of the Board of
Directors. However, the Plan and all options granted under
the Plan shall be void if the Plan is not approved by the
holders of a majority of the outstanding voting stock of the
Company (voting as a single class) within twelve (12) months
of the Effective Date.
U. S. TECHNOLOGY INC
BY:
William Meehan, President
ATTEST:
____________________________
Secretary
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INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into by and between
U. S. TECHNOLOGY INC. (the "Company") and _________________
("_________").
WHEREAS, ________________ is a valuable and trusted
employee of the Company and the Company considered it
desirable and in the Company's best interests that
________________________________ be given an inducement to
acquire a propriety interest in the Company and an added
incentive to advance the interests of the Company by
possessing an option to purchase stock of the Company in
accordance with the Incentive Stock Option Plan (the "Plan")
adopted by the Board of Directors (the "Board") of the
Company on _____________________, 19 _____.
NOW THEREFORE, in consideration of the promises, it is
agreed by and between the parties as follows:
1. Grant of Option. The Company hereby grants to
____________ the right, privilege, and option to purchase
_____________________ shares of the Company's Common Stock
at the purchase price of $______ per share, in the manner
and subject to the conditions hereinafter provided and
Article VI of the "Stock Option Plan."
2. Time of Exercise of Options. The aforesaid option
may, until the termination thereof as provided in paragraph
4, be exercised in any increments, subject to Article VI(1)
of the "Stock Option Plan."
Provided that for this purpose any such previously
granted option not having been exercised in full shall be
deemed to remain outstanding until the expiration of the
period during which under its initial term it could have
been exercised.
3. Method of Exercise. The option shall be exercise
by written notice (the "Notice") from ______________________
to the Executive Committee (the "Committee") of the Board.
The Notice shall specify the number of shares of stock for
which the option is being exercised and by accompanied by a
cashier's check for payment in full of the option price for
the number of shares specified. The option shall be deemed
exercised as of the time the Notice is actually received by
the Company. The Company shall make immediate delivery of
such shares, provided that if any law or regulation required
the Company to take any action with respect to the shares
specified in such Notice before the issuance thereof, then
the date of delivery of such shares shall be extended for
the period necessary to take such action.
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4. Termination of Option. Except as otherwise
provided, the option to the extent nor already exercised or
expired by its own terms shall terminate upon the first to
occur of the of the following dates:
(a) Ninety days following the date on which
_____________________, employment (or position as an officer
or director) by the Company is terminated except if such
termination is caused by reason of death or permanent and
total disability.
(b) The expiration of twelve (12) months after the
date on which __________________' employment (or position as
an officer or director) by the Company is terminated, if
such termination is caused by ______________'s death or
_____________________'s permanent and total disability.
(c) Midnight _____________, 199____.
5. Adjustments. Subject to any required action by the
Company's Directors and shareholders, the number of shares
provided for in this option, and the price thereof, shall be
adjusted proportionately upward or downward in accordance
with the provisions of Article VII of the Plan.
6. Rights prior to Exercise of Option. This option is
nontransferable by ____________________ otherwise than by
will or the laws of descent and distribution, and is
exercisable during _____________________' lifetime only by
______________________. ___________ shall have no rights as
a stockholder with respect to the option shares until
payment of the option price and delivery to them of such
shares as herein provided.
7. Restriction of Disposition. All shares acquired by
______________________ pursuant to this Incentive Stock
Option Agreement may be subject to restriction on sale,
encumbrance and other dispositions pursuant to state or
federal law.
8. Notices. The addresses to which all notices
required to be given hereunder shall be sent are, if to the
Company:
U.S. Technologies Inc.
P.O. Box 697
1402 Industrial Blvd.
Lockhart, Texas 78644
and if to ____________________:
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Either party may change his address by giving written notice
to the other party at the indicated address. All notices
given hereunder shall be deemed received when actually
delivered to the indicated address.
9. Stock Option Plan. This Agreement is subject to
and incorporated by reference to all the terms and
conditions set forth in the Plan. In the event of any
conflict between the terms of this Agreement and the Plan,
the terms and conditions of the Plan shall control.
10. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of ___________, 199__.
U. S. TECHNOLOGY INC.
BY:
William Meehan, President
ATTEST:
(Seal)
_________________________
Secretary
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