Exhibit 10.12
WHITE ROCK ENTERPRISES, LTD.
STOCK OPTION PLAN
1. Purpose of the Plan.
This Plan shall be known as the "White Rock Enterprises, Ltd. Stock Option
Plan" and is hereinafter referred to as the "Plan." The purpose of the Plan is
to aid in maintaining and developing individuals capable of assuring the future
success of White Rock Enterprises, Ltd. (a Nevada corporation), d/b/a ISES
Corporation (the "Company"), to offer such individuals additional incentives to
put forth maximum efforts for the success of the Company, and to afford them an
opportunity to acquire a proprietary interest in the Company through stock
options as provided herein. Options granted under this Plan may be either
incentive stock options ("Incentive Stock Options") within the meaning of
section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
options which do not qualify as Incentive Stock Options ("Non-Statutory Stock
Options").
2. Stock Subject to the Plan.
Except as may be provided by section 12, the Shares of stock to be subject
to options under the Plan shall be Shares of the Company's authorized common
stock ("Shares"). Such Shares may be either authorized but unissued Shares, or
issued Shares which have been reacquired by the Company. Subject to any
adjustment as provided in section 12, the maximum number of Shares on which
options may be exercised under this Plan shall be Five Million (5,000,000)
Shares. If an option under the Plan expires, or for any reason is terminated or
unexercised with respect to any Shares, such Shares shall again be available for
options thereafter granted during the term of the Plan.
3. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the Company
or a special committee of three or more directors of the Company. If a special
committee is to be used, the members of such special committee shall be
appointed by and serve at the pleasure of the Board of Directors. The group
administering the Plan shall be referred to herein as the "Committee."
(b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of this Plan, (i) to determine the purchase
price of the Shares covered by each option, (ii) to determine the individuals to
whom and the time or times at which such options shall be granted and the number
of Shares to be subject to each option, (iii) to determine the terms of exercise
of each option, (iv) to accelerate the time at which all or any part of an
option may be exercised, (v) to amend or modify the terms of any option with the
consent of the optionee, (vi) to interpret the Plan, (vii) to prescribe, amend
and rescind rules and regulations relating to the Plan, (viii) to determine the
terms and provisions of each option agreement under this Plan (which agreements
need not be identical), including the designation of those options intended to
be Incentive Stock Options, and (ix) to make all other determinations necessary
or advisable for the administration of the Plan, subject to the exclusive
authority of the Board of Directors under section 13 to amend or terminate the
Plan. The Committee's determinations on the foregoing matters, unless otherwise
disapproved by the Board of Directors of the Company, shall be final and
conclusive.
(c) The Committee shall select one of its members as its Chair and shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum. All determinations of the Committee shall
be made by not less than a majority of its members. Any decision or
determination reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority vote at
a meeting duly called and held. The granting of an option pursuant to the Plan
shall be effective only if a written agreement shall have been duly executed and
delivered by and on behalf of the Company and the individual to whom such right
is granted. The Committee may appoint a Secretary and may make such rules and
regulations for the conduct of its business as it shall deem advisable.
4. Eligibility.
Options may be granted under this Plan to employees and directors of the
Company and to consultants and other independent contractors rendering services
to the Company. Incentive Stock Options may only be granted to any full or
part-time employee (which term as used herein includes, but is not limited to,
officers and directors who are also employees) of the Company. Members of the
Board of Directors of the Company who are not also employees of the Company
("Non-Employee Directors") and consultants or other independent contractors
shall only be eligible to receive options which do not qualify as Incentive
Stock Options. Except as provided below with respect to Non-Employee Directors
of the Company, the Committee shall determine the persons to whom options shall
be granted and the number of Shares subject to each option. In making its
determinations, the Committee may take into account the nature of services
rendered by any individual, the individual's present and potential contributions
to the success of the Company and such other factors as the Committee in its
discretion shall deem relevant. Any individual (other than a Non-Employee
Director) who has been granted an option under the Plan may be granted an
additional option or options under the Plan if the Committee shall so determine;
provided, however, that to the extent the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of the Shares
with respect to which all Incentive Stock Options are exercisable for the first
time by an employee during any calendar year (under all plans described in
section 422 of the Code of such employee's employer corporation and its parent
and subsidiary corporations described in section 424(e) or 424(f) of the Code)
exceeds $100,000 such options shall be treated as options which do not qualify
as Incentive Stock Options. Incentive Stock Options must be granted within 10
years from the date the Plan is adopted by the Company's Board of Directors.
5. Price.
Except as provided in section 10 for 10% shareholders, the option price
for all Incentive Stock Options granted under the Plan shall be determined by
the Committee but shall not be less than 100% of the fair market value of Shares
at the date of granting of such option. The option price for Non-Statutory Stock
Options granted under the Plan shall also be determined by the Committee except
that, unless otherwise provided herein, the option price for all options granted
to Non-Employee Directors shall be 100% of the fair market value of Shares at
the date of grant. For purposes of the preceding sentences and for all other
valuation purposes under the Plan, the fair market value of the Shares shall be
as reasonably determined by the Committee. If on the date of grant of any option
granted under the Plan, the Shares are not publicly traded, the Committee shall
2
make a good faith attempt to satisfy the option price requirement of this
section 5 and in connection therewith shall take such action as it deems
necessary or advisable.
6. Term.
Except as provided in section 10 for 10% shareholders, each option and all
rights and obligations thereunder shall, subject to the provisions of section 9,
expire on the date determined by the Committee and specified in the option
agreement; provided, however, options granted Non-Employee Directors shall
expire ten (10) years from the date of grant. The Committee shall be under no
duty to provide terms of like duration for options granted under the Plan, but
the term of any option may not extend more than ten (10) years from the date of
granting of such option.
7. Exercise of Option.
(a) The Committee shall have full and complete authority to determine,
subject to section 9, whether options granted to any individual, other than a
Non-Employee Director, will be exercisable in full at any time or from time to
time during the term of the option, and to provide for the exercise thereof in
such installments, upon the occurrence of such events and at such times during
the term of the option as the Committee may determine.
(b) The exercise of any option granted hereunder shall only be effective at
such time as the sale of Shares pursuant to such exercise will not violate any
state or federal securities or other laws.
(c) An optionee electing to exercise an option shall give written notice to
the Company of such election and of the number of Shares subject to such
exercise. The full purchase price of such Shares shall be tendered with such
notice of exercise. Payment shall be made to the Company either (i) in cash
(including check, bank draft or money order), or, at the discretion of the
Committee, (ii) by delivering certificates for Shares already owned by the
optionee having a fair market value equal to the full purchase price of the
Shares, (iii) by authorizing the Company to withdraw whole Shares which would
otherwise be delivered upon exercise of the option having a fair market value,
determined as of the date of exercise, equal to the aggregate purchase price
payable by reason of such exercise or (iv) a combination of (i), (ii) and (iii).
The Committee shall have sole discretion to disapprove of an election pursuant
to any of clauses (ii) - (iv) and in the case of an optionee who is subject to
Section 16 of the Securities Exchange Act of 1934, as amended, the Company may
require that the method of marking such payment be in compliance with Section 16
and the rules and regulations issued thereunder. Until the optionee has been
issued a certificate or certificates for the Shares subject to such exercise,
the optionee shall possess no rights as a stockholder with respect to such
Shares.
8. Restrictions on Transferability.
All Shares acquired upon exercise of the options granted under the Plan
shall be subject to any restrictions, including restrictions on transfer, set
out in the By-Laws of the Company. In addition, the Committee shall have full
and complete authority to determine whether all or any part of the Shares
acquired upon exercise of any of the options granted under the Plan shall be
subject to
3
any other restrictions on the transferability thereof or any other restrictions
affecting in any manner the optionee's rights with respect thereto, but any such
restriction determined by the Committee shall be included in the agreement
relating to such options.
9. Effect of Termination of Service or Death.
(a) In the event that an optionee shall separate from service with the
Company for any reason other than serious misconduct as described in section
9(b) or death or disability as described in section 9(c), such optionee shall
have the right to exercise an option at any time within three months after such
separation from service to the extent of the full number of Shares the optionee
was entitled to purchase under the option on the date of separation, subject to
the condition that no option shall be exercisable after the expiration of the
term of the option.
(b) In the event that an optionee shall separate from service with the
Company by reason of the optionee's serious misconduct during the course of the
optionee's term of service, including, but not limited to wrongful appropriation
of funds from the Company, improper use or disclosure of Company's confidential
information, or the commission of a gross misdemeanor or felony, any option held
by optionee shall be terminated as of the date of the misconduct.
(c) If an optionee shall die prior to separation from service with the
Company or within three months after separation from service for any reason
other than serious misconduct, or if the optionee's service is terminated
because optionee has become disabled (within the meaning of Code section
22(e)(3)) prior to separation from service with the Company and such optionee
shall not have fully exercised an option, such option may be exercised at any
time within twelve months after the optionee's death or the date of such
disability by the optionee or the personal representatives of the optionee, as
applicable, or by any person or persons to whom the option is transferred by
will or the applicable laws of descent and distribution, to the extent of the
full number of Shares the optionee was entitled to purchase under the option on
the date of death (or termination of service, if earlier) and subject to the
condition that no option shall be exercisable after the expiration of the term
of the option.
10. Ten Percent Shareholder Rule.
Notwithstanding any other provision in the Plan, if at the time an option
is otherwise to be granted pursuant to the Plan the optionee owns directly or
indirectly (within the meaning of Code section 424(d)) Shares of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or its parent or subsidiary corporations (within
the meaning of Code sections 424(e) or 424(f)), if any, then any Incentive Stock
Option to be granted to such optionee pursuant to the Plan shall satisfy the
requirements of section 422(c)(5) of the Code, the option price shall be not
less than 110% of the fair market value of the Shares determined as provided in
section 5, and such option by its terms shall not be exercisable after the
expiration of five (5) years from the date such option is granted.
4
11. Non-Transferability.
No option granted under the Plan shall be transferable by an optionee,
otherwise than by will or the laws of descent or distribution as provided in
section 9(c). During the lifetime of an optionee the option shall be exercisable
only by such optionee, except that a duly authorized personal representative may
exercise on behalf of a disabled optionee.
12. Dilution or Other Adjustments.
If there shall be any change in the Shares through merger, consolidation,
reorganization, recapitalization, stock dividend (of whatever amount), stock
split or other change in corporate structure, the Committee may make such
adjustments in the Plan and outstanding options as it, in its sole discretion,
deems appropriate. In the event of any such changes, adjustments may include,
where appropriate, changes in the aggregate number of Shares subject to the Plan
and the number of Shares and the price per share subject to outstanding options,
in order to prevent dilution or enlargement of option rights.
13. Amendment or Discontinuance of Plan.
The Board of Directors may amend or discontinue the Plan at any time.
However, no amendment of the Plan shall, without stockholder approval: (i)
increase the maximum number of Shares under the Plan as provided in section 2,
(ii) decrease the minimum option price provided in section 5, (iii) extend the
maximum option term under section 6, or (iv) materially modify the eligibility
requirements for participation in the Plan. The Board of Directors shall not
alter or impair any rights or obligations under any option previously granted
under the Plan without the consent of the holder of the option.
14. Agreement.
Each award under this Plan shall be evidenced by an Agreement setting forth
the terms and conditions applicable to such award. No award shall be valid until
an agreement is executed by the Company and the recipient of such award and,
upon execution by each party and delivery of the Agreement to the Company, such
award shall be effective as of the effective date set forth in the agreement.
15. No Guaranty of Continued Service.
Nothing in the Plan or in any agreement thereunder shall confer on any
employee, director, independent contractor or consultant any right to continue
in service to the Company or affect, in any way, the right of the Company or its
shareholders to terminate the service of any employee, director, independent
contractor or consultant at any time.
5
16. Tax Withholding.
The Company shall have the right to require, prior to issuance or delivery
of any Shares, payment by the holder of such shares of any Federal, state, local
or other taxes which may be required to be withheld or paid in connection with
such issuance or delivery of my Shares.
17. Effective Date and Termination of Plan.
(a) The Plan was approved by the Board of Directors on March 15, 2000 and
shall be effective as of that date provided it is approved by the shareholders
of the Company within twelve (12) months thereof.
(b) Unless the Plan shall have been discontinued as provided in section 13,
the Plan shall terminate March 15, 2010. No option may be granted after such
termination, but termination of the Plan shall not, without the consent of the
optionee, alter or impair any rights or obligations under any option theretofore
granted.
6