SUNBASE ASIA, INC.
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1995 STOCK OPTION PLAN
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1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
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(a) The 1995 Stock Option Plan (the "1995 Option
Plan") of Sunbase Asia, Inc., a Nevada corporation (the "Company"), is
hereby adopted. The 1995 Option Plan shall provide for the issuance of
incentive stock options ("ISOs") and nonqualified stock options
("NSOs").
(b) The purpose of this 1995 Option Plan is to
promote the long- term success of the Company by attracting,
motivating and retaining key executives, consultants and directors
(the "Participants") through the use of competitive long-term
incentives which are tied to stockholder value. The 1995 Option Plan
seeks to balance Participants' and stockholder interests by providing
incentives to the Participants in the form of stock options which
offer rewards for achieving the long- term strategic and financial
objectives of the Company.
(c) The 1995 Option Plan is intended to provide a
means whereby Participants may be given an opportunity to purchase
shares of Stock of the Company pursuant to (i) options which may
qualify as ISOs under Section 422 of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"), or (ii) NSOs which may
not so qualify.
(d) The term "Affiliates" as used in this 1995
Option Plan means parent or subsidiary corporations, as defined in
Section 424(e) and (f) of the Code (but substituting "the Company" for
"employer corporation"), including parents or subsidiaries which
become such after adoption of the 1995 Option Plan.
2. ADMINISTRATION OF THE PLAN.
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(a) The 1995 Option Plan shall be administered by
the Compensation Committee (the "Committee") appointed by the Board of
Directors of the Company from time to time (the "Board").
(b) The Committee shall consist entirely of
directors qualifying as "disinterested persons" as such term is
defined in Rule 16b-3 promulgated by the Securities and Exchange
Commission (the "Committee"). The Committee shall consist of at least
two Disinterested Directors. Members of the Committee shall serve at
the pleasure of the Board. None of the members of the Committee shall
receive, while serving on the Committee, a grant or award of equity
securities under (i) the 1995 Option Plan or (ii) any other plan of
the Company or its Affiliates under which the participants are
entitled to acquire Stock (including restricted Stock), stock
Exhibit 10.1
options, stock bonuses, related rights or stock appreciation rights of
the Company or any of its Affiliates, other than pursuant to
transactions in any such other plan which do not disqualify a director
from being a disinterested person under Rule 16b-3.
(c) The Committee may from time to time determine
which employees of the Company or its Affiliates or other individuals
or entities (each an "option holder") shall be granted options under
the 1995 Option Plan, the terms thereof (including without limitation
determining whether the option is an incentive stock option and the
times at which the options shall become exercisable), and the number
of shares of Stock for which an option or options may be granted.
(d) If rights of the Company to repurchase Stock are
imposed, the Board or the Committee may, in its sole discretion,
accelerate, in whole or in part, the time for lapsing of any rights of
the Company to repurchase shares of such Stock or forfeiture
restrictions.
(e) If rights of the Company to repurchase Stock are
imposed, the certificates evidencing such shares of Stock awarded
hereunder, although issued in the name of the option holder concerned,
shall be held by the Company or a third party designated by the
Committee in escrow subject to delivery to the option holder or to the
Company at such times and in such amounts as shall be directed by the
Board under the terms of this 1995 Option Plan. Share certificates
representing Stock which is subject to repurchase rights shall have
imprinted or typed thereon a legend or legends summarizing or
referring to the repurchase rights.
(f) The Board or the Committee shall have the sole
authority, in its absolute discretion, to adopt, amend and rescind
such rules and regulations, consistent with the provisions of the 1995
Option Plan, as, in its opinion, may be advisable in the
administration of the 1995 Option Plan, to construe and interpret the
1995 Option Plan, the rules and regulations, and the instruments
evidencing options granted under the 1995 Option Plan and to make all
other determinations deemed necessary or advisable for the
administration of the 1995 Option Plan. All decisions, determinations
and interpretations of the Committee shall be binding on all option
holders under the 1995 Option Plan.
3. STOCK SUBJECT TO THE PLAN.
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(a) "Stock" shall mean Common Stock of the Company
or such stock as may be changed as contemplated by Section 3(c) below.
Stock shall include shares drawn from either the Company's authorized
but unissued shares of Common Stock or from reacquired shares of
Common Stock, including without limitation shares repurchased by the
Company in the open market.
(b) Options may be granted under the 1995 Option
Plan from time to time to eligible persons to purchase an aggregate of
up to 2.5 million shares of
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Stock. Stock options awarded pursuant to the 1995 Option Plan which
are forfeited, terminated, surrendered or cancelled for any reason
prior to exercise shall again become available for grants under the
1995 Option Plan (including any option cancelled in accordance with
the cancellation regrant provisions of Section 6(f) herein).
(c) If there shall be any change in the Stock
subject to the 1995 Option Plan, including Stock subject to any option
granted hereunder, through merger, consolidation, recapitalization,
reorganization, reincorporation, stock split, reverse stock split,
stock dividend, combination or reclassification of the Company's Stock
or other similar events, an appropriate adjustment shall be made by
the Committee in the number of shares and/or the option price with
respect to any unexercised shares of Stock. Consistent with the
foregoing, in the event that the outstanding Stock is changed into
another class or series of capital stock of the Company, outstanding
options to purchase Stock granted under the 1995 Option Plan shall
become options to purchase such other class or series and the
provisions of this Section 3(c) shall apply to such new class or
series.
(d) The Company may grant options under the 1995
Option Plan in substitution for options held by employees of another
company who become employees of the Company as a result of merger or
consolidation. The Company may direct that substitute options be
granted on such terms and conditions as deemed appropriate by the
Board or the Committee.
(e) The aggregate number of shares of Stock approved
by the 1995 Option Plan may not be exceeded without amending the 1995
Option Plan and obtaining stockholder approval within twelve months of
such amendment.
4. ELIGIBILITY.
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Persons who shall be eligible to receive stock options
granted under the 1995 Option Plan shall be those individuals and
entities as the Committee in its discretion determines should be
awarded such incentives given the best interests of the Company;
provided, however, that (i) ISOs may only be granted to employees of
the Company and its Affiliates and (ii) any person holding capital
stock possessing more than 10% of the total combined voting power of
all classes of Stock of the Company or any Affiliate shall not be
eligible to receive ISOs unless the exercise price per share of Stock
is at least 110% of the fair market value of the Stock on the date the
option is granted.
5. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN.
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(a) All ISOs will have option exercise prices per
option share not less than the fair market value of a share of the
Stock on the date the option is granted, except that in the case of
ISOs granted to any person possessing more than
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10% of the total combined voting power of all classes of stock of the
Company or any Affiliate the price shall be not less than 110% of such
fair market value. The price of ISOs or NSOs granted under the 1995
Option Plan shall be subject to adjustment to the extent provided in
Section 3(c) above.
(b) The fair market value on the date of grant shall
be determined based upon the closing price on an exchange on that day
or, if the Stock is not listed on an exchange, on the average of the
closing bid and asked prices in the Over the Counter Market on that
day.
6. TERMS AND CONDITIONS OF OPTIONS.
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(a) Each option granted pursuant to the 1995 Option
Plan shall be evidenced by a written stock option agreement (the
"Option Agreement") executed by the Company and the person to whom
such option is granted. The Option Agreement shall designate whether
the option is an ISO or an NSO.
(b) The term of each ISO and NSO shall be no more
than 10 years, except that the term of each ISO issued to any person
possessing more than 10% of the voting power of all classes of stock
of the Company or any Affiliate shall be no more than 5 years.
Subsequently issued options, if Stock becomes available because of
further allocations or the lapse of previously outstanding options,
will extend for terms determined by the Board or the Committee but in
no event shall an ISO be exercised after the expiration of 10 years
from the date of its grant.
(c) In the case of ISOs, the aggregate fair market
value (determined as of the time such option is granted) of the Stock
to which ISOs are exercisable for the first time by such individual
during any calendar year (under this 1995 Option Plan and any other
plans of the Company or its Affiliates if any) shall not exceed the
amount specified in Section 422(d) of the Internal Revenue Code, or
any successor provision in effect at the time an ISO becomes
exercisable.
(d) The Option Agreement may contain such other
terms, provisions and conditions regarding vesting, repurchase or
other provisions as may be determined by the Committee. To the extent
such terms, provisions and conditions are inconsistent with this 1995
Option Plan, the specific provisions of the Option Agreement shall
prevail. If an option, or any part thereof, is intended to qualify as
an ISO, the Option Agreement shall contain those terms and conditions
which the Committee determine are necessary to so qualify under
Section 422 of the Internal Revenue Code.
(e) The Committee shall have full power and
authority to extend the period of time for which any option granted
under the 1995 Option Plan is to remain exercisable following the
option holder's cessation of service as an employee, director or
consultant, including without limitation cessation as a result of
death or disability;
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provided, however, that in no event shall such option be exercisable
after the specified expiration date of the option term.
(f) The Committee shall have full power and
authority to effect at any time and from time to time, with the
consent of the affected option holders, the cancellation of any or all
outstanding options under the 1995 Option Plan and to grant in
substitution new options under the 1995 Option Plan covering the same
or different numbers of shares of Stock with the same or different
exercise prices.
(g) As a condition to option grants under the 1995
Option Plan, the option holder agrees to grant the Company the
repurchase rights as Company may at its option require and as may be
set forth in a separate repurchase agreement.
(h) Any option granted under the 1995 Option Plan
may be subject to a vesting schedule as provided in the Option
Agreement and, except as provided in this Section 6 herein, only the
vested portion of such option may be exercised at any time during the
Option Period. All rights to exercise any option shall lapse and be of
no further effect whatsoever immediately if the option holder's
service as an employee is terminated for "Cause" (as hereinafter
defined) or if the option holder voluntarily terminates the option
holder's service as an employee. The unvested portion of the option
will lapse and be of no further effect immediately upon any
termination of employment of the option holder for any reason. In the
remaining cases where the option holder's service as an employee is
terminated by the employee voluntarily or due to death, permanent
disability, or is terminated by the Company (or its affiliates)
without Cause at any time, the vested portion of the option will
extend for a period of three (3) months following the termination of
employment and shall lapse and be of no further force or effect
whatsoever only if it is not exercised before the end of such three
(3) month period. "Cause" shall be defined in an Employment Agreement
between Company and option holder and if none there shall be "Cause"
for termination if (i) the option holder is convicted of a felony,
(ii) the option holder engages in any fraudulent or other dishonest
act to the detriment of the Company, (iii) the option holder fails to
report for work on a regular basis, except for periods of authorized
absence or bona fide illness, (iv) the option holder misappropriates
trade secrets, customer lists or other proprietary information
belonging to the Company for the option holder's own benefit or for
the benefit of a competitor, (v) the option holder engages in any
willful misconduct designed to harm the Company or its stockholders,
or (vi) the option holder fails to perform properly assigned duties.
(i) No fractional shares of Stock shall be issued
under the 1995 Option Plan, whether by initial grants or any
adjustments to the 1995 Option Plan.
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7. USE OF PROCEEDS.
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Cash proceeds realized from the sale of Stock under the
1995 Option Plan shall constitute general funds of the Company.
8. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
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(a) The Board may at any time suspend or terminate
the 1995 Option Plan, and may amend it from time to time in such
respects as the Board may deem advisable provided that (i) such
amendment, suspension or termination complies with all applicable
state and federal requirements and requirements of any stock exchange
on which the Stock is then listed, including any applicable
requirement that the 1995 Option Plan or an amendment to the 1995
Option Plan be approved by the stockholders, and (ii) the Board shall
not amend the 1995 Option Plan to increase the maximum number of
shares of Stock subject to ISOs under the 1995 Option Plan or to
change the description or class of persons eligible to receive ISOs
under the 1995 Option Plan without the consent of the stockholders of
the Company sufficient to approve the 1995 Option Plan in the first
instance. The 1995 Option Plan shall terminate on the earlier of (i)
January 2, 2006 or (ii) the date on which no additional shares of
Stock are available for issuance under the 1995 Option Plan.
(b) No option may be granted during any suspension
or after the termination of the 1995 Option Plan, and no amendment,
suspension or termination of the 1995 Option Plan shall, without the
option holder's consent, alter or impair any rights or obligations
under any option granted under the 1995 Option Plan.
(c) The Committee, with the consent of affected
option holders, shall have the authority to cancel any or all
outstanding options under the 1995 Option Plan and grant new options
having an exercise price which may be higher or lower than the
exercise price of cancelled options.
(d) Nothing contained herein shall be construed to
permit a termination, modification or amendment adversely affecting
the rights of any option holder under an existing option theretofore
granted without the consent of the option holder.
9. ASSIGNABILITY OF OPTIONS AND RIGHTS.
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Each option granted pursuant to this 1995 Option Plan
shall, during the option holder's lifetime, be exercisable only by the
option holder, and neither the option nor any right to purchase Stock
shall be transferred, assigned or pledged by the option holder, by
operation of law or otherwise, other than by will upon a beneficiary
designation executed by the option holder and delivered to the Company
or the laws of descent and distribution.
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10. PAYMENT UPON EXERCISE.
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Payment of the purchase price upon exercise of any
option or right to purchase Stock granted under this 1995 Option Plan
shall be made by giving the Company written notice of such exercise,
specifying the number of such shares of Stock as to which the option
is exercised. Such notice shall be accompanied by payment of an amount
equal to the Option Price of such shares of Stock. Such payment may be
(i) cash, (ii) by check drawn against sufficient funds, (iii) by
delivery to the Company of the option holder's promissory note, (iv)
such other consideration as the Committee, in its sole discretion,
determines and is consistent with the 1995 Option Plan's purpose and
applicable law, or (v) any combination of the foregoing. Any Stock
used to exercise options to purchase Stock (including Stock withheld
upon the exercise of an option to pay the purchase price of the shares
of Stock as to which the option is exercised) shall be valued in
accordance with procedures established by the Committee. Any
promissory note used to exercise options to purchase Stock shall be a
full recourse, interest-bearing obligation secured by Stock in the
Company being purchased and containing such terms as the Committee
shall determine. If a promissory note is used to exercise options the
option holder agrees to execute such further documents as the Company
may deem necessary or appropriate in connection with issuing the
promissory note, perfecting a security interest in the stock purchased
with the promissory note and any related terms the Company may
propose. Such further documents may include, without limitation, a
security agreement and an assignment separate from certificate. If
accepted by the Committee in its discretion, such consideration also
may be paid through a broker-dealer sale and remittance procedure
pursuant to which the option holder (I) shall provide irrevocable
written instructions to a designated brokerage firm to effect the
immediate sale of the purchased Stock and remit to the Company, out of
the sale proceeds available on the settlement date, sufficient funds
to cover the aggregate option price payable for the purchased Stock
plus all applicable Federal and State income and employment taxes
required to be withheld by the Company in connection with such
purchase and (II) shall provide written directives to the Company to
deliver the certificates for the purchased Stock directly to such
brokerage firm in order to complete the sale transaction.
11. WITHHOLDING TAXES.
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(a) Shares of Stock issued hereunder shall be
delivered to an option holder only upon payment by such person to the
Company of the amount of any withholding tax required by applicable
federal, state, local or foreign law. The Company shall not be
required to issue any Stock to an option holder until such obligations
are satisfied.
(b) The Committee may, under such terms and
conditions as it deems appropriate, authorize an option holder to
satisfy withholding tax obligations under this Section 11 by
surrendering a portion of any Stock previously issued to the
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option holder or by electing to have the Company withhold shares of
Stock from the Stock to be issued to the option holder, in each case
having a fair market value equal to the amount of the withholding tax
required to be withheld.
12. RATIFICATION.
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This 1995 Option Plan and all options issued under this
1995 Option Plan shall be void unless this 1995 Option Plan is or was
approved or ratified by (i) the Board; and (ii) a majority of the
votes cast at a stockholder meeting at which a quorum representing at
least a majority of the outstanding shares of Stock is (either in
person or by proxy) present and voting on the 1995 Option Plan within
twelve months of the date this 1995 Option Plan is adopted by the
Board. No ISOs shall be exercisable prior to the date such stockholder
approval is obtained.
13. CORPORATE TRANSACTIONS.
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(a) For the purpose of this Section 13, a "Corporate
Transaction" shall include any of the following stockholder-approved
transactions to which the Company is a party:
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the Company's
incorporation;
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the Company in
liquidation or dissolution of the Company; or
(iii) any reverse merger in which the Company
is the surviving entity but in which beneficial ownership of
securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are
transferred to holders different from those who held such securities
immediately prior to such merger.
(b) Upon the occurrence of a Corporate Transaction,
if the surviving corporation or the purchaser, as the case may be,
does not assume the obligations of the Company under the 1995 Option
Plan, then irrespective of the vesting provisions contained in
individual option agreements, all outstanding options shall become
immediately exercisable in full and each option holder will be
afforded an opportunity to exercise their options prior to the
consummation of the merger or sale transaction so that they can
participate on a pro rata basis in the transaction based upon the
number of shares of Stock purchased by them on exercise of options if
they so desire. To the extent that the 1995 Option Plan is unaffected
and assumed by the successor corporation or its parent company a
Corporate Transaction will have no
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effect on outstanding options and the options shall continue in effect
according to their terms.
(c) Each outstanding option under this 1995 Option
Plan which is assumed in connection with the Corporate Transaction or
is otherwise to continue in effect shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply and pertain to
the number and class of securities which would have been issued to the
option holder in connection with the consummation of such Corporate
Transaction had such person exercised the option immediately prior to
such Corporate Transaction. Appropriate adjustments shall also be made
to the option price payable per share, provided the aggregate option
price payable for such securities shall remain the same. In addition,
the class and number of securities available for issuance under this
1995 Option Plan following the consummation of the Corporate
Transaction shall be appropriately adjusted.
(d) The grant of options under this 1995 Option Plan
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
14. LOANS OR GUARANTEE OF LOANS.
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(a) The Committee may, in its discretion, assist any
option holder in the exercise of options granted under this 1995
Option Plan, including the satisfaction of any Federal and State
income and employment tax obligations arising therefrom by (i)
authorizing the extension of a loan from the Company to such option
holder, (ii) permitting the option holder to pay the exercise price
for the Stock in installments over a period of years or (iii)
authorizing a guarantee by the Company of a third party loan to the
option holder. The terms of any loan, installment method of payment or
guarantee (including the interest rate and terms of repayment) will be
upon such terms as the Committee specifies in the applicable option or
issuance agreement or otherwise deems appropriate under the
circumstances. Loans, installment payments and guarantees may be
granted with or without security or collateral (other than to option
holders who are not employees, in which event the loan must be
adequately secured by collateral other than the purchased Stock).
However, the maximum credit available to the option holder may not
exceed the exercise or purchase price of the acquired shares of Stock
plus any Federal and State income and employment tax liability
incurred by the option holder in connection with the acquisition of
such shares of Stock.
(b) The Committee may, in its absolute discretion,
determine that one or more loans extended under this financial
assistance program shall be subject to forgiveness by the Company in
whole or in part upon such terms and conditions as the Committee may
deem appropriate.
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15. REGULATORY APPROVALS.
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The obligation of the Company with respect to Stock
issued under the Plan shall be subject to all applicable laws, rules
and regulations and such approvals by any governmental agencies or
stock exchanges as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Stock under the Plan
until such time as any legal requirements or regulations have been met
relating to the issuance of Stock, to their registration or
qualification under the Securities Exchange Act of 1934, if
applicable, or any applicable state securities laws, or to their
listing on any stock exchange at which time such listing may be
applicable.
16. NO EMPLOYMENT/SERVICE RIGHTS.
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Neither the action of the Company in establishing this
1995 Option Plan, nor any action taken by the Board or the Committee
hereunder, nor any provision of this 1995 Option Plan shall be
construed so as to grant any individual the right to remain in the
employ or service of the Company (or any parent, subsidiary or
affiliated corporation) for any period of specific duration, and the
Company (or any parent, subsidiary or affiliated corporation retaining
the services of such individual) may terminate or change the terms of
such individual's employment or service at any time and for any
reason, with or without cause.
17. MISCELLANEOUS PROVISIONS.
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(a) The provisions of this 1995 Option Plan shall be
governed by the laws of the State of Nevada, as such laws are applied
to contracts entered into and performed in such State, without regard
to its rules concerning conflicts of law.
(b) The provisions of this 1995 Option Plan shall
inure to the benefit of, and be binding upon, the Company and its
successors or assigns, whether by Corporate Transaction or otherwise,
and the option holders, the legal representatives of their respective
estates, their respective heirs or legatees and their permitted
assignees.
(c) The option holders shall have no divided rights,
voting rights or any other rights as a stockholder with respect to any
options under the 1995 Option Plan prior to the issuance of a stock
certificate for such Stock.
(d) If there is a conflict between the terms of any
employment agreement pursuant to which options under this Plan are to
be granted and the provisions of this Plan, the terms of the
employment agreement shall prevail.
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