DYNECO INTERNATIONAL, INC.
1993 CORPORATE STOCK OPTION PLAN
PURPOSE; EFFECTIVENESS OF THE PLAN
The purpose of the DYNECO INTERNATIONAL, INC. 1993 CORPORATE STOCK
OPTION PLAN (the "Plan") is to advance the interests of DynEco International,
Inc. (the "Company") and its stockholders by helping the Company obtain and
retain the services of employees, officers and directors upon whose judgment,
initiative and efforts the Company is substantially dependent, and to provide
those persons with further incentives to advance the interests of the Company.
This Plan will become effective as of May 1, 1993, the date of its
adoption by the Board, subject to the approval of the Plan by the majority
vote of the stockholders of the Company entitled to vote (excluding holders
of shares of Stock issued by the Company pursuant to the exercise of options
granted under this Plan) prior to April 30, 1994. If the Plan is not so
approved by the stockholders of the Company, any options granted under this
Plan will be rescinded and will be void. This Plan will remain in effect
until it is terminated by the Board or the Committee (as defined hereafter)
under Section IX hereof except that no ISO (as defined herein) will be
granted after the tenth anniversary of the date of this Plan's adoption by
the Board. This Plan will be governed by, and construed in accordance with,
the laws of the State of Minnesota.
I. CERTAIN DEFINITIONS
Unless the context otherwise requires, the following defined terms
(together with other capitalized terms defined elsewhere in this Plan) will
govern the construction of this Plan, and of any stock option agreements
entered into pursuant to this Plan:
A. "10% STOCKHOLDER" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth
in Section 424(d) of the Code at the time he or she is granted an
Option, stock possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of the Company
and/or of its subsidiaries;
B. "1933 ACT" means the Securities Act of 1933, as amended;
C. "1934 ACT" means the Securities Exchange Act of 1934, as amended;
1
D. "BOARD" means the Board of Directors of the Company;
E. "CALLED FOR UNDER AN OPTION," or words to similar effect, means
issuable pursuant to the exercise of an Option;
F. "CODE" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to
Sections of the Code as enacted at the time of this Plan's adoption
by the Board and as subsequently amended, or to any substantially
similar successor provisions of the Code resulting from recodification,
renumbering or otherwise);
G. "COMMITTEE" means a committee of two or more individuals, appointed
by the Board, to administer and interpret this Plan; provided that the
term "Committee" will refer to the Board during such times as no
Committee is appointed by the Board;
H. "COMPANY" means DynEco International, Inc., a Minnesota corporation;
I. "DISABILITY" has the same meaning as "permanent and total
disability," as defined in Section 22(e)(3) of the Code;
J. "ELIGIBLE PARTICIPANTS" means persons who, at a particular time, are
employees, officers, or directors of the Company or its subsidiaries;
K. "FAIR MARKET VALUE" means, with respect to the Common Stock, the
following:
1. If the Common Stock is listed or admitted to unlisted trading
privileges on any national securities exchange or is not so listed or
admitted but transactions in the Common Stock are reported on the
NASDAQ National Market System, the last sale price of the Common Stock
on such exchange or reported by the NASDAQ National Market System as
of such date (or, if no shares were traded on such day, as of the next
preceding day on which there was such a trade); or
2. If the Common Stock is not listed or admitted to unlisted trading
privileges or reported on the NASDAQ National Market System, and bid
and asked prices therefor in the over-the-counter market are reported
by the NASDAQ System or the National Quotation Bureau, Inc. (or any
comparable reporting service), the mean of the closing bid and asked
prices as of such date, as so reported by the NASDAQ System, or, if
not so reported thereon, as
2
reported by the National Quotation Bureau, Inc. (or such comparable
reporting service).
3. If the Common Stock is not so listed or admitted to unlisted
trading privileges, or reported on the NASDAQ National Market System,
and such bid and asked prices are not so reported, such price as the
Committee determines in good faith in the exercise of its reasonable
discretion.
L. "ISO" has the same meaning as "incentive stock option," as
defined in Section 422 of the Code;
M. "JUST CAUSE TERMINATION" means a termination by the Company of an
Optionee's employment by and/or service to the Company (or if the
Optionee is a director, removal of the Optionee from the Board by
action of the stockholders or, if permitted by applicable law and the
by-laws of the Company, the other directors), in connection with the
good faith determination of the Company's Board of Directors (or of
the Company's stockholders if the Optionee is a director and the
removal of the Optionee from the Board is by action of the
stockholders, but in either case excluding the vote of the Optionee if
he or she is a director or a stockholder) that the Optionee has engaged
in any acts involving dishonesty or moral turpitude or in any acts that
materially and adversely affect the business, affairs or reputation of
the Company or its subsidiaries;
N. "NSO" means any option granted under this Plan whether designated
by the Committee as a "non-qualified stock option," a "non-statutory
stock option" or otherwise, other than an option designated by the
Committee as an ISO, or any option so designated but which, for any
reason, fails to qualify as an ISO pursuant to Section 422 of the Code
and the rules and regulations thereunder;
O. "OPTION" means an option granted pursuant to this Plan entitling
the option holder to acquire shares of Stock issued by the Company
pursuant to the valid exercise of the option;
P. "OPTION AGREEMENT" means an agreement between the Company and an
Optionee, in form and substance satisfactory to the Committee in its
sole discretion, consistent with this Plan;
Q. "OPTION PRICE" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of the
Option Stock called for under such Option;
3
R. "OPTION STOCK" means Common Stock issued or issuable by the
Company pursuant to the valid exercise of an Option;
S. "OPTIONEE" means an Eligible Participant to whom Options are
granted hereunder, and any transferee thereof pursuant to a Transfer
authorized under this Plan;
T. "PLAN" means this 1993 Corporate Stock Option Plan of the Company;
U. "PREVIOUSLY ACQUIRED SHARES" means shares of Company Common Stock
that are already owned by the Eligible Participant;
V. "STOCK" means shares of the Company's Common Stock, no par value;
W. "SUBSIDIARY" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code;
X. "TRANSFER," with respect to Option Stock, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer,
conveyance, pledge, hypothecation, encumbrance, disposal, loan, gift,
attachment or levy of such Option Stock, including without limitation
an assignment for the benefit of creditors of the Optionee, a transfer
by operation of law, such as a transfer by will or under the laws of
descent and distribution, an execution of judgment against the Option
Stock or the acquisition of record or beneficial ownership thereof by a
lender or creditor, a transfer pursuant to a QDRO, or to any decree of
divorce, dissolution or separate maintenance, any property settlement,
any separation agreement or any other agreement with a spouse (except
for estate planning purposes) under which a part or all of the shares
of Option Stock are transferred or awarded to the spouse of the
Optionee or are required to be sold; or a transfer resulting from the
filing by the Optionee of a petition for relief, or the filing of an
involuntary petition against such Optionee, under the bankruptcy laws
of the United States or of any other nation.
II. ELIGIBILITY
Participants in the Plan shall be those Eligible Participants who, in
the judgment of the Committee, are performing, or during the term of an
option will perform, services in management, operation and development of the
Company or any Subsidiary, and significantly contributed, are significantly
contributing or are expected to significantly contribute to the achievement
of corporate objectives. Eligible Participants may be granted from
4
time to time one or more Options, as may be determined by the Committee in
its sole discretion. The number, type, terms and conditions of the Options
granted to various Eligible Participants need not be uniform, consistent or
in accordance with any plan, regardless of whether such Eligible Participants
are similarly situated. Upon determination by the Committee that an Option is
to be granted to an Eligible Participant, written notice shall be given such
person, specifying the terms, conditions, rights and duties related thereto.
Each Eligible Participant to whom an Option is to be granted shall enter into
an agreement with the Company, in such form as the Committee shall determine
and which is consistent with the provisions of the Plan, specifying such
terms, conditions, rights and duties. Options shall be deemed to be granted
as of the date specified in the grant resolution of the Committee, and the
related option agreements shall be dated as of such date.
III. ADMINISTRATION
A. COMMITTEE. The Committee, if appointed by the Board, will
administer this Plan. If the Board, in its discretion, does not appoint such
a Committee, the Board itself will administer this Plan and take such other
actions as the Committee is authorized to take hereunder; provided that the
Board may take such actions hereunder in the same manner as the Board may
take other actions under the Company's articles of incorporation and by-laws
generally.
A majority of the Committee shall constitute a quorum. Action of such
Committee may be taken without a meeting if unanimous written consent is
given. Such Committee shall act by majority approval of the members, shall
keep minutes of its meetings and written action, and shall provide copies of
such minutes to the Board. Copies of the minutes and written action shall be
kept with the written records of the Company.
From and after the date on which the Company first registers a class of
its equity securities under Section 12 of the 1934 Act, the Plan shall be
administered by the Board, all of whom shall be "disinterested persons"
within the meaning of Rule 16b-3 under the 1934 Act, or a committee
consisting solely of not fewer than two members of the Board who are such
"disinterested persons."
B. AUTHORITY AND DISCRETION OF COMMITTEE. The Committee will have full
and final authority in its discretion, at any time and from time to time,
subject only to the express terms, conditions and other provisions of the
Company's articles of incorporation, by-laws and this Plan, and the specific
limitations on such discretion set forth herein:
1. to select and approve the persons who will be granted Options under
this Plan from among the Eligible Participants,
5
and to grant to any person so selected one or more Options to purchase
such number of shares of Option Stock as the Committee may determine;
2. to determine the period or periods of time during which options may
be exercised, the Option Price and the duration of such Options, and other
matters to be determined by the Committee in connection with specific
Option grants and Option Agreements as specified under this Plan;
3. to interpret this Plan, to prescribe, amend and rescind rules and
regulations relating to this Plan, and to make all other determinations
necessary or advisable for the operation and administration of this Plan;
and
4. to delegate all or a portion of its authority under subsections 1, 2
and 3 of this Section III to one or more directors of the Company who are
executive officers of the Company, but only in connection with Options
granted to Eligible Participants who are not subject to the reporting and
liability provisions of Section 16 of the 1934 Act, and the rules and
regulations thereunder, and subject to such restrictions and limitations
(such as the aggregate number of shares of Option Stock called for by such
Options that may be granted) as the Committee may decide to impose on such
delegate directors.
C. LIMITATION ON AUTHORITY. Notwithstanding the foregoing, or any
other provision of this Plan, the Committee will have no authority:
1. to grant options to any of its members, whether or not approved by the
Board; and
2. to determine any matters, or exercise any discretion, in connection
with the Options, to the extent that the power to make such determinations
or to exercise such discretion would cause one or more members of the
Committee no longer to be "disinterested persons" within the meaning of
Section III.A. above.
D. DESIGNATION OF OPTIONS. Except as otherwise provided herein, the
Committee will designate any Option granted hereunder either as an ISO or as
an NSO. To the extent that the Fair Market Value (determined at the time the
Option is granted) of Stock with respect to which all ISOs are exercisable
for the first time by any individual during any calendar year (pursuant to
this Plan and all other plans of the Company and/or its Subsidiaries) exceeds
$100,000, such option will be treated as an NSO. Notwithstanding the general
eligibility provisions of Section II hereof, the Committee may grant ISOs
only to persons who are employees of the Company and/or its Subsidiaries.
6
E. OPTION AGREEMENTS. Options will be deemed granted hereunder only
upon the execution and delivery of an Option Agreement by the optionee and a
duly authorized executive officer of the Company. Options will not be deemed
granted hereunder merely upon the authorization of such grant by the
Committee.
IV. SHARES RESERVED FOR OPTIONS
A. OPTION POOL. The aggregate number of shares of Option Stock that
may be issued pursuant to the exercise of Options granted under this Plan
shall be Seven Hundred Fifty Thousand (750,000) (the "Option Pool"), provided
that such number will be increased by the number of shares of Option Stock
that the Company subsequently may reacquire through repurchase or otherwise.
Shares of Option Stock that would have been issuable pursuant to Options, but
that are no longer issuable because all or part of those Options have
terminated or expired, will be deemed not to have been issued for purposes of
computing the number of shares of Option Stock remaining in the Option Pool
and available for issuance.
The maximum number of shares authorized may also be increased from time
to time by approval of the Board and, if required pursuant to Rule 16b-3
under the 1934 Act, Section 422 of the Code, or the applicable rules of any
securities exchange or NASDAQ and/or NASD, the shareholders of the Company.
B. ADJUSTMENTS UPON CHANGES IN STOCK. In the event of any change in
the outstanding Stock of the Company as a result of a stock split, reverse
stock split, stock dividend, recapitalization, combination or
reclassification, reorganization, merger, consolidation, liquidation, rights
offering, extraordinary dividend or divesture (including a spin-off) or any
other change in the corporate structure or shares of the Company, appropriate
proportionate adjustments will be made (in order to prevent dilution or
enlargement of Eligible Participants) in: (1) the aggregate number of shares
of Option Stock in the Option Pool that may be issued pursuant to the
exercise of Options granted hereunder; (2) the Option Price and the number of
shares of Option Stock called for in each outstanding Option granted
hereunder; and (3) other rights and matters determined on a per share basis
under this Plan or any Option Agreement hereunder. Any such adjustments will
be made only by the Board (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), and when so made will be effective, conclusive and binding for
all purposes with respect to this Plan and all Options then outstanding. No
such adjustments will be required by reason of the issuance or sale by the
Company for cash or other consideration of additional shares of its Stock or
securities convertible into or exchangeable for shares of its Stock.
7
V. TERMS OF STOCK OPTION AGREEMENTS
Each Option granted pursuant to this Plan will be evidenced by an
agreement (an "Option Agreement") between the Company and the person to whom
such Option is granted, in form and substance satisfactory to the Committee
in its sole discretion, consistent with this Plan. Without limiting the
foregoing, each Option Agreement (unless otherwise stated therein) will be
deemed to include the following terms and conditions:
A. COVENANTS OF OPTIONEE. At the discretion of the Committee, the
person to whom an Option is granted hereunder, as a condition to the granting
of the Option, must execute and deliver to the Company a confidential
information agreement approved by the Committee. Nothing contained in this
Plan, any Option Agreement or in any other agreement executed in connection
with the granting of an Option under this Plan will confer upon any Optionee
any right with respect to the continuation of his or her status as an
employee of, officer of, or director of, the Company or its subsidiaries.
B. VESTING. An Option shall become exercisable at such times and in
such installments (which may be cumulative) as shall be determined by the
Committee in its sole discretion at the time the Option is granted. Upon the
completion of its exercise period, an Option, to the extent not then
exercised, shall expire.
C. EXERCISE OF THE OPTION.
1. MECHANICS AND NOTICE. An Option may be exercised to the extent
exercisable (a) by giving written notice of exercise to the Company,
specifying the number of full shares of Option Stock to be purchased and
accompanied by full payment of the Option Price thereof and the amount of
withholding taxes pursuant to subsection V.C.2 below; and (b) by giving
assurances satisfactory to the Company that the shares of Option Stock to
be purchased upon such exercise are being purchased for investment and not
with a view to resale in connection with any distribution of such shares
in violation of the 1933 Act; provided, however, that in the event the
Option Stock called for under the Option is registered under the 1933 Act,
or in the event resale of such Option Stock without such registration
would otherwise be permissible, this second condition will be inoperative
if, in the opinion of counsel for the Company, such condition is not
required under the 1933 Act, or any other applicable law, regulation or
rule of any governmental agency.
2. WITHHOLDING TAXES. As a condition to the issuance of the shares of
Option Stock upon full or partial exercise of an Option granted under this
Plan, the Optionee will pay to the Company in cash, or in such other form
as the Committee may
8
determine in its discretion, the amount of the Company's tax withholding
liability required in connection with such exercise. For purposes of this
subsection V.C.2, "tax withholding liability" will mean all federal and
state income taxes, social security tax, and any other taxes applicable to
the compensation income arising from the transaction required by
applicable law to be withheld by the Company.
3. PAYMENT OF OPTION PRICE. Each Option Agreement will specify the
Option Price with respect to the exercise of Option Stock thereunder, to
be fixed by the Committee in its discretion, but in no event will the
Option Price for an ISO granted hereunder be less than one hundred
(100%) percent of the Fair Market Value (or, in case the Optionee is a
10% Stockholder, one hundred ten (110%) percent of such Fair Market Value)
of the Option Stock at the time such ISO is granted, and in no event will
the Option Price for an NSO granted hereunder be less than eighty-five
(85%) percent of Fair Market Value. The Option Price will be payable to
the Company in United States dollars in cash or by check or, such other
form of consideration as may be approved by the Committee, in its
discretion.
In determining whether or upon what terms and conditions an Eligible
Participant will be permitted to pay the purchase price of an Option in a
form other than cash, the Committee may consider all relevant facts and
circumstances, including, without limitation, the tax and securities law
consequences to the Company. In the event the Eligible Participant is
permitted to pay the purchase price of an Option in whole or in part with
Previously Acquired Shares and/or the surrender of Options, the value of
such Previously Acquired Shares and/or the shares covered by such Options
shall be equal to their Fair Market Value on the date of exercise of the
Option.
D. TERMINATION OF THE OPTION. Except as otherwise provided herein,
each Option Agreement will specify the period of time, to be fixed by the
Committee in its discretion, during which the Option granted therein will be
exercisable, not to exceed ten years from the date of grant in the case of an
ISO (the "Option Period"); provided that the Option Period will not exceed
five years from the date of grant in the case of an ISO granted to a 10%
Stockholder. To the extent not previously exercised, each Option will
terminate upon the expiration of the Option Period specified in the Option
Agreement; provided, however, that each such Option will terminate, if
earlier: (i) ninety days after the date that the Optionee ceases to be an
Eligible Participant for any reason, other than by reason of death or
disability; (ii) twelve months after the date that the Optionee ceases to be
an Eligible Participant by reason of such person's death or disability; or
(iii) immediately as of the date that the Optionee ceases to be an Eligible
Participant by reason of a Just Cause Termination. In the event of a sale or
all
9
or substantially all of the assets of the Company, or a merger or
consolidation or other reorganization in which the Company is not the
surviving corporation, or in which the Company becomes a subsidiary of
another corporation (any of the foregoing events, a "Corporate Transaction"),
then notwithstanding anything else herein, the right to exercise all then
outstanding Options will vest immediately prior to such Corporate Transaction
and will terminate immediately after such Corporate Transaction; provided,
however, that if the Board, in its sole discretion, determines that such
immediate vesting of the right to exercise outstanding Options is not in the
best interests of the Company, then the successor corporation must agree to
assume the outstanding Options or substitute therefor comparable options of
such successor corporation or a parent or subsidiary of such successor
corporation.
Unless the committee shall otherwise determine in its sole discretion,
an Eligible Participant's employment or other service shall, for purposes of
the Plan, be deemed to have terminated on the date such Eligible Participant
ceases to perform services for the Company and all Subsidiaries, as
determined in good faith by the Committee.
E. OPTIONS NONTRANSFERABLE. No Option will be transferable by the
Optionee otherwise than by will or the laws of descent and distribution, or
in the case of an NSO, pursuant to a qualified domestic relations order (as
defined by the Code). During the lifetime of the Optionee, the Option will be
exercisable only by him or her, or the transferee of an NSO if it was
transferred pursuant to a qualified domestic relations order.
F. QUALIFICATION OF STOCK. The right to exercise an Option will be
further subject to the requirement that if at any time the Board determines,
in its discretion, that the listing, registration or qualification of the
shares of Option Stock called for thereunder upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory authority, is necessary or desirable as a condition
of or in connection with the granting of such Option or the purchase of
shares of Option Stock thereunder, the Option may not be exercised, in whole
or in part, unless and until such listing, registration, qualification,
consent or approval is effected or obtained free of any conditions not
acceptable to the Board, in its discretion.
G. ADDITIONAL RESTRICTIONS ON TRANSFER. By accepting Options and/or
Option Stock under this Plan, the Optionee will be deemed to represent,
warrant and agree as follows:
1. SECURITIES ACT OF 1933. The Optionee understands that the shares of
Option Stock have not been registered under the 1933 Act, and that such
shares are not freely tradeable and must be
10
held indefinitely unless such shares are either registered under the
1933 Act or an exemption from such registration is available. The
Optionee understands that the Company is under no obligation to register
the shares of Option Stock.
2. OTHER APPLICABLE LAWS. The Optionee further understands that Transfer
of the Option Stock requires full compliance with the provisions of all
applicable laws.
3. INVESTMENT INTENT. Unless a registration statement is in effect with
respect to the sale of Option Stock obtained through exercise of Options
granted hereunder: (a) Upon exercise of any Option, the Optionee will
purchase the Option Stock for his or her own account and not with a view
to distribution within the meaning of the 1933 Act, other than as may be
effected in compliance with the 1933 Act and the rules and regulations
promulgated thereunder; (b) no one else will have any beneficial interest
in the Option Stock; and (c) he or she has no present intention of
disposing of the Option Stock at any particular time.
H. COMPLIANCE WITH LAW. Notwithstanding any other provision of this
Plan, Options may be granted pursuant to this Plan, and Option Stock may be
issued pursuant to the exercise thereof by an Optionee, only after there has
been compliance with all applicable federal and state securities laws, and
all of the same will be subject to this overriding condition. The Company
will not be required to register or qualify Option Stock with the Securities
and Exchange Commission or any State agency, except that the Company will
register with, or as required by local law, file for and secure an exemption
from such registration requirements from, the applicable securities
administrator and other officials of each jurisdiction in which an Eligible
Participant would be granted an Option hereunder prior to such grant.
I. STOCK CERTIFICATES. Certificates representing the Option Stock
issued pursuant to the exercise of Options will bear all legends required by
law and necessary to effectuate this Plan's provisions. The Company may place
a "stop transfer" order against shares of the Option Stock until all
restrictions and conditions set forth in this Plan have been complied with.
Unless a registration statement under the 1933 Act and applicable state
securities laws is in effect with respect to the issuance or transfer of the
shares of Stock under the Plan, each certificate representing any such shares
shall be endorsed with a legend in substantially the following form, unless
counsel for the Company is of the opinion as to any such certificate that
such legend is unnecessary:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
APPLICABLE STATE SECURITIES LAWS. THESE
11
SECURITIES HAVE ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, OR ENCUMBERED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND SUCH STATE LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT AND SUCH STATE LAWS, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
J. NOTICES. Any notice to be given to the Company under the terms of
an Option Agreement will be addressed to the Company at its principal
executive office, Attention: Corporate Secretary, or at such other address as
the Company may designate in writing. Any notice to be given to an Optionee
will be addressed to the Optionee at the address provided to the Company by
the Optionee. Any such notice will be deemed to have been duly given if and
when enclosed in a properly sealed envelope, addressed as aforesaid,
registered and deposited, postage and registry fee prepaid, in a post office
or branch post office regularly maintained by the United States Government.
K. OTHER PROVISIONS. The Option Agreement may contain such other
terms, provisions and conditions, including such special forfeiture
conditions, rights of repurchase, rights of first refusal and other
restrictions on Transfer of Option Stock issued upon exercise of any Options
granted hereunder, not inconsistent with this Plan, as may be determined by
the Committee in its sole discretion.
L. RIGHTS AS A SHAREHOLDER. The Eligible Participant shall have no
rights as a shareholder with respect to any shares of Company Common Stock
covered by an Option until the Optionee shall have become the holder of
record of such shares.
M. EMPLOYMENT OF SERVICE. Nothing in this Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Participant at any time, nor confer
upon any Eligible Participant any right to continue in the employ or service
of the Company or any Subsidiary.
N. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify or rescind any previously approved compensation
plans or programs entered into by the Company. The Plan will be construed to
be in addition to any and all other plans or programs. Neither the adoption
of the plan nor the submission of the Plan to the shareholders of the Company
for approval will be construed as creating any limitations on the power or
authority of the Board to adopt such additional or other compensation
arrangements as the Board may deem necessary or desirable.
12
VI. PROCEEDS FROM SALE OF STOCK
Cash proceeds from the sale of shares of Option Stock issued from time
to time upon the exercise of Options granted pursuant to this Plan will be
added to the general funds of the Company and as such will be used from time
to time for general corporate purposes.
VII. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions and within the limitations of this
Plan, the Committee may modify, extend or renew outstanding Options granted
under this Plan, or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options
in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, alter or impair any rights
or obligations under any Option theretofore granted under this Plan.
VIII. AMENDMENT AND DISCONTINUANCE
The Board may amend, suspend or discontinue this Plan at any time or
from time to time; provided that no action of the Board will cause ISOs
granted under this Plan not to comply with Section 422 of the Code unless the
Board specifically declares such action to be made for that purpose and
provided further that no such action may, without the approval of the
stockholders of the Company, materially increase (other than by reason of an
adjustment pursuant to Section IV.B hereof) the maximum aggregate number of
shares of Option Stock in the Option Pool that may be issued under Options
granted pursuant to this Plan or materially increase the benefits accruing to
Plan participants or materially modify eligibility requirements for the
participants. Moreover, no such action may alter or impair any Option
previously granted under this Plan without the consent of the holder of such
Option.
IX. PLAN COMPLIANCE WITH RULE 16B-3
With respect to persons subject to Section 16 of the 1934 Act,
transactions under this plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of the Plan or action by the Plan administrators fails so to
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Plan administrators.
13
X. MISCELLANEOUS
A. CONSTRUCTION AND HEADINGS. The use of the masculine gender shall
also include within its meaning the feminine, and the singular may include
the plural and the plural may include the singular, unless the context
clearly indicates to the contrary. The headings of the Sections and subparts
of the Plan are for convenience of reading only and are not meant to be of
substantive significance and shall not add or detract from the meaning of
such Section or subpart.
B. GOVERNING LAW. The place of administration of the Plan shall be
conclusively deemed to be within the State of Minnesota, and the rights and
obligations of any and all persons having or claiming to have had an interest
under the Plan or under any agreements evidencing Options shall be governed
by and construed exclusively and solely in accordance with the laws of the
State of Minnesota without regard to the conflict of laws provisions of any
jurisdiction. All parties agree to submit to the jurisdiction of the state
and federal courts of Minnesota with respect to matters relating to the Plan
and agree not to raise or assert the defense that such forum is not
convenient for such party.
C. SUCCESSORS AND ASSIGNS. This Plan shall be binding upon and inure
to the benefit of the successors and permitted assigns of the Company,
including without limitation, whether by way of merger, consolidation,
operation of law, assignment, purchase or other acquisition of substantially
all of the assets or business of the Company, and any and all such successors
and assigns shall absolutely and unconditionally assume all of the Company's
obligations under the Plan.
D. SURVIVAL OF PROVISIONS. The rights, remedies, agreements,
obligations and covenants contained in or made pursuant to the plan, any
agreement evidencing an Option and any other notices or agreements in
connection therewith, including, without limitation, any notice of exercise
of an Option, shall survive the execution and delivery of such notices and
agreements and the delivery and receipt of shares of Common stock and shall
remain in full force and effect.
XI. COPIES OF PLAN
A copy of this Plan will be delivered to each Optionee at or before the
time he or she executes an Option Agreement.
_______________________
14
[SPECIMEN FORM]
DYNECO INTERNATIONAL, INC.
1993 CORPORATE STOCK OPTION PLAN
Stock Option Agreement
Form DYNCASH
THIS AGREEMENT is made as of ______________, 199___, between DynEco
International, Inc., a Minnesota corporation (the "Company"), and
_________________________ (the "Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. OPTION GRANT. The Company hereby grants to the Optionee an option
(the "Option") to purchase the number of shares of the Company's Common Stock
(the "Shares"), for an exercise price per share (the "Option Price") and
based upon a Grant Date, all as set forth below:
Shares under option: __________
Option Price per Share: $_________
Grant Date: __________, 199___
The Option will be subject to all of the terms and conditions set forth
herein and in the Company's 1993 Corporate Stock Option Plan (the "Option
Plan"), a copy of which is attached hereto and incorporated by reference. The
Option granted hereunder will be a nonstatutory or nonqualified option for
tax purposes.
2. STOCKHOLDER RIGHTS. No rights or privileges of a stockholder in the
Company are conferred by reason of the granting of the Option. Optionee will
not become a stockholder in the Company with respect to the Shares unless and
until the Option has been properly exercised and the Option Price fully paid
as to the portion of the Option exercised.
3. TERMINATION. Subject to earlier termination as provided in the
Option Plan, this Option will expire, unless previously exercised in full, on
December __, 199__.
4. TERMS OF THE OPTION PLAN. The Optionee understands that the Option
Plan includes important terms and conditions that apply to this Option. Those
terms include (without limitation): important conditions to the right of the
Optionee to exercise the Option; important restrictions on the ability of the
Optionee to transfer the Option or to transfer Shares received upon exercise
of the Option; and early termination of the Option following the occurrence
of certain events, including the Optionee no longer
15
being an officer, director or employee to or of the Company or its
subsidiaries. The Optionee acknowledges that he or she has read the Option
Plan, agrees to be bound by its terms, and makes each of the representations
required to be made by the Optionee under it.
5. MISCELLANEOUS. This Agreement (together with the Option Plan) sets
forth the complete agreement of the parties concerning the subject matter
hereof, superseding all prior agreements, negotiations and understandings.
This Agreement will be governed by the substantive law of the State of
Minnesota, and may be executed in counterparts.
The parties hereby have entered into this Agreement as of the date set
forth above.
DYNECO INTERNATIONAL, INC.
By_____________________________________
An Authorized Officer
OPTIONEE
_______________________________________
Address:
_______________________________________
_______________________________________
_______________________________________
Attachments: (1) Spousal Consent
(2) 1993 Corporate Stock Option Plan
16
SPOUSAL CONSENT
The undersigned is the spouse of the Optionee referred to in the
attached DynEco International, Inc. 1993 Corporate Stock Option Plan
Agreement (the "Agreement"). The undersigned acknowledges that he or she:
1. has received, reviewed and understands the terms of the Agreement
(including its attachments);
2. consents to the Agreement, and agrees to be bound by its terms to the
extent that he or she now has or may obtain any interest in the Option or
Shares covered by the Agreement; and
3. understands that the Company is relying upon this consent in entering
into the Agreement and in not taking further steps to protect its
interests.
Date: ____________, 199___
_______________________________________
Print Name:
_______________________________________
[SPECIMEN FORM]
DYNECO INTERNATIONAL, INC.
1993 CORPORATE STOCK OPTION PLAN
Stock Option Agreement
Form DYNNOCASH
THIS AGREEMENT is made as of __________, 199___, between DynEco
International, Inc., a Minnesota corporation (the "Company"), and
____________________ (the "Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. OPTION GRANT. The Company hereby grants to the Optionee an option
(the "Option") to purchase the number of shares of the Company's Common Stock
(the "Shares"), for an exercise price per share (the "Option Price") and
based upon a Grant Date, all as set forth below:
Shares under option: ________________
Option Price Per Share: $ __________
Grant Date: __________, 199___
The Option will be subject to all of the terms and conditions set forth
herein and in the Company's 1993 Corporate Stock Option Plan (the "Option
Plan"), a copy of which is attached hereto and incorporated by reference. The
Option granted hereunder will be a nonstatutory or nonqualified option for
tax purposes.
2. EXERCISE PRICE. The Optionee may pay the Option Price for Shares,
in his or her sole discretion, by either:
(a) by paying the Option Price in cash; or
(b) by paying with Previously Acquired Shares; or
(c) by paying the Option Price through surrendering that number
of Options covering the number of underlying shares of
Common Stock the fair market value of which shares equal the
Option Price.
3. STOCKHOLDER RIGHTS. No rights or privileges of a stockholder in the
Company are conferred by reason of the granting of the Option. Optionee will
not become a stockholder in the Company with respect to the Shares unless and
until the Option has been properly exercised and the Option Price fully paid
as to the portion of the Option exercised.
4. TERMINATION. Subject to earlier termination as provided in the
Option Plan, this Option will expire, unless previously exercised in full, on
December ___, 199___.
5. TERMS OF THE OPTION PLAN. The Optionee understands that the Option
Plan includes important terms and conditions that apply to this Option. Those
terms include (without limitation): important conditions to the right of the
Optionee to exercise the Option; important restrictions on the ability of the
Optionee to transfer the Option or to transfer Shares received upon exercise
of the Option; and early termination of the Option following the occurrence
of certain events, including the Optionee no longer being an officer,
director or employee to or of the Company or its subsidiaries. THE OPTIONEE
ACKNOWLEDGES THAT HE OR SHE HAS READ THE OPTION PLAN, AGREES TO BE BOUND BY
ITS TERMS, AND MAKES EACH OF THE REPRESENTATIONS REQUIRED TO BE MADE BY THE
OPTIONEE UNDER IT.
6. MISCELLANEOUS. This Agreement (together with the Option Plan) sets
forth the complete agreement of the parties concerning the subject matter
hereof, superseding all prior agreements, negotiations and understandings.
This Agreement will be governed by the substantive law of the State of
Minnesota, and may be executed in counterparts.
The parties hereby have entered into this Agreement as of the date set
forth above.
DYNECO INTERNATIONAL, INC.
By _______________________________________
An Authorized Officer
OPTIONEE
_______________________________________
Address:
_______________________________________
_______________________________________
_______________________________________
Attachments: (l) Spousal Consent
(2) 1993 Corporate Stock Option Plan
2
SPOUSAL CONSENT
The undersigned is the spouse of the Optionee referred to in the
attached DynEco International, Inc. 1993 Corporate Stock Option Plan
Agreement (the "Agreement"). The undersigned acknowledges that he or she:
1. has received, reviewed and understands the terms of the Agreement
(including its attachments);
2. consents to the Agreement, and agrees to be bound by its terms to the
extent that he or she now has or may obtain any interest in the Option or
Shares covered by the Agreement; and
3. understands that the Company is relying upon this consent in entering
into the Agreement and in not taking further steps to protect its
interests.
Date: __________, 199__
_______________________________________
Print Name:
_______________________________________
[SAMPLE FORM OF NOTICE TO OPTIONEE]
MEMORANDUM
Date:__________
To: _________________________
From: A.J. Ryden
Chairman
DynEco International, Inc.
Subject: 1993 CORPORATE STOCK OPTION PLAN
I am pleased to inform you that the Board of Directors recently awarded
you a non-statutory stock option to purchase __________ shares of the
Company's common stock at an exercise price of $_____ per share. This option
was granted on _____________, 199___ under the 1993 Corporate Stock Option
Plan and vests as of the grant date.
Please enter your address on the enclosed Stock Option Agreement, sign
the original copy of the Agreement and return it to me as soon as
practicable. Attached to the Agreement is a Spousal Consent which your spouse
should sign and date. A duplicate copy of the Agreement is included for your
files. Attached to your copy of the agreement as Exhibit A is a copy of the
1993 Corporate Stock Option Plan.
If you desire to exercise a vested portion of your option, I will assist
you in arranging for the execution of the necessary papers. If you have any
questions regarding your option, please contact me. CONGRATULATIONS!
Enclosure
NOTICE OF EXERCISE OF OPTION
To: DynEco International, Inc.
Office of the Corporate Secretary
From: _________________________________
( Optionee )
Address:
_________________________________
_________________________________
_________________________________
Social Security Number: ______________________
1. EXERCISE OF OPTION. I am the holder of an option or options granted
under the 1993 Corporate Stock Option Plan (the "Plan") and that certain
Stock Option Agreement dated _____________, 199__. I hereby irrevocably elect
to exercise the purchase rights represented by such option, and to purchase
thereunder ________ (____) shares of Common Stock of DynEco International,
Inc. (the "Company") at $____ per share, for an aggregate exercise price of
$______, to be paid by me in one or more of the following forms (indicate the
amount for each form that applies):
[ ] $__________ by delivering herewith cash or a check made payable
to DynEco International, Inc.; or
[ ] $__________ by the delivering herewith of certificate(s) numbered
__________ representing shares of Common Stock of the Company
with a fair market value on the date hereof equal to $____ per
share (and, if such certificate represents shares in excess of
the number required to achieve the amount indicated in the left
margin, requesting that the Company or its transfer agent deliver
to me a certificate or certificates for the balance of the shares
represented thereby), together with a stock power executed in
blank; or
[ ] $__________ by delivering to _________________________________
("Broker") an irrevocable direction (two copies of which I have
completed, executed and attached hereto), to sell that number of
shares of the stock to be acquired hereby and to deliver the proceeds
thereof to the Company in the amount indicated in the left margin; or
[ ] $__________ by the delivering herewith of the Stock Option Agreement
dated , 199___,
1
representing Options to purchase shares of Common Stock of the
Company with the shares having a fair market value on the date hereof
equal to $_________ per share (and, if such Stock Option Agreement
represents shares in excess of the number required to achieve the
amount indicated in the left margin, requesting that the Company or
its transfer agent deliver to me a Stock Option Agreement for the
balance of the Options represented thereby).
I request that certificate(s) for such shares be registered and issued in the
name set forth above. The certificate(s) issued upon exercise of the
aforesaid option should be mailed to my address indicated above via first
class mail. I acknowledge that the Option Exercise Date is the date upon
which this notice and the required payment are received in the Office of the
Secretary of the Company.
2. OTHER ACKNOWLEDGEMENTS.
(a) I acknowledge receipt of copies of the Company's most recent 10K
and/or Annual Report to Shareholders, and 10Q.
(b) I am aware that the Securities Act of 1933, as amended, and the
regulations and requirements of the Securities and Exchange Commission
thereunder, may impose limitations on the resale of Company stock acquired
pursuant to this option exercise. I hereby certify that any resale of such
stock will be made in compliance with the Act and those regulations and
requirements.
(c) I hereby appoint ______________________ as my agent to accept
delivery of the shares of Company stock being purchased on my behalf
pursuant to this option exercise, and request _______________________
to forward the certificates representing those shares to me at the address
shown above.
Dated: __________, 199___
______________________________________
Optionee
2