WORLD WIRELESS COMMUNICATIONS, INC.
1997 STOCK OPTION PLAN
1. Purpose. The Plan is intended as an additional incentive to key
employees, consultants, advisors and members of the Board of Directors
(together, the "Optionees") to enter into or remain in the service or employ of
World Wireless Communications, Inc., a Nevada corporation (the "Company"), or
any Affiliate (as defined below) of the Company, and to devote themselves to the
Company's success by providing them with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of rights (the
"Options") to acquire the Company's Common Stock, par value $.001 per share (the
"Common Stock"). Each Option granted under the Plan to a person who is employed
by the Company or an Affiliate is intended to be an incentive stock option
("ISO") within the meaning of section 422(b) of the Internal Revenue Code of
1986, as amended (the "Code"), for federal income tax purposes, except to the
extent (i) any such ISO grant would exceed the limitation of subsection 6(a)
below, or (ii) any Option is specifically designated at the time of grant (the
"Grant Date") as not being an ISO. No Option granted to a person who is not an
employee of the Company or any Affiliate on the Grant Date, or is not identified
as an ISO in the Option Documents (as hereinafter defined), shall be an ISO.
For purposes of the Plan, the term "Affiliate" shall mean a corporation
which is a parent corporation or a subsidiary corporation with respect to the
Company within the meaning of section 424(e) or (f) of the Code.
2. Administration. The Plan shall be administered by the Board of
Directors of the Company, without participation by any director on any matter
pertaining to him, provided that any director may join in a written consent to
action signed by all directors notwithstanding that such action pertains to such
director, in whole or in part. The Board of Directors may appoint a Stock Option
Committee composed of three or more of its members to operate and administer the
Plan in its stead. The Stock Option Committee or the Board of Directors in its
administrative capacity with respect to the Plan is referred to herein as the
"Committee."
The Committee shall hold meetings at such times and places as it may
determine. Acts approved at a meeting by a majority of the members of the
Committee or acts approved in writing by the unanimous consent of the members of
the Committee shall be the valid acts of the Committee.
The Committee shall from time to time at its discretion grant Options
pursuant to the terms of the Plan. The Committee shall have plenary authority to
determine the Optionees to whom and the times at which Options shall be granted,
the number of Option
Shares (as defined in Section 4 below) to be covered by such Options and the
price and other terms and conditions thereof, including a specification with
respect to whether an Option is intended to be an ISO, subject, however, to the
express provisions of the Plan. In making such determinations the Committee may
take into account the nature of the Optionee's services and responsibilities,
the Optionee's present and potential contribution to the Company's success and
such other factors as it may deem relevant. The interpretation and construction
by the Committee of any provision of the Plan or of any Option granted under it
shall be final, binding and conclusive.
No member of the Board of Directors or the Committee shall be
personally liable for any action or determination made in good faith with
respect to the Plan or any Option granted under it. No member of the Committee
shall be liable for any act or omission of any other member of the Committee or
for any act or omission on his own part, including but not limited to the
exercise of any power and discretion given to him under the Plan, except those
resulting from (i) any breach of such member's duty of loyalty to the Company or
its stockholders, (ii) acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of law, (iii) acts or omissions
that would result in liability under Section 78.300 of the General Corporation
Law of Nevada, as amended, and (iv) any transaction from which the member
derived an improper personal benefit.
In addition to such other rights of indemnification as he may have as a
member of the Board of Directors or the Committee, and with respect to the
administration of the Plan and the granting of Options under it, each member of
the Board of Directors and of the Committee shall be entitled without further
action on his part to indemnity from the Company for all expenses (including the
amount of judgment and the amount of approved settlements made with a view to
the curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by him in connection with or arising out of any
action, suit or proceeding with respect to the administration of the Plan or the
granting of Options under it in which he may be involved by reason of his being
or having been a member of the Board of Directors or the Committee, whether or
not he continues to be such member of the Committee at the time of the incurring
of such expenses; provided, however, that such indemnity shall not include any
expenses incurred by such member of the Board of Directors or Committee: (i) in
respect of matters as to which he shall be finally adjudged in such action, suit
or proceeding to have been guilty of gross negligence or willful misconduct in
the performance of his duties as a member of the Board of Directors or the
Committee; or (ii) in respect of any settlement amount in excess of an amount
approved by the Company on the advice of its legal counsel; and provided further
that no right of indemnification hereunder shall be available to or accessible
by any such member of the Committee unless within a reasonable time
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after institution of any such action, suit or proceeding (which shall be no
later than the earlier of ten (10) days prior to the date that any responsive
pleading or other action in response to the institution of any such proceeding
is due, or ten (10) days after he has actual notice of the institution of such
proceeding) he shall have offered the Company in writing the opportunity to
handle and defend such action, suit or proceeding at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Board of Directors or the
Committee and shall be in addition to all other rights to which such member of
the Board of Directors or the Committee would be entitled to as a matter of law,
contract or otherwise.
3. Eligibility. All key employees of the Company or its Affiliates (who
may also be directors of the Company or its Affiliates) shall be eligible to
receive Options hereunder, and such Options may be either ISOs or Options which
are not ISOs (hereinafter, "Nonqualified Options"). Consultants, advisors and
directors of the Company shall be eligible to receive Nonqualified Options
hereunder. The Committee, in its sole discretion, shall determine whether an
individual qualifies as an employee or an Optionee. An Optionee may receive more
than one Option.
4. Option Shares. The aggregate maximum number of shares of the Common
Stock for which Options may be granted under the Plan is One Million Five
Hundred Thousand (1,500,000) shares (the "Option Shares"), which number is
subject to adjustment as provided in Section 8(b). Option Shares shall be issued
from authorized and unissued Common Stock or Common Stock held in or hereafter
acquired for the treasury of the Company. If any outstanding Option granted
under the Plan expires, lapses or is terminated for any reason, the Option
Shares allocable to the unexercised portion of such Option may again be the
subject of an Option granted pursuant to the Plan.
5. Term of Plan. The Plan is adopted by the Board of Directors
effective on October 1, 1997, but shall terminate (a) on the first anniversary
of the Effective Date unless the Plan is approved by the stockholders of the
Company as set forth in section 422(b)(1) of the Code, and (b) if the Plan is so
approved, on the tenth anniversary of the Effective Date.
6. Terms and Conditions of Options. Options granted pursuant to the
Plan shall be evidenced by written documents (the "Option Documents") in such
form as the Committee shall from time to time approve, which Option Documents
shall comply with and be subject to the following terms and conditions and with
any other terms and conditions (including vesting schedules for the
exercisability of Options) which the Committee shall from time to time provide
which are not inconsistent with the terms of the Plan.
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a. Number of Option Shares. Each Option Document shall state
the number of Option Shares to which it pertains. In no event shall the
aggregate fair market value, as of the Grant Date, of Option Shares with respect
to which an ISO is exercisable for the first time by the Optionee during any
calendar year (under all incentive stock option plans of the Company or its
Affiliates) exceed $100,000.
b. Option Price. Each Option Document shall state the price at
which Option Shares may be purchased (the "Option Price"), which, for any ISO,
shall be at least 100% of the fair market value of the Common Stock on the date
the option is granted as determined by the Committee; provided, however, that if
an ISO is granted to an Optionee who then owns, directly or by attribution under
section 424(b) of the Code, shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or an Affiliate,
then the ISO Option Price shall be at least 110% of the fair market value of the
Option Shares on the Grant Date. The Option Price of Nonqualified Options may be
below 100% of the fair market value of the Common Stock on the Grant Date. The
fair market value of the Common Stock shall be as determined by the Committee,
provided that the fair market value of the Common Stock on the Grant Date in
respect of the grant of an ISO shall be determined in accordance with Section
422(b)(4) of the Code and Regulations hereunder.
c. Medium of Payment. An Optionee shall pay for Options Shares
(i) in cash, (ii) by certified check payable to the order of the Company, (iii)
in whole or in part in shares of Common Stock, including shares of Common Stock
acquired upon the contemporaneous exercise of Options, or (iv) by such other
mode of payment as the Committee may approve, including payment through a broker
in accordance with procedures permitted by Regulation T of the Federal Reserve
Board. If payment is made in whole or in part in shares of Common Stock acquired
upon exercise of an Option, the value of the Common Stock for such purpose shall
be the fair market value of the shares so applied as of the date of exercise of
the Option. The Committee may set forth in the Option Documents at the time of
Grant, and thereby impose, such limitations or prohibitions on the use of shares
of Common Stock to exercise an Option as it deems appropriate.
d. Termination of Options. No Option shall be exercisable
after the first to occur of the following:
(i) Expiration of the Option term specified in
the Option Document, which shall not exceed ten years from the date of grant (or
five years from the date of grant in the case of an ISO if, on such date the
Optionee owns, directly or by attribution under section 424(b) of the Code,
shares possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or an Affiliate);
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(ii) Expiration of three months (or such shorter
period as the Committee may select) from the date the Optionee's employment with
the Company or its Affiliates terminates for any reason other than (a)
disability (within the meaning of section 22(e)(3) of the Code) or death, or (b)
circumstances described by subsection (d)(vi), below;
(iii) Expiration of one year from the date the
Optionee's employment with the Company or its Affiliates terminates for any
reason of the Optionee's disability (within the meaning of section 22(e)(3) of
the Code) or death;
(iv) The date, if any, fixed by the Committee as an
accelerated expiration date in the event of a "Change in Control" described in
sub-Section 6(e)(i) and (ii) below, provided an Optionee who holds an Option
affected by such acceleration of expiration date is given written notice at
least sixty (60) days before the date so fixed;
(v) The date set by the Committee to be an
accelerated expiration date after a finding by the Committee that a change in
the financial accounting treatment for Options from that in effect on the date
the Plan was adopted adversely affects or, in the determination of the
Committee, may adversely affect in the foreseeable future, the Company, provided
that (x) an Optionee who holds an Option affected by such acceleration of
expiration date is given written notice at least sixty (60) days before the date
so fixed, and (y) the Committee may take whatever other action, including
acceleration of any exercise provisions, it deems necessary or appropriate
should it make the determination referred to hereinabove; or
(vi) A finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has been discharged from employment or service with
the Company or an Affiliate for Cause. For purposes of this Section, "Cause"
shall mean: (A) a breach by Optionee of his employment or service agreement with
the Company or an Affiliate, (B) a breach of Optionee's duty of loyalty to the
Company or an Affiliate, including without limitation any act of dishonesty,
embezzlement or fraud with respect to the Company or an Affiliate, (C) the
commission by Optionee of a felony, a crime involving moral turpitude or other
act causing material harm to the Company's or an Affiliate's standing and
reputation, (D) Optionee's continued failure to perform his duties to the
Company or an Affiliate or (E) unauthorized disclosure of trade secrets or other
confidential information belonging to the Company or an Affiliate. In the event
of a finding that the Optionee has been discharged for Cause, in addition to
immediate termination of the Option, the Optionee shall automatically forfeit
all Option Shares for which the Company has not yet delivered the share
certificates upon refund of the Option Price; provided, however, that, with
respect
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to any Non-Qualified Option, the Committee may provide other and additional
terms and conditions in the Option Document which are expressly or by
implication at variance with the above terms and conditions, in which case the
terms and conditions set forth in the Option Documents shall be controlling.
e. Change of Control. In the event of a Change in Control (as
defined below), the Committee may take whatever action with respect to the
Options outstanding it deems necessary or desirable, including, without
limitation, accelerating the vesting, expiration or termination dates in the
respective Option Documents to a date no earlier than thirty (30) days after
notice of such acceleration is given to the Optionee; provided, however, that
(x) the Committee shall not accelerate the expiration or termination date of any
outstanding option except in the case of a Change in Control as described in
sub-Sections (i) or (ii) below, and (y) the Committee may provide in the Option
Documents other and additional terms and conditions of such Option which are
applicable if a Change of Control occurs, including terms and conditions which
limit the Committee's discretion under this section. A Change of Control shall
be deemed to have occurred upon the earliest to occur of the following events:
(i) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated;
(ii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) approve a
definitive agreement to sell or otherwise dispose of substantially all of the
assets of the Company;
(iii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) and the
stockholders of the other constituent corporation (or its board of directors if
stockholder action is not required) have approved a definitive agreement to
merge or consolidate the Company with or into such other corporation, other
than, in either case, a merger or consolidation of the Company in which holders
of shares of the Common Stock immediately prior to the merger or consolidation
will hold at least a majority of the ownership of common stock of the surviving
corporation (and, if one class of common stock is not the only class of voting
securities entitled to vote on the election of directors of the surviving
corporation, a majority of the voting power of the surviving corporation's
voting securities) immediately after the merger or consolidation, which common
stock (and, if applicable, voting securities) is to be held in the same
proportion as such holders' ownership of Common Stock immediately before the
merger or consolidation;
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(iv) the date any entity, person or group, (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange
Act of 1934, as amended), other than (A) the Company or any of its subsidiaries
or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (B) any person who, on the date the Plan
is effective, shall have been the beneficial owner of at least twenty percent
(20%) of the outstanding Common Stock, shall have become the beneficial owner
of, or shall have obtained voting control over, more than fifty percent (50%) of
the outstanding shares of the Common Stock; or
(v) the first day after the first anniversary of the
adoption of this Plan by the Board of Directors a majority of the directors
comprising the Board of Directors shall have been members of the Board of
Directors for less than twenty-four (24) months, unless each director who was
not a director at the beginning of such twenty-four (24) month period was either
appointed or nominated for election with the approval of at least two-thirds of
the directors then still in office who were directors at the beginning of such
period.
f. Transfers. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution and, in
the case of a Non-Qualified Option, as expressly set forth in the Option
Documents. During the lifetime of the person to whom an Option is granted, such
Option may be exercised only by the Optionee.
g. Other Provisions. The Option Documents shall contain such
other provisions including, without limitation, additional restrictions upon the
exercise of the Option or additional limitations upon the term of the Option, as
the Committee shall deem advisable.
h. Amendment. Subject to the provisions of the Plan, the
Committee shall have the right to amend Option Documents issued to such
Optionee, subject to the Optionee's consent if such amendment is not favorable
to the Optionee except that the consent of the Optionee shall not be required
for any amendment made under subsection 6(e) above.
7. Exercise. No Option shall be deemed to have been exercised prior to
the receipt by the Company of written notice of such exercise and of payment in
full of the Option Price for the Option Shares to be purchased. Each such notice
shall specify the number of Option Shares to be purchased and shall satisfy the
securities law requirements set forth in this Section 7.
Each exercise notice shall (unless the Option Shares are covered by a
then current registration statement or a Notification under Regulation A under
the Securities Act of 1933 (the "Act")),
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contain the Optionee's acknowledgment in form and substance satisfactory to the
Company that (i) such Option Shares are being purchased for investment and not
for distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act), (ii) the Optionee has been advised and
understands that (A) the Option Shares have not been registered under the Act
and are "restricted securities" within the meaning of Rule 144 under the Act and
are subject to restrictions on transfer and (B) the Company is under no
obligation to register the Option Shares under the Act or to take any action
which would make available to the Optionee any exemption from such registration,
(iii) such Option Shares may not be transferred without compliance with all
applicable federal and state securities laws, and (iv) an appropriate legend
referring to the foregoing restrictions on transfer and any other restrictions
imposed under the Option Documents may be endorsed on the certificates.
Notwithstanding the above, should the Company be advised by counsel that the
issuance of Option Shares upon the exercise of an Option should be delayed
pending (A) registration under federal or state securities laws or (B) the
receipt of an opinion that an appropriate exemption therefrom is available, (C)
the listing or inclusion of the shares on any securities exchange or in an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Option Shares, the Company may defer the exercise of any Option
granted hereunder until either such event in A, B, C or D has occurred.
8. Adjustments on Changes in Common Stock.
a. In case the Company shall (i) declare a dividend or make a
distribution on outstanding shares of its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of its Common Stock
into a greater number of shares, or (iii) combine or reclassify the outstanding
shares of its Common Stock into a lesser number of shares, the number of Option
Shares subject to outstanding Options shall be increased or decreased in
proportion to the increase or decrease, as the case may be, in the total number
of outstanding shares of Common Stock of the Company as a result of such
subdivision, combination or reclassification. Such adjustment shall be effective
as of the record date of such subdivision, combination or reclassification.
Adjustments hereunder shall be made successively whenever any event specified
above shall occur.
b. The aggregate number of shares of Common Stock as to which
Options may be granted hereunder shall be adjusted in proportion to any
adjustment made in the number of Option Shares covered by outstanding Options
pursuant to Section 8(a) above.
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c. In case of any reclassification, recapitalization or other
change in the capital structure of the Company affecting its Common Stock, other
than a change in par value, or from par value to no par value, or as a result of
a subdivision or combination, but including any change in the Common Stock into
two or more classes or series of shares), the Optionee shall have the right
thereafter to receive upon exercise of this Option solely the kind and amount of
shares of stock and other securities, property, cash or any combination thereof
receivable in connection with such reclassification, recapitalization or other
change by a holder of a number of shares of Common Stock equal to the number of
Option Shares for which this Option might have been exercised immediately prior
to such event.
d. In case of a Change of Control of the Company involving a
consolidation with or merger of the Company into another corporation (other than
a merger of consolidation in which the Company is the continuing or surviving
corporation), the Optionee shall have the right thereafter to receive upon
exercise of the Option solely the kind and amount of shares of stock and other
securities, property, cash or any combination thereof receivable upon such
consolidation, merger, sale, lease or conveyance by a holder of a number of
shares of Common Stock equal to the number of Option Shares for which this
Option might have been exercised immediately prior to such consolidation or
merger.
9. Amendment of the Plan. The Board of Directors may amend the Plan
from time to time in such manner as it may deem advisable, subject to compliance
with applicable corporate laws, securities laws and exchange requirements.
Notwithstanding the foregoing, any amendment which would change the class of
individuals eligible to receive an ISO, extend the expiration date of the Plan,
decrease the Option Price of an ISO granted under the Plan or increase the
maximum number of shares as to which Options may be granted will only be
effective if such action is approved by a majority of the outstanding voting
stock of the Company within twelve months before or after such action.
10. Continued Employment. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ of the Company or an Affiliate, as a member of the Board
of Directors, as an independent contractor or in any other capacity.
11. Withholding of Taxes. Whenever the Company proposes or is required
to issue or transfer Option Shares, the Company shall have the right to (a)
require the recipient or transferee to remit to the Company an amount sufficient
to satisfy any federal, state and/or local withholding tax requirements prior to
the delivery or transfer of any certificate or certificates for such Option
Shares
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or (b) take whatever action it deems necessary to protect its interests.
12. Assumption by Successors. Any agreement providing for a Change of
Control involving a consolidation with or merger into another corporation (other
than a merger or consolidation in which the Company is the continuing or
surviving corporation) shall make express, effective provisions for the
assumption of the Company's obligations under this Plan by the surviving or
continuing corporation, and/or by the parent of the surviving or continuing
corporation in the case of a "triangular" merger in which holders of the
Company's Common Stock receive securities of such parent corporation in exchange
for or in conversion of the Company's Common Stock.
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