EXHIBIT B
2001 Employee and Consultant
Incentive and Stock Option Plan
for
Symphony Telecom International, Inc.
1. Purpose. The purpose of this Plan is to advance the interests
of Symphony Telecom International, Inc., a Utah corporation (the "Company"), and
its subsidiaries by providing an additional incentive to attract and retain
qualified and competent providers of management and other key services upon
whose efforts and judgment the success of the Company and its subsidiaries is
largely dependent, through the encouragement of stock purchase in the Company by
such persons.
2. Definitions. As used herein, the following terms shall have
the meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed by
the Board pursuant to Section 12 hereof or, if not appointed,
the Board.
(c) "Common Stock" shall mean the common stock, par value $.001
per share, of the Company.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean a Director who, during one
year prior to the time he serves on the Committee and during
such service, has not received Shares, options for Shares or
any rights with respect to Shares under this Plan or any other
employee and/or Director benefit plan of the Company or any of
its affiliates except pursuant to an election to receive
annual director's fees in securities of the Company.
(f) "Employee" and "employment" shall, except where the context
otherwise requires, mean or refer to a Director and his
Directorship as well as to a regular employee and his
employment.
(g) "Fair Market Value" of a Share on any date of reference shall
be the Closing Price of the Common Stock on such date, unless
the Committee in its sole discretion shall determine otherwise
in a fair and uniform manner consistent with the provisions of
the Internal Revenue Code. For this purpose, the Closing Price
of the Common Stock on any business day shall be:
(i) if the Common Stock is listed or admitted for trading
on any United States national securities exchange, or
if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last
reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of
general circulation;
(ii) if Common Stock is quoted on the National Association
of Securities Dealers Automated Quotations System
("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in
common use, the mean between the closing bid and
asked quotations for such day of Common Stock on such
system; or
(iii) if neither clause (i) nor (ii) is applicable, the
mean between the highest closing bid and asked
quotations for Common Stock as reported by either the
NASD OTC Electronic Bulletin Board or the National
Quotation Bureau, Incorporated, if at least two
securities dealers have inserted both bid and asked
quotations for Common Stock on at least 5 of the 10
preceding business days.
(h) "Grantee" shall mean a person or company to whom a stock
option is granted under this Plan or any person who succeeds
to the rights of such person under this Plan by reason of the
death of such person.
(i) "Incentive Stock Option" means an Option to purchase shares of
Common Stock which is intended to qualify as an "incentive
stock option" as defined in Section 422A of the Internal
Revenue Code.
(j) "Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(k) "Key Employee" means any person, including officers and
Directors, in the regular full-time employment of the Company
or any subsidiary who, in the opinion of the Committee, is or
is expected to be primarily responsible for the management,
growth or protection of some part or all of the business of
the Company or a Subsidiary.
(l) "Non-Qualified Stock Option" means an option to purchase
shares of Common Stock which is not intended to qualify as an
Incentive Stock Option ("ISO") as defined in Section 422A of
the Internal Revenue Code.
(m) "Option" (when capitalized) shall mean any option granted
under this Plan.
(n) "Plan" shall mean this 2001 Employee and Consultant Incentive
and Stock Option Plan for Symphony Telecom International, Inc.
(o) "Shares" shall mean shares of Common Stock issued or to be
issued to a Grantee upon exercise of any Option.
(p) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with
the Company if, at the time of the granting of the Option,
each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
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3. Shares and Options. The Company may grant to Grantees from
time to time Options to purchase an aggregate of up to 10,000,000 Shares from
Shares held in the Company's treasury or from authorized and unissued Shares. Of
this amount, all or any may be optioned as Incentive Stock Options, as
Non-Qualified Stock Options, or any combination thereof. If any Option granted
under this Plan shall terminate, expire, or be cancelled or surrendered as to
any Shares, new Options may thereafter be granted covering such Shares.
4. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an Option agreement that may
contain any terms deemed necessary or desirable by the
Committee, including, but not limited to, a requirement that
the Grantee agree that, for a specified period after
termination of his employment, he will not enter into any
employment with, or participate directly or indirectly in, any
entity which is directly or indirectly competitive with the
Company, provided such terms are not inconsistent with this
Plan or any applicable law. Grantees shall be selected by the
Committee in its discretion and shall be either Key Employees
and Directors or others who are not employees provided,
however, that Directors and others who are not employees shall
not be eligible to receive Incentive Stock Options. Any person
who files with the Committee, in a form satisfactory to the
Committee, a written waiver of eligibility to receive any
Option under this Plan shall not be eligible to receive any
Option under this Plan for the duration of such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution that the Grantee has made or is
making to the success of the Company or its Subsidiaries and
such other factors as the Committee shall determine. The
Committee shall also have the authority to consult with and
receive recommendations from officers and other personnel of
the Company and its Subsidiaries with regard to these matters.
The Committee may from time to time in granting Options under
the Plan prescribe such other terms and conditions concerning
such Options as it deems appropriate, including, without
limitation:
(i) prescribing the date or dates on which the Option
becomes exercisable;
(ii) providing that the Option rights accrue or become
exercisable in installments over a period of years,
or upon the attainment of stated goals or both; or
(iii) relating an Option to the continued employment of the
Grantee for a specified period of time.
(c) All Options granted to Grantees under this Plan shall be in
addition to regular salaries, Directors' fees, consulting
fees, legal or other professional fees, pension, life
insurance or other benefits related to their employment,
Directorships, or other contractual relationships with the
Company or its Subsidiaries. Neither the Plan nor any Option
granted under the Plan shall confer upon any person any right
to employment or Directorship or continuation of employment or
Directorship by the Company or its Subsidiaries, nor the
continuation of any contractual relationship beyond the term
specified therein.
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(d) The Committee in its sole discretion shall determine in each
case whether periods of military or government service shall
constitute a continuation of employment for the purposes of
this Plan or any Option.
(e) Only Key Employees may be granted Incentive Stock Options
under this Plan.
(f) No employee may be granted any Incentive Stock Option pursuant
to this Plan to the extent that the aggregate fair market
value (determined at the time the Option is granted) of the
Shares with respect to which Incentive Stock Options granted
to the employee under the terms of this Plan, are exercisable
for the first time by the employee during any calendar year
exceeds $100,000.
(g) Option agreements with respect to Incentive Stock Options
shall contain such terms and conditions as are necessary to
qualify such Options under Section 422A of the Internal
Revenue Code, as such section or other applicable sections
thereof may be amended from time to time.
5. Option Price. The option price per Share of any Option shall
be any price determined by the Committee; provided, however, that in no event
shall the option price per Share of any Option be less than (i) 33-1/3% or (ii)
in the case of Incentive Stock Options to be granted to an individual who owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company, 110%, of the Fair Market Value of the Shares underlying
such Option on the date such Option is granted.
6. Exercise of Options. An Option shall be deemed exercised when:
(i) the Company has received written notice of such exercise in
accordance with the terms of the Option,
(ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, and
(iii) arrangements that are satisfactory to the Committee in its
sole discretion have been made for the Grantee's payment to
the Company of the amount, if any, that is necessary for the
Company or Subsidiary employing the Grantee to withhold in
accordance with applicable Federal or state tax withholding
requirements.
Unless further limited by the Committee in any Option agreement, the option
price of any Shares purchased shall be paid in cash, by certified or official
bank check, by money order, by the Grantee's promissory note, with Shares
(either marketable free-trading Shares, or Shares that are "Restricted
Securities" as that term is defined in Rule 144 under the U.S. Securities Act of
1933, as amended, including but not limited to Shares acquired pursuant to a
partial and simultaneous exercise of the Option) or by a combination of the
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above provided further, however, that the Committee in its sole discretion may
accept a personal check in full or partial payment of any Shares. If the
exercise price is paid in whole or in part with Shares, then the value of the
Shares surrendered shall be their Fair Market Value on the business day
immediately preceding the date the Option is exercised. The Company in its sole
discretion may, on an individual basis or pursuant to a general program
established in connection with this Plan, lend money to a Grantee, guarantee a
loan to a Grantee, or otherwise assist a Grantee to obtain the cash necessary to
exercise all or a portion of an Option granted hereunder or to pay any tax
liability of the Grantee attributable to such exercise. If the exercise price is
paid in whole or part with the Grantee's promissory note, such note shall:
(w) provide for full recourse to the maker;
(x) be collateralized by the pledge of the Shares that
the Grantee purchases upon exercise of such Option;
(y) bear interest at the prime lending rate of the
Company's principal bank; and
(z) contain such other terms as the Committee in its sole
discretion shall reasonably require.
No Grantee (or permitted transferees) thereof shall be deemed to be a holder of
any Shares subject to an Option unless and until exercise has been completed
pursuant to clauses (i-iii) above. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date of
exercise, except as expressly provided in Section 9 hereof.
7. Exercisability of Options. Any Option shall become exercisable
in such amounts, at such intervals and upon such terms as the Committee shall
provide in the corresponding Option agreement, except as otherwise provided in
this Section 7.
(a) The expiration date of an Option shall be determined by the
Committee at the time of grant, but in no event shall an
Option be exercisable after the expiration of:
(i) 10 years from the date of grant of the Option; or
(ii) in the case of an Incentive Stock Option granted to
an individual who owns stock possessing more than 10%
of the total combined voting power of all classes of
voting stock of the Company, five years from the date
of the grant of the Option.
(b) Except to the extent otherwise provided in any Option
agreement, each outstanding Option shall become immediately
fully exercisable:
(i) if there occurs any transaction (which shall include
a series of transactions occurring within 60 days or
occurring pursuant to a plan) that has the result
that stockholders of the Company immediately before
such transaction cease to own at least 75% percent of
the voting stock of the Company or of any entity that
results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or
any other form of corporate transaction;
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(ii) if, during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board cease for any reason to
constitute at least a majority thereof, unless the
Board in existence immediately preceding the two year
period shall have nominated the new Directors whose
Directorships have created the altered Board
composition; or
(iii) if the stockholders of the Company shall approve a
plan of merger, consolidation, reorganization,
liquidation or dissolution in which the Company does
not survive (unless the approved merger,
consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
(iv) if the stockholders of the Company shall approve a
plan for the sale, lease, exchange or other
disposition of all or substantially all of the
property and assets of the Company (unless such
approved plan is subsequently abandoned).
(c) The Committee may in its sole discretion accelerate the date
on which any Option may be exercised.
8. Termination of Option Period.
(a) The unexercised portion of any Option shall automatically and
without notice terminate and become null and void at the time
of the earliest to occur of the following:
(i) if Grantee is an Employee, one week after the date on
which the Grantee's employment is terminated for any
reason other than by reason of:
(A) Cause (which, for purposes of this Plan,
shall mean the termination of the Grantee's
employment by reason of the Grantee's
willful misconduct or gross negligence);
(B) a mental or physical disability as
determined by a medical doctor satisfactory
to the Committee; or
(C) death;
provided, however, that the one week period may be
extended by the Committee to up to three months with
respect to Incentive Stock options and up to 18
months with respect to Non-Qualified Stock Options.
(ii) immediately upon the termination of the Grantee's
employment for Cause;
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(iii) six months after the date on which the Grantee's
employment is terminated by reason of a mental or
physical disability as determined by a medical doctor
satisfactory to the Committee;
(iv) (A) twelve months after the date of termination
of the Grantee's employment by reason of
death of the Grantee; or
(B) three months after the date on which the
Grantee shall die if such death shall occur
during the 6-month period specified in
Subsection 8(a)(iii) hereof.
(b) The Committee in its sole discretion may by giving written
notice ("Cancellation Notice") cancel, effective upon the date
of the consummation of any corporate transaction described in
Subsections 7(b)(iii) or (iv) hereof, any Option that remains
unexercised on such date. Such Cancellation Notice shall be
given a reasonable period of time prior to the proposed date
of such cancellation and may be given either before or after
stockholder approval of such corporate transaction.
9. Adjustment of Shares.
(a) If, at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or
decrease in the number of issued and outstanding Shares
through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum
number of Shares available for grant under the Plan,
so that the same percentage of the Company's issued
and outstanding Shares shall continue to be subject
to being so optioned; and
(ii) appropriate adjustment shall be made in the number of
Shares and the option price per Share thereof then
subject to any outstanding Option, so that the same
percentage of the Company's issued and outstanding
Shares shall remain subject to purchase at the same
aggregate option price.
(b) Subject to the specific terms of any Option agreement, the
Committee may change the terms of Options outstanding under
this Plan with respect to the option price or the number of
Shares subject to the Options, or both, when, in the
Committee's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in
Subsections 7(b)(iii) or (iv) hereof.
(c) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any
class, either in connection with direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to the
number of or option price of Shares then subject to
outstanding Options granted under the Plan.
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(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall
not affect in any manner the right or power of the Company to
make, authorize or consummate:
(i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's
capital structure or its business;
(ii) any merger or consolidation of the Company;
(iii) any issuance by the Company of debt securities or
preferred or preference stock that would rank above
the Shares subject to outstanding Options;
(iv) the dissolution or liquidation of the Company;
(v) any sale, transfer or assignment of all or any part
of the assets or business of the Company; or
(vi) any other corporate act or proceeding, whether of a
similar character or otherwise.
10. Transferability of Options. Each Option agreement shall
provide that the Option shall not be transferable by the Grantee otherwise than
by will or the laws of descent and distribution or, in the case of Non-Qualified
Stock Options, pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder; provided, however, that the Committee may waive
the foregoing transferability restriction with respect to Non-Qualified Stock
Options on a case-by-case basis.
11. Issuance of Shares. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to ensure
compliance with any applicable federal or state securities law or regulation
including, but not limited to, the following:
(i) a representation and warranty by the Grantee to the Company,
at the time any Option is exercised, that he is acquiring the
Shares to be issued to him for investment and not with a view
to, or for sale in connection with, the distribution of any
such Shares;
(ii) a representation, warranty and/or agreement to be bound by any
legends that are, in the opinion of the Committee, necessary
or appropriate to comply with the provisions of any securities
law deemed by the Committee to be applicable to the issuance
of the Shares and are endorsed upon the Share certificates;
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(iii) in the case of any Option that requires the Shares to be
issued pursuant to Rule 701 under the U.S. Securities Act of
1933, as amended ("Rule 701"), a representation and warranty
by the Grantee to the Company, that all of the terms and
conditions of Rule 701 have been met and are applicable under
the circumstances; and
(iv) in the case of any Option that requires the Company to
register the Shares under the Securities Act of 1933, as
amended, pursuant to a Registration Statement on Form S-8 or
any other form of Registration Statement then applicable, a
representation and warranty that all information provided by
the Grantee to the Company for the purpose of inclusion in
such Registration Statement is true and correct, together with
the undertaking of such Grantee to provide such information to
the Company on a current basis until such Registration
Statement shall become effective, and for a period of 90 days
thereafter.
12. Administration of the Plan.
(a) The Plan shall be administered by the Committee. The Committee
shall consist of not less than two Directors, all of whom
shall be Disinterested Persons, provided, however, that if no
Committee is appointed, the Board may administer the Plan,
provided that all members of the Board at the time are
Disinterested Persons. The Committee shall have all of the
powers of the Board with respect to the Plan. Any member of
the Committee may be removed at any time, with or without
cause, by resolution of the Board, and any vacancy occurring
in the membership of the Committee may be filled by
appointment by the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The
determinations and the interpretation and construction of any
provision of the Plan by the Committee shall be final and
conclusive.
(c) Any and all decisions or determinations of the Committee shall
be made either:
(i) by a majority vote of the members of the Committee at
a meeting; or
(ii) without a meeting by the unanimous written approval
of the members of the Committee.
13. Interpretation.
(a) If any provision of the Plan should be held invalid for any
reason, such holding shall not affect the remaining provisions
hereof, but instead the Plan shall be construed and enforced
as if such provision had never been included in the Plan.
(b) This Plan shall be governed by the laws of the State of
Delaware.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
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(d) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
14. Amendment and Discontinuation of the Plan. The Committee may
from time to time amend the Plan or any Option consistent with the Plan
provided, however, that (except to the extent provided in Section 9) no such
amendment may, without approval by the stockholders of the Company:
(a) increase the aggregate number of Shares reserved for Options;
(b) change the requirements for eligibility to receive Options; or
(c) materially increase the benefits accruing to participants
under the Plan and provided, further, that (except to the
extent provided in Section 8) no amendment or suspension of
the Plan or any Option issued hereunder shall substantially
impair any Option previously granted to any Grantee without
the consent of such Grantee.
15. Corporate Authority. The Company warrants and represents that
the Plan has been promulgated pursuant to proper corporate authority, including
but not limited to an affirmative vote of its Board at a meeting thereof duly
called at which a quorum was present. Further, at the next meeting of
shareholders of its common stock called or to be called for any purpose (the
"Shareholders' Meeting"), the Company undertakes to present the Plan to its
shareholders for their ratification and approval, whether or not required,
together with the affirmative recommendation of its Board. In the event of the
solicitation of proxies for the election of Directors or any other matter to be
voted upon at the Shareholders' Meeting, the Company undertakes to include
therein the solicitation of management proxies together with the representation
that such proxies will vote in favor of the Plan. The Company also undertakes to
take any corporate, legal or regulatory action necessary at any time during the
duration of the Plan reasonably designed to assure the continuation of the Plan
according to its terms. Should the validity of the Plan be challenged by any
stockholder, regulatory authority or other person at any time during its term,
the Company undertakes to retain such legal counsel and to take such other
actions as may be necessary to vigorously defend the continuation of the Plan
according to its terms.
16. Effective Date and Termination Date. The effective date of
this Plan shall be January 1, 2001, and the Plan shall terminate on the 10th
anniversary of the effective date (the "Termination Date"). After the
Termination Date, no new Options may be granted hereunder. However, Options
outstanding at the Termination Date date may continue to be exercised thereafter
pursuant to their terms.
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Dated as of the
day of_________ , 2001
Symphony Telecom International, Inc.
(SEAL)
By: ____________________________
Daniel Cullen, President
CERTIFICATION
-------------
The foregoing "2001 Employee Incentive and Stock Option Plan" was the
subject of a resolution duly passed at a meeting of the Board of Directors of
the Company acting in accordance with the By-Laws thereof that was held on
February 2, 2001.
Symphony Telecom International, Inc.
__________________________________
Daniel Cullen, Secretary
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