Exhibit 4
BioShield Technologies, Inc.
2002 NON-STATUTORY STOCK OPTION PLAN
As Amended February 28, 2002
1. Purpose of this Plan.
This Non-Statutory Stock Option Plan (the "Plan") is intended as an
employment incentive, to aid in attracting and retaining in the employ or
service of BioShield Technologies, Inc. (the "Company"), a Georgia corporation,
and any Affiliated Corporation, persons of experience and ability and whose
services are considered valuable, to encourage the sense of proprietorship in
such persons, and to stimulate the active interest of such persons in the
development and success of the Company. This Plan provides for the issuance of
non-statutory stock options ("NSOs" or "Options") which are not intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee (the "Committee") of the
Board which shall consist of at least three members of the Board. Until such
time as the Committee is duly constituted, the Board itself shall have and
fulfill the duties herein allocated to the Committee. The Committee shall have
full power and authority to designate Plan participants, to determine the
provisions and terms of respective NSOs (which need not be identical as to
number of shares covered by any NSO, the method of exercise as related to
exercise in whole or in installments, or otherwise), including the NSO price,
and to interpret the provisions and supervise the administration of this Plan.
The Committee may, in its discretion, provide that certain NSOs not vest (that
is, become exercisable) until expiration of a certain period after issuance or
until other conditions are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum.
All decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. If at any time the Board shall consist of seven or
more members, then the Board may amend this Plan to provide that the Committee
shall consist only of Board members who shall not have been eligible to
participate in this Plan (or similar stock or stock option plan) of the Company
or its affiliates at any time within one year prior to appointment to the
Committee.
All NSOs granted under this Plan are subject to, and may not be
exercised before, the approval of this Plan by the holders of a majority of the
Company's outstanding shares, and if such approval is not obtained, all NSOs
previously granted shall be void. Each NSO shall be evidenced by a written
agreement containing terms and conditions established by the Committee
consistent with the provisions of this Plan.
3. Designation of Participants.
The persons eligible for participation in this Plan as recipients of
NSOs shall include all full-time and part-time employees (as determined by the
Committee) and officers of the Company or of an Affiliated Corporation. In
addition, directors of the Company or any Affiliated Corporation who are not
employees of the Company or an Affiliated Corporation and any attorney,
consultant or other adviser to the Company or any Affiliated Corporation shall
be eligible to participate in this Plan. For all purposes of this Plan, any
director who is not also a common law employee and is granted an option under
this Plan shall be considered an "employee" until the effective date of the
director's resignation or removal from the Board of Directors, including removal
due to death or disability. The Committee shall have full power to designate,
from among eligible individuals, the persons to whom NSOs may be granted. A
person who has been granted an NSO hereunder may be granted an additional NSO or
NSOs, if the Committee shall so determine. The granting of an NSO shall not be
construed as a contract of employment or as entitling the recipient thereof to
any rights of continued employment.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
14,000,000 shares of Common Stock ("Stock"), of the Company shall be subject to
this Plan. The Stock subject to this Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company or any Affiliated
Corporation, and such amount of shares shall be and is hereby reserved for sale
for such purpose. Any of such shares which may remain unsold and which are not
subject to outstanding NSOs at the termination of this Plan shall cease to be
reserved for the purpose of this Plan, but until termination of this Plan, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of this Plan. Should any NSO expire or be canceled prior to its
exercise in full, the unexercised shares theretofore subject to such NSO may
again be subjected to an NSO under this Plan.
5. Option Price.
The purchase price of each share of Stock placed under NSO shall not be
less than ten percent (10%) of the fair market value of such share on the date
the NSO is granted. The fair market value of a share on a particular date shall
be deemed to be the average of either (i) the highest and lowest prices at which
shares were sold on the date of grant, if traded on a national securities
exchange, (ii) the high and low prices reported in the consolidated reporting
system, if traded on a "last sale reported" system, such as NASDAQ, or (iii) the
high bid and high asked price for over-the-counter securities. If no
transactions in the Stock occur on the date of grant, the fair market value
shall be determined as of the next earliest day for which reports or quotations
are available. If the common shares are not then quoted on any exchange or in
any quotation medium at the time the option is granted, then the Board of
Directors or Committee will use its discretion in selecting a good faith value
believed to represent fair market value based on factors then known to them. The
cash proceeds from the sale of Stock are to be added to the general funds of the
Company.
6. Exercise Period.
(a) The NSO exercise period shall be a term of not more than ten (10)
years from the date of granting of each NSO and shall automatically terminate:
(i) Upon termination of the optioned's employment with
the Company for cause;
(ii) At the expiration of twelve (12) months from the date
of termination of the optioned's employment with the
Company for any reason other than death, without
cause; provided, that if the optioned dies within
such twelve-month period, subclause (iii) below shall
apply; or
(iii) At the expiration of fifteen (15) months after the date
of death of the optioned.
(b) "Employment with the Company" as used in this Plan shall
include employment with any Affiliated Corporation, and NSOs
granted under this Plan shall not be affected by an employee's
transfer of employment among the Company and any Parent or
Subsidiary thereof. An optioned's employment with the Company
shall not be deemed interrupted or terminated by a bona fide
leave of absence (such as sabbatical leave or employment by
the Government) duly approved, military leave, maternity leave
or sick leave.
7. Exercise of Options.
(a) The Committee, in granting NSOs, shall have discretion to
determine the terms upon which NSOs shall be exercisable,
subject to applicable provisions of this Plan. Once available
for purchase, unpurchased shares of Stock shall remain subject
to purchase until the NSO expires or terminates in accordance
with Paragraph 6 above. Unless otherwise provided in the NSO,
an NSO may be exercised in whole or in part, one or more
times, but no NSO may be exercised for a fractional share of
Stock.
(b) NSOs may be exercised solely by the optionee during his
lifetime, or after his death (with respect to the number of
shares which the optioned could have purchased at the time of
death) by the person or persons entitled thereto under the
decedent's will or the laws of descent and distribution.
(c) The purchase price of the shares of Stock as to which an NSO
is exercised shall be paid in full at the time of exercise and
no shares of Stock shall be issued until full payment is made
therefor. Payment shall be made either (i) in cash,
represented by bank or cashier's check, certified check or
money order (ii) in lieu of payment for bona fide services
rendered, and such services were not in connection with the
offer or sale of securities in a capital raising transaction,
(iii) by delivering shares of the Company's Common Stock which
have been beneficially owned by the optioned, the optioned's
spouse, or both of them for a period of at least six (6)
months prior to the time of exercise (the "Delivered Stock")
in a number equal to the number of shares of Stock being
purchased upon exercise of the NSO or (iv) by delivery of
shares of corporate stock which are freely tradeable without
restriction and which are part of a class of securities which
has been listed for trading on the NASDAQ system or a national
securities exchange, with an aggregate fair market value equal
to or greater than the exercise price of the shares of Stock
being purchased under the NSO, or (v) a combination of cash,
services, Delivered Stock or other corporate shares. An NSO
shall be deemed exercised when written notice thereof,
accompanied by the appropriate payment in full, is received by
the Company. No holder of an NSO shall be, or have any of the
rights and privileges of, a shareholder of the Company in
respect of any shares of Stock purchasable upon exercise of
any part of an NSO unless and until certificates representing
such shares shall have been issued by the Company to him or
her.
8. Assignability.
No NSO shall be assignable or otherwise transferable (by the optioned
or otherwise) except by will or the laws of descent and distribution or except
as permitted in accordance with SEC Release No.33-7646 as effective April 7,
1999 and in particular that portion thereof which expands upon transferability
as is contained in Article III entitled "Transferable Options and Proxy
Reporting" as indicated in Section A 1 through 4 inclusive and Section B
thereof. No NSO shall be pledged or hypothecated in any manner, whether by
operation of law or otherwise, nor be subject to execution, attachment or
similar process.
9. Reorganizations and Recapitalizations of the Company.
(a) The existence of this Plan and NSOs granted hereunder shall
not affect in any way the right or power of the Company or its
shareholders to make or authorize any and all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stocks ahead of or
affecting the Company's Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any sale,
exchange or transfer of all or any part of its assets or
business, or the other corporation act or proceeding, whether
of a similar character or otherwise.
(b) The shares of Stock with respect to which NSOs may be granted
hereunder are shares of the Common Stock of the Company as
currently constituted. If, and whenever, prior to delivery by
the Company of all of the shares of Stock which are subject to
NSOs granted hereunder, the Company shall effect a subdivision
or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, a stock split, combination of
shares (reverse stock split) or recapitalization or other
increase or reduction of the number of shares of the Common
Stock outstanding without receiving compensation therefor in
money, services or property, then the number of shares of
Stock available under this Plan and the number of shares of
Stock with respect to which NSOs granted hereunder may
thereafter be exercised shall (i) in the event of an increase
in the number of outstanding shares, be proportionately
increased, and the cash consideration payable per share shall
be proportionately reduced; and (ii) in the event of a
reduction in the number of outstanding shares, be
proportionately reduced, and the cash consideration payable
per share shall be proportionately increased.
(c) If the Company is reorganized, merged, consolidated or party
to a plan of exchange with another corporation pursuant to
which shareholders of the Company receive any shares of stock
or other securities, there shall be substituted for the shares
of Stock subject to the unexercised portions of outstanding
NSOs an appropriate number of shares of each class of stock or
other securities which were distributed to the shareholders of
the Company in respect of such shares of Stock in the case of
a reorganization, merger, consolidation or plan of exchange;
provided, however, that all such NSOs may be canceled by the
Company as of the effective date of a reorganization, merger,
consolidation, plan of exchange, or any dissolution or
liquidation of the Company, by giving notice to each optioned
or his personal representative of its intention to do so and
by permitting the purchase of all the shares subject to such
outstanding NSOs for a period of not less than thirty (30)
days during the sixty (60) days next preceding such effective
date.
(d) Except as expressly provided above, the Company's issuance of
shares of Stock of any class, or securities convertible into
shares of Stock of any class, for cash or property, or for
labor or services, either upon 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 shares of Stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to NSOs granted
hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the shares of Stock covered by this Plan have been registered
under the Securities Act of 1933, as amended, each person exercising an NSO
under this Plan may be required by the Company to give a representation in
writing that he is acquiring such shares for his own account for investment and
not with a view to, or for sale in connection with, the distribution of any part
thereof.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of December 21, 2001 (the date of its
adoption by the stockholders) as Amended February 28, 2002, (the date of its
adoption by the Board) and no NSO shall be granted pursuant to this Plan after
its expiration. This Plan shall expire on December 20, 2011 except as to NSOs
then outstanding, which shall remain in effect until they have expired or been
exercised.
12. Amendments or Termination.
The Board may amend, alter or discontinue this Plan at any time in such
respects as it shall deem advisable in order to conform to any change in any
other applicable law, or in order to comply with the provisions of any rule or
regulation of the Securities and Exchange Commission required to exempt this
Plan or any NSOs granted thereunder from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or in any other
respect not inconsistent with Section 16(b) of the Exchange Act; provided, that
no amendment or alteration shall be made which would impair the rights of any
participant under any NSO theretofore granted, without his consent (unless made
solely to conform such NSO to, and necessary because of, changes in the
foregoing laws, rules or regulations), and the Board may further amend or alter
this Plan in order to increase the total number of shares reserved for the
purposes of this Plan except that no amendment or alteration to the Plan shall
be made without the approval of stockholders which would:
(a) Decrease the NSO price provided for in Paragraph 5 (except as
provided in Paragraph 9), or change the classes of persons
eligible to participate in this Plan as provided in Paragraph
3; or
(b) Extend the NSO period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to participants
under this Plan; or
(d) Materially modify the requirements as to eligibility for
participation in this Plan; or
(e) Extend the expiration date of this Plan as set forth in
Paragraph 11.
13. Government Regulations.
This Plan, and the granting and exercise of NSOs hereunder, and the
obligation of the Company to sell and deliver shares of Stock under such NSOs,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
14. Liability.
No member of the Board of Directors, the Committee or officers or
employees of the Company or any Affiliated Corporation shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan.
15. Miscellaneous.
(a) The term "Affiliated Corporation" used herein shall mean any
Parent or Subsidiary.
(b) The term "Parent" used herein shall mean any corporation
owning 50 percent or more of the total combined voting stock
of all classes of the Company or of another corporation
qualifying as a Parent within this definition.
(c) The term "Subsidiary" used herein shall mean any corporation
more than 50 percent of whose total combined voting stock of
all classes is held by the Company or by another corporation
qualifying as a Subsidiary within this definition.
16. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term
of this Plan, grant new options to an employee under this Plan or any other
stock option plan of the Company on the condition that such employee shall
surrender for cancellation one or more outstanding options which represent the
right to purchase (after giving effect to any previous partial exercise thereof)
a number of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Option may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Corporation, or the merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the Company or an Affiliated Corporation of the assets of the employing
corporation, or the acquisition by the Company or an Affiliated Corporation of
stock of the employing corporation as the result of which it becomes an
Affiliated Corporation.
17. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be
required to collect withholding taxes upon the exercise of a NSO. The Company
may require, as a condition to the exercise of a NSO, that the optioned
concurrently pay to the Company the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise, in such
amount as the Committee or the Company in its discretion may determine. In lieu
of part or all of any such payment, the optioned may elect to have the Company
withhold from the shares to be issued upon exercise of the option that number of
shares having a Fair Market Value equal to the amount which the Company is
required to withhold.
18. Transferability in Accordance With Form S-8 as Amended and Effective
April 7, 1999.
Notwithstanding anything to the contrary as may be contained in this
Plan regarding rights as to transferability or lack thereof, all options granted
hereunder may and shall be transferable to the extent permitted in accordance
with SEC Release No. 33-7646 entitled "Registration of Securities on Form S-8"
as effective April 7, 1999 and in particular in accordance with that portion of
such Release which expands Form S-8 to include stock option exercise by family
members so that the rules governing the use of Form S-8 (a) do not impede
legitimate intra family transfer of options and (b) may facilitate transfer for
estate planning purposes - all as more specifically defined in Article III,
Sections A and B thereto, the contents of which are herewith incorporated by
reference.
19. Establishment of "Broadly Based" Plan.
It is the intention of the Company that the Plan comply, in all
respects, with what is referred to as a "Broadly Based Plan" in Nasdaq
Marketplace Rule 4350(i)(1)(A) and such other sections in the Nasdaq Marketplace
Rules as may be applicable to "Broadly Based Plans". In that respect it is
understood and agreed as follows:
1. While stockholder approval was sought for establishment of the Plan no
stockholder approval is required for amendments thereto and approval of
the majority of the Company's Board of Directors shall suffice for any
and all amendments. See "Amendments" in Exhibit 99 - "Prospectus".
2. Less than fifty percent (50%) of all options issued under the Plan
shall be issued to officers and directors of the Company; "officers"
and "directors" being defined herein in the same manner as defined in
Section 16 of the Securities Exchange Act of 1934 and
3. "Broadly Based" as defined herein shall mean that at the end of three
(3) years from the date of the Plan as amended at least fifty one
percent (51%) of all options granted thereunder shall have been granted
to "rank and file" personnel of the Company (i.e., persons who are not
officers and directors as defined in "2" above) and that at the
anniversary date of each succeeding year no less than 51% of all
options granted shall have been granted to the aforesaid "rank and
file".
BioShield Technologies, Inc.
By:/Timothy C. Moses/
------------------------
Timothy C. Moses, Chairman, President
and Chief Executive Officer
ATTEST:
By: /Angela B. Howell/
-----------------------
Angela B. Howell, Secretary
(SEAL)
CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that
the foregoing 2002 Non-Statutory Stock Option Plan was duly approved by the
requisite majority of the Company's Board of Directors and subsequently approved
by its stockholders as of December 21, 2001 and subsequently Amended February
28, 2002 in accordance with the required majority of the Company's Board of
Directors .
/Angela B. Howell/
-----------------
Angela B. Howell, Secretary
(SEAL)
OPTION AGREEMENT
The undersigned hereby grants ________________________ (pursuant to the
BioShield Technologies, Inc. 2002 Non-Statutory Stock Option Plan dated December
21, 2001 as Amended February 28, 2002 an option to purchase _________ shares of
BioShield Technologies, Inc. (the "Corporation").
Option Period. This option shall be for a period of ten years from the date of
this Option Agreement ("Option Period").
Option Price. The option price shall be $___ per share for an aggregate of $____
if the entire shares are purchased. The option price of the shares of Common
Stock shall be paid in full at the time of exercise and no shares of Common
Stock shall be issued until full payment is made therefor. Payment shall be made
either (i) in cash, represented by bank or cashier's check, certified check or
money order (ii) in lieu of payment for bona fide services rendered, and such
services were not in connection with the offer or sale of securities in a
capital-raising transaction, (iii) by delivering shares of the undersigned's
Common Stock which have been beneficially owned by the optioned, the optioned's
spouse, or both of them for a period of at least six (6) months prior to the
time of exercise (the "Delivered Stock") in a number equal to the number of
shares of Stock being purchased upon exercise of the Option or (iv) by delivery
of shares of corporate stock which are freely tradeable without restriction and
which are part of a class of securities which has been listed for trading on the
NASDAQ system or a national securities exchange, with an aggregate fair market
value equal to or greater than the exercise price of the shares of Stock being
purchased under the Option, or (v) a combination of cash, services, Delivered
Stock or other corporate shares.
Shareholder Rights. No holder of an Option shall be, or have any of the rights
and privileges of, a shareholder of the Corporation in respect of any shares of
Common Stock purchasable upon exercise of any part of an Option unless and until
certificates representing such shares shall have been issued by the Corporation
to him or her.
Determination of Exercise Date. This Option or a portion of this Option shall be
deemed exercised when written notice thereof, accompanied by the appropriate
payment in full, is received by the Corporation.
Date: ___________, 2002
BioShield Technologies, Inc.
__________________
By: Timothy C. Moses, President and
Chief Executive Officer
_________________
By: Angela B. Howell, Secretary