EQUITYALERT.COM, INC
INCENTIVE STOCK PLAN
1. Objectives. The EquityAlert.com, Inc. 2001-- Incentive Stock Plan (the
"Plan") is designed to retain directors, executives and selected employees and
consultants and reward them for making major contributions to the success of the
Company. These objectives are accomplished by making long-term incentive awards
under the Plan thereby providing Participants with a proprietary interest in the
growth and performance of the Company.
2. Definitions.
(a) "Board" - The Board of Directors of the Company.
(b) "Nevada Securities Rules" - Chapter--, of Article -- of Title --
of the corporate securities rules of the state of Nevada.
(c) "Code" - The Internal Revenue Code of 1986, as amended from time
to time.
(d) "Committee" - The Executive Compensation Committee of the
Company's Board, or such other committee of the Board that is
designated by the Board to administer the Plan, composed of not
less than two members of the Board all of whom are disinterested
persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(e) "Company" - EquityAlert.com, Inc. and its subsidiaries including
subsidiaries of subsidiaries.
(f) "Exchange Act" - The Securities Exchange Act of 1934, as amended
from time to time.
(g) "Fair Market Value" - The fair market value of the Company's
issued and outstanding Stock as determined in good faith by the
Board or Committee.
(h) "Grant" - The grant of any form of stock option, stock award, or
stock purchase offer, whether granted singly, in combination or
in tandem, to a Participant pursuant to such terms, conditions
and limitations as the Committee may establish in order to
fulfill the objectives of the Plan.
(i) "Grant Agreement" - An agreement between the Company and a
Participant that sets forth the terms, conditions and limitations
applicable to a Grant.
(j) "Option" - Either an Incentive Stock Option, in accordance with
Section 422 of Code, or a Nonstatutory Option, to purchase the
Company's Stock that may be awarded to a Participant under the
Plan. A Participant who receives an award of an Option shall be
referred to as an "Optionee."
(k) "Participant" - A director, officer, employee or consultant of
the Company to whom an Award has been made under the Plan.
(l) "Restricted Stock Purchase Offer" - A Grant of the right to
purchase a specified number of shares of Stock pursuant to a
written agreement issued under the Plan.
(m) "Securities Act" - The Securities Act of 1933, as amended from
time to time.
(n) "Stock" - Authorized and issued or unissued shares of common
stock of the Company.
(o) "Stock Award" - A Grant made under the Plan in stock or
denominated in units of stock for which the Participant is not
obligated to pay additional consideration.
3. Administration. The Plan shall be administered by the Board, provided
however, that the Board may delegate such administration to the Committee.
Subject to the provisions of the Plan, the Board and/or the Committee shall have
authority to (a) grant, in its discretion, Incentive Stock Options in accordance
with Section 422 of the Code, or Nonstatutory Options, Stock Awards or
Restricted Stock Purchase Offers; (b) determine in good faith the fair market
value of the Stock covered by any Grant; (c) determine which eligible persons
shall receive Grants and the number of shares, restrictions, terms and
conditions to be included in such Grants; (d) construe and interpret the Plan;
(e) promulgate, amend and rescind rules and regulations relating to its
administration, and correct defects, omissions and inconsistencies in the Plan
or any Grant; (f) consistent with the Plan and with the consent of the
Participant, as appropriate, amend any outstanding Grant or amend the exercise
date or dates thereof; (g) determine the duration and purpose of leaves of
absence which may be granted to Participants without constituting termination of
their employment for the purpose of the Plan or any Grant; and (h) make all
other determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan or
selection of Participants shall be conclusive and final. No member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Grant made thereunder.
4. Eligibility.
(a) General: The persons who shall be eligible to receive Grants
shall be directors, officers, employees or consultants to the
Company. The term consultant shall mean any person, other than an
employee, who is engaged by the Company to render services and is
compensated for such services. An Optionee may hold more than one
Option. Any issuance of a Grant to an officer or director of the
Company subsequent to the first registration of any of the
securities of the Company under the Exchange Act shall comply
with the requirements of Rule 16b-3.
(b) Incentive Stock Options: Incentive Stock Options may only be
issued to employees of the Company. Incentive Stock Options may
be granted to officers or directors, provided they are also
employees of the Company. Payment of a director's fee shall not
be sufficient to constitute employment by the Company.
The Company shall not grant an Incentive Stock Option under the Plan to any
employee if such Grant would result in such employee holding the right to
exercise for the first time in any one calendar year, under all Incentive Stock
Options granted under the Plan or any other plan maintained by the Company, with
respect to shares of Stock having an aggregate fair market value, determined as
of the date of the Option is granted, in excess of $100,000. Should it be
determined that an Incentive Stock Option granted under the Plan exceeds such
maximum for any reason other than a failure in good faith to value the Stock
subject to such option, the excess portion of such option shall be considered a
Nonstatutory Option. To the extent the employee holds two (2) or more such
Options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such Option as Incentive Stock
Options under the Federal tax laws shall be applied on the basis of the order in
which such Options are granted. If, for any reason, an entire Option does not
qualify as an Incentive Stock Option by reason of exceeding such maximum, such
Option shall be considered a Nonstatutory Option.
(c) Nonstatutory Option: The provisions of the foregoing Section 4(b)
shall not apply to any Option designated as a "Nonstatutory
Option" or which sets forth the intention of the parties that the
Option be a Nonstatutory Option.
(d) Stock Awards and Restricted Stock Purchase Offers: The provisions
of this Section 4 shall not apply to any Stock Award or
Restricted Stock Purchase Offer under the Plan.
5. Stock.
(a) Authorized Stock: Stock subject to Grants may be either unissued
or reacquired Stock.
(b) Number of Shares: Subject to adjustment as provided in Section
6(i) of the Plan, the total number of shares of Stock which may
be purchased or granted directly by Options, Stock Awards or
Restricted Stock Purchase Offers, or purchased indirectly through
exercise of Options granted under the Plan shall not exceed
20,000,000. If any Grant shall for any reason terminate or
expire, any shares allocated thereto but remaining unpurchased
upon such expiration or termination shall again be available for
Grants with respect thereto under the Plan as though no Grant had
previously occurred with respect to such shares. Any shares of
Stock issued pursuant to a Grant and repurchased pursuant to the
terms thereof shall be available for future Grants as though not
previously covered by a Grant.
(c) Reservation of Shares: The Company shall reserve and keep
available at all times during the term of the Plan such number of
shares as shall be sufficient to satisfy the requirements of the
Plan. If, after reasonable efforts, which efforts shall not
include the registration of the Plan or Grants under the
Securities Act, the Company is unable to obtain authority from
any applicable regulatory body, which authorization is deemed
necessary by legal counsel for the Company for the lawful
issuance of shares hereunder, the Company shall be relieved of
any liability with respect to its failure to issue and sell the
shares for which such requisite authority was so deemed necessary
unless and until such authority is obtained.
(d) Application of Funds The proceeds received by the Company from
the sale of Stock pursuant to the exercise of Options or rights
under Stock Purchase Agreements will be used for general
corporate purposes.
(e) No Obligation to Exercise The issuance of a Grant shall impose no
obligation upon the Participant to exercise any rights under such
Grant.
6. Terms and Conditions of Options. Options granted hereunder shall be
evidenced by agreements between the Company and the respective Optionees, in
such form and substance as the Board or Committee shall from time to time
approve. The form of Incentive Stock Option Agreement attached hereto as Exhibit
"A" and the three forms of a Nonstatutory Stock Option Agreement for employees,
for directors and for consultants, attached hereto as Exhibits "B-1," "B-2" and
"B-3," respectively, shall be deemed to be approved by the Board. Option
agreements need not be identical, and in each case may include such provisions
as the Board or Committee may determine, but all such agreements shall be
subject to and limited by the following terms and conditions:
(a) Number of Shares: Each Option shall state the number of shares to
which it pertains.
(b) Exercise Price: Each Option shall state the exercise price, which
shall be determined as follows:
(i) Any Incentive Stock Option granted to a person who at the
time the Option is granted owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing
more than ten percent (10%) of the total combined voting
power or value of all classes of stock of the Company ("Ten
Percent Holder") shall have an exercise price of no less
than 110% of the Fair Market Value of the Stock as of the
date of grant; and
(ii) Incentive Stock Options granted to a person who at the time
the Option is granted is not a Ten Percent Holder shall have
an exercise price of no less than 100% of the Fair Market
Value of the Stock as of the date of grant.
For the purposes of this Section 6(b), the Fair Market Value shall be as
determined by the Board in good faith, which determination shall be conclusive
and binding; provided however, that if there is a public market for such Stock,
the Fair Market Value per share shall be the average of the bid and asked prices
(or the closing price if such stock is listed on the NASDAQ National Market
System or Small Cap Issue Market) on the date of grant of the Option, or if
listed on a stock exchange, the closing price on such exchange on such date of
grant.
(c) Medium and Time of Payment: The exercise price shall become
immediately due upon exercise of the Option and shall be paid in
cash or check made payable to the Company. Should the Company's
outstanding Stock be registered under Section 12(g) of the
Exchange Act at the time the Option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Stock held by the Optionee for the requisite
period necessary to avoid a charge to the Company's earnings
for financial reporting purposes and valued at Fair Market
Value on the exercise date, or
(ii) through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable
written instructions (a) to a Company designated brokerage
firm to effect the immediate sale of the purchased shares
and remit to the Company, out of the sale proceeds available
on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares
plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company by
reason of such purchase and (b) to the Company to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
At the discretion of the Board, exercisable either at the time of Option
grant or of Option exercise, the exercise price may also be paid (i) by
Optionee's delivery of a promissory note in form and substance satisfactory to
the Company and permissible under the securities rules of the State of Nevada
and bearing interest at a rate determined by the Board in its sole discretion,
but in no event less than the minimum rate of interest required to avoid the
imputation of compensation income to the Optionee under the Federal tax laws, or
(ii) in such other form of consideration permitted by the Nevada corporations
law as may be acceptable to the Board.
(d) Term and Exercise of Options: Any Option granted to an employee
of the Company shall become exercisable over a period of no
longer than five (5) years, and no less than twenty percent (20%)
of the shares covered thereby shall become exercisable annually.
No Option shall be exercisable, in whole or in part, prior to one
(1) year from the date it is granted unless the Board shall
specifically determine otherwise, as provided herein. In no event
shall any Option be exercisable after the expiration of ten (10)
years from the date it is granted, and no Incentive Stock Option
granted to a Ten Percent Holder shall, by its terms, be
exercisable after the expiration of five (5) years from the date
of the Option. Unless otherwise specified by the Board or the
Committee in the resolution authorizing such Option, the date of
grant of an Option shall be deemed to be the date upon which the
Board or the Committee authorizes the granting of such Option.
Each Option shall be exercisable to the nearest whole share, in
installments or otherwise, as the respective Option agreements may provide.
During the lifetime of an Optionee, the Option shall be exercisable only by the
Optionee and shall not be assignable or transferable by the Optionee, and no
other person shall acquire any rights therein. To the extent not exercised,
installments (if more than one) shall accumulate, but shall be exercisable, in
whole or in part, only during the period for exercise as stated in the Option
agreement, whether or not other installments are then exercisable.
(e) Termination of Status as Employee, Consultant or Director: If
Optionee's status as an employee shall terminate for any reason
other than Optionee's disability or death, then Optionee (or if
the Optionee shall die after such termination, but prior to
exercise, Optionee's personal representative or the person
entitled to succeed to the Option) shall have the right to
exercise the portions of any of Optionee's Incentive Stock
Options which were exercisable as of the date of such
termination, in whole or in part, not less than 30 days nor more
than three (3) months after such termination (or, in the event of
"termination for cause" as that term is defined in Section of the
Nevada Labor Code and case law related thereto, or by the terms
of the Plan or the Option Agreement or an employment agreement,
the Option shall automatically terminate as of the termination of
employment as to all shares covered by the Option).
With respect to Nonstatutory Options granted to employees, directors or
consultants, the Board may specify such period for exercise, not less than 30
days (except that in the case of "termination for cause" or removal of a
director, the Option shall automatically terminate as of the termination of
employment or services as to shares covered by the Option, following termination
of employment or services as the Board deems reasonable and appropriate. The
Option may be exercised only with respect to installments that the Optionee
could have exercised at the date of termination of employment or services.
Nothing contained herein or in any Option granted pursuant hereto shall be
construed to affect or restrict in any way the right of the Company to terminate
the employment or services of an Optionee with or without cause.
(f) Disability of Optionee: If an Optionee is disabled (within the
meaning of Section 22(e)(3) of the Code) at the time of
termination, the three (3) month period set forth in Section 6(e)
shall be a period, as determined by the Board and set forth in
the Option, of not less than six months nor more than one year
after such termination.
(g) Death of Optionee: If an Optionee dies while employed by, engaged
as a consultant to, or serving as a Director of the Company, the
portion of such Optionee's Option which was exercisable at the
date of death may be exercised, in whole or in part, by the
estate of the decedent or by a person succeeding to the right to
exercise such Option at any time within (i) a period, as
determined by the Board and set forth in the Option, of not less
than six (6) months nor more than one (1) year after Optionee's
death, which period shall not be more, in the case of a
Nonstatutory Option, than the period for exercise following
termination of employment or services, or (ii) during the
remaining term of the Option, whichever is the lesser. The Option
may be so exercised only with respect to installments exercisable
at the time of Optionee's death and not previously exercised by
the Optionee.
(h) Nontransferability of Option: No Option shall be transferable by
the Optionee, except by will or by the laws of descent and
distribution.
(i) Recapitalization: Subject to any required action of
shareholders, the number of shares of Stock covered by each
outstanding Option, and the exercise price per share thereof
set forth in each such Option, shall be proportionately
adjusted for any increase or decrease in the number of
issued shares of Stock of the Company resulting from a stock
split, stock dividend, combination, subdivision or
reclassification of shares, or the payment of a stock
dividend, or any other increase or decrease in the number of
such shares affected without receipt of consideration by the
Company; provided, however, the conversion of any
convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration" by the
Company.
In the event of a proposed dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving entity, or a
sale of all or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is determined by the
Board, which date shall be no later than the consummation of such
Reorganization. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving of such surviving entity, as applicable, which on an equitable basis
shall provide the Optionee with substantially the same economic benefit as such
unexercised Option, then the Board may grant to such Optionee, in its sole and
absolute discretion and without obligation, the right for a period commencing
thirty (30) days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during the remaining
term of the Option, whichever is the lesser, to exercise any unexpired Option or
Options without regard to the installment provisions of Paragraph 6(d) of the
Plan; provided, that any such right granted shall be granted to all Optionees
not receiving an offer to receive substitute options on a consistent basis, and
provided further, that any such exercise shall be subject to the consummation of
such Reorganization.
Subject to any required action of shareholders, if the Company shall be the
surviving entity in any merger or consolidation, each outstanding Option
thereafter shall pertain to and apply to the securities to which a holder of
shares of Stock equal to the shares subject to the Option would have been
entitled by reason of such merger or consolidation.
In the event of a change in the Stock of the Company as presently
constituted, which is limited to a change of all of its authorized shares
without par value into the same number of shares with a par value, the shares
resulting from any such change shall be deemed to be the Stock within the
meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided in this Section 6(i), the Optionee shall have no rights by reason of
any subdivision or consolidation of shares of stock of any class or the payment
of any stock dividend or any other increase or decrease in the number of shares
of stock of any class, and the number or price of shares of Stock subject to any
Option shall not be affected by, and no adjustment shall be made by reason of,
any dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.
The Grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Company to make any adjustments, reclassifications,
reorganizations or changes in its capital or business structure or to merge,
consolidate, dissolve, or liquidate or to sell or transfer all or any part of
its business or assets.
(j) Rights as a Shareholder: An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until
the effective date of the issuance of the shares following
exercise of such Option by Optionee. 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 such stock
certificate is issued, except as expressly provided in Section
6(i) hereof.
(k) Modification, Acceleration, Extension, and Renewal of Options:
Subject to the terms and conditions and within the limitations of
the Plan, the Board may modify an Option, or, once an Option is
exercisable, accelerate the rate at which it may be exercised,
and may extend or renew outstanding Options granted under the
Plan or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of
new Options in substitution for such Options, provided such
action is permissible under Section 422 of the Code and the
Nevada securities rules. Notwithstanding the provisions of this
Section 6(k), however, no modification of an Option shall,
without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights or obligations under any Option
theretofore granted under the Plan.
(l) Exercise Before Exercise Date: At the discretion of the Board,
the Option may, but need not, include a provision whereby the
Optionee may elect to exercise all or any portion of the Option
prior to the stated exercise date of the Option or any
installment thereof. Any shares so purchased prior to the stated
exercise date shall be subject to repurchase by the Company upon
termination of Optionee's employment as contemplated by Section
6(n) hereof prior to the exercise date stated in the Option and
such other restrictions and conditions as the Board or Committee
may deem advisable.
(m) Other Provisions: The Option agreements authorized under the Plan
shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Options, as the
Board or the Committee shall deem advisable. Shares shall not be
issued pursuant to the exercise of an Option, if the exercise of
such Option or the issuance of shares thereunder would violate,
in the opinion of legal counsel for the Company, the provisions
of any applicable law or the rules or regulations of any
applicable governmental or administrative agency or body, such as
the Code, the Securities Act, the Exchange Act, the Nevada
securities rules, Nevada corporation law, and the rules
promulgated under the foregoing or the rules and regulations of
any exchange upon which the shares of the Company are listed.
Without limiting the generality of the foregoing, the exercise of
each Option shall be subject to the condition that if at any time
the Company shall determine that (i) the satisfaction of
withholding tax or other similar liabilities, or (ii) the
listing, registration or qualification of any shares covered by
such exercise upon any securities exchange or under any state or
federal law, or (iii) the consent or approval of any regulatory
body, or (iv) the perfection of any exemption from any such
withholding, listing, registration, qualification, consent or
approval is necessary or desirable in connection with such
exercise or the issuance of shares thereunder, then in any such
event, such exercise shall not be effective unless such
withholding, listing registration, qualification, consent,
approval or exemption shall have been effected, obtained or
perfected free of any conditions not acceptable to the Company.
(n) Repurchase Agreement: The Board may, in its discretion, require
as a condition to the Grant of an Option hereunder, that an
Optionee execute an agreement with the Company, in form and
substance satisfactory to the Board in its discretion
("Repurchase Agreement"), (i) restricting the Optionee's right to
transfer shares purchased under such Option without first
offering such shares to the Company or another shareholder of the
Company upon the same terms and conditions as provided therein;
and (ii) providing that upon termination of Optionee's employment
with the Company, for any reason, the Company (or another
shareholder of the Company, as provided in the Repurchase
Agreement) shall have the right at its discretion (or the
discretion of such other shareholders) to purchase and/or redeem
all such shares owned by the Optionee on the date of termination
of his or her employment at a price equal to (A) the fair value
of such shares as of such date of termination, or (B) if such
repurchase right lapses at 20% of the number of shares per year,
the original purchase price of such shares, and upon terms of
payment permissible under the Nevada securities rules; provided
that in the case of Options or Stock Awards granted to officers,
directors, consultants or affiliates of the Company, such
repurchase provisions may be subject to additional or greater
restrictions as determined by the Board or Committee.
7. Stock Awards and Restricted Stock Purchase Offers.
(a) Types of Grants.
(i) Stock Award. All or part of any Stock Award under the Plan
may be subject to conditions established by the Board or the
Committee, and set forth in the Stock Award Agreement, which
may include, but are not limited to, continuous service with
the Company, achievement of specific business objectives,
increases in specified indices, attaining growth rates and
other comparable measurements of Company performance. Such
Awards may be based on Fair Market Value or other specified
valuation. All Stock Awards will be made pursuant to the
execution of a Stock Award Agreement substantially in the
form attached hereto as Exhibit "C".
(ii) Restricted Stock Purchase Offer. A Grant of a Restricted
Stock Purchase Offer under the Plan shall be subject to such
(i) vesting contingencies related to the Participant's
continued association with the Company for a specified time
and (ii) other specified conditions as the Board or
Committee shall determine, in their sole discretion,
consistent with the provisions of the Plan. All Restricted
Stock Purchase Offers shall be made pursuant to a Restricted
Stock Purchase Offer substantially in the form attached
hereto as Exhibit "D".
(b) Conditions and Restrictions. Shares of Stock which Participants
may receive as a Stock Award under a Stock Award Agreement or
Restricted Stock Purchase Offer under a Restricted Stock Purchase
Offer may include such restrictions as the Board or Committee, as
applicable, shall determine, including restrictions on transfer,
repurchase rights, right of first refusal, and forfeiture
provisions. When transfer of Stock is so restricted or subject to
forfeiture provisions it is referred to as "Restricted Stock".
Further, with Board or Committee approval, Stock Awards or
Restricted Stock Purchase Offers may be deferred, either in the
form of installments or a future lump sum distribution. The Board
or Committee may permit selected Participants to elect to defer
distributions of Stock Awards or Restricted Stock Purchase Offers
in accordance with procedures established by the Board or
Committee to assure that such deferrals comply with applicable
requirements of the Code including, at the choice of
Participants, the capability to make further deferrals for
distribution after retirement. Any deferred distribution, whether
elected by the Participant or specified by the Stock Award
Agreement, Restricted Stock Purchase Offers or by the Board or
Committee, may require the payment be forfeited in accordance
with the provisions of Section 7(c). Dividends or dividend
equivalent rights may be extended to and made part of any Stock
Award or Restricted Stock Purchase Offers denominated in Stock or
units of Stock, subject to such terms, conditions and
restrictions as the Board or Committee may establish.
(c) Cancellation and Rescission of Grants. Unless the Stock Award
Agreement or Restricted Stock Purchase Offer specifies otherwise,
the Board or Committee, as applicable, may cancel any unexpired,
unpaid, or deferred Grants at any time if the Participant is not
in compliance with all other applicable provisions of the Stock
Award Agreement or Restricted Stock Purchase Offer, the Plan and
with the following conditions:
(i) A Participant shall not render services for any organization
or engage directly or indirectly in any business which, in
the judgment of the chief executive officer of the Company
or other senior officer designated by the Board or
Committee, is or becomes competitive with the Company, or
which organization or business, or the rendering of services
to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the
Company. For Participants whose employment has terminated,
the judgment of the chief executive officer shall be based
on the Participant's position and responsibilities while
employed by the Company, the Participant's post-employment
responsibilities and position with the other organization or
business, the extent of past, current and potential
competition or conflict between the Company and the other
organization or business, the effect on the Company's
customers, suppliers and competitors and such other
considerations as are deemed relevant given the applicable
facts and circumstances. A Participant who has retired shall
be free, however, to purchase as an investment or otherwise,
stock or other securities of such organization or business
so long as they are listed upon a recognized securities
exchange or traded over-the-counter, and such investment
does not represent a substantial investment to the
Participant or a greater than 10 percent equity interest in
the organization or business.
(ii) A Participant shall not, without prior written authorization
from the Company, disclose to anyone outside the Company, or
use in other than the Company's business, any confidential
information or material, as defined in the Company's
Proprietary Information and Invention Agreement or similar
agreement regarding confidential information and
intellectual property, relating to the business of the
Company, acquired by the Participant either during or after
employment with the Company.
(iii)A Participant, pursuant to the Company's Proprietary
Information and Invention Agreement, shall disclose promptly
and assign to the Company all right, title and interest in
any invention or idea, patentable or not, made or conceived
by the Participant during employment by the Company,
relating in any manner to the actual or anticipated
business, research or development work of the Company and
shall do anything reasonably necessary to enable the Company
to secure a patent where appropriate in the United States
and in foreign countries.
(iv) Upon exercise, payment or delivery pursuant to a Grant, the
Participant shall certify on a form acceptable to the
Committee that he or she is in compliance with the terms and
conditions of the Plan. Failure to comply with all of the
provisions of this Section 7(c) prior to, or during the six
months after, any exercise, payment or delivery pursuant to
a Grant shall cause such exercise, payment or delivery to be
rescinded. The Company shall notify the Participant in
writing of any such rescission within two years after such
exercise, payment or delivery. Within ten days after
receiving such a notice from the Company, the Participant
shall pay to the Company the amount of any gain realized or
payment received as a result of the rescinded exercise,
payment or delivery pursuant to a Grant. Such payment shall
be made either in cash or by returning to the Company the
number of shares of Stock that the Participant received in
connection with the rescinded exercise, payment or delivery.
(d) Nonassignability.
(i) Except pursuant to Section 7(e)(iii) and except as set forth
in Section 7(d)(ii), no Grant or any other benefit under the
Plan shall be assignable or transferable, or payable to or
exercisable by, anyone other than the Participant to whom it
was granted.
(ii) Where a Participant terminates employment and retains a
Grant pursuant to Section 7(e)(ii) in order to assume a
position with a governmental, charitable or educational
institution, the Board or Committee, in its discretion and
to the extent permitted by law, may authorize a third party
(including but not limited to the trustee of a "blind"
trust), acceptable to the applicable governmental or
institutional authorities, the Participant and the Board or
Committee, to act on behalf of the Participant with regard
to such Awards.
(e) Termination of Employment. If the employment or service to the
Company of a Participant terminates, other than pursuant to any
of the following provisions under this Section 7(e), all
unexercised, deferred and unpaid Stock Awards or Restricted Stock
Purchase Offers shall be cancelled immediately, unless the Stock
Award Agreement or Restricted Stock Purchase Offer provides
otherwise:
(i) Retirement Under a Company Retirement Plan. When a
Participant's employment terminates as a result of
retirement in accordance with the terms of a Company
retirement plan, the Board or Committee may permit Stock
Awards or Restricted Stock Purchase Offers to continue in
effect beyond the date of retirement in accordance with the
applicable Grant Agreement and the exercisability and
vesting of any such Grants may be accelerated.
(ii) Rights in the Best Interests of the Company. When a
Participant resigns from the Company and, in the judgment of
the Board or Committee, the acceleration and/or continuation
of outstanding Stock Awards or Restricted Stock Purchase
Offers would be in the best interests of the Company, the
Board or Committee may (i) authorize, where appropriate, the
acceleration and/or continuation of all or any part of
Grants issued prior to such termination and (ii) permit the
exercise, vesting and payment of such Grants for such period
as may be set forth in the applicable Grant Agreement,
subject to earlier cancellation pursuant to Section 10 or at
such time as the Board or Committee shall deem the
continuation of all or any part of the Participant's Grants
are not in the Company's best interest.
(iii) Death or Disability of a Participant.
(1) In the event of a Participant's death, the Participant's estate
or beneficiaries shall have a period up to the expiration date
specified in the Grant Agreement within which to receive or
exercise any outstanding Grant held by the Participant under such
terms as may be specified in the applicable Grant Agreement.
Rights to any such outstanding Grants shall pass by will or the
laws of descent and distribution in the following order: (a) to
beneficiaries so designated by the Participant; if none, then (b)
to a legal representative of the Participant; if none, then (c)
to the persons entitled thereto as determined by a court of
competent jurisdiction. Grants so passing shall be made at such
times and in such manner as if the Participant were living.
(2) In the event a Participant is deemed by the Board or Committee to
be unable to perform his or her usual duties by reason of mental
disorder or medical condition which does not result from facts
which would be grounds for termination for cause, Grants and
rights to any such Grants may be paid to or exercised by the
Participant, if legally competent, or a committee or other
legally designated guardian or representative if the Participant
is legally incompetent by virtue of such disability.
(3) After the death or disability of a Participant, the Board or
Committee may in its sole discretion at any time (1) terminate
restrictions in Grant Agreements; (2) accelerate any or all
installments and rights; and (3) instruct the Company to pay the
total of any accelerated payments in a lump sum to the
Participant, the Participant's estate, beneficiaries or
representative -- notwithstanding that, in the absence of such
termination of restrictions or acceleration of payments, any or
all of the payments due under the Grant might ultimately have
become payable to other beneficiaries.
(4) In the event of uncertainty as to interpretation of or
controversies concerning this Section 7, the determinations of
the Board or Committee, as applicable, shall be binding and
conclusive.
8. Investment Intent. All Grants under the Plan are intended to be exempt
from registration under the Securities Act provided by Rule 701 thereunder.
Unless and until the granting of Options or sale and issuance of Stock subject
to the Plan are registered under the Securities Act or shall be exempt pursuant
to the rules promulgated thereunder, each Grant under the Plan shall provide
that the purchases or other acquisitions of Stock thereunder shall be for
investment purposes and not with a view to, or for resale in connection with,
any distribution thereof. Further, unless the issuance and sale of the Stock
have been registered under the Securities Act, each Grant shall provide that no
shares shall be purchased upon the exercise of the rights under such Grant
unless and until (i) all then applicable requirements of state and federal laws
and regulatory agencies shall have been fully complied with to the satisfaction
of the Company and its counsel, and (ii) if requested to do so by the Company,
the person exercising the rights under the Grant shall (i) give written
assurances as to knowledge and experience of such person (or a representative
employed by such person) in financial and business matters and the ability of
such person (or representative) to evaluate the merits and risks of exercising
the Option, and (ii) execute and deliver to the Company a letter of investment
intent and/or such other form related to applicable exemptions from
registration, all in such form and substance as the Company may require. If
shares are issued upon exercise of any rights under a Grant without registration
under the Securities Act, subsequent registration of such shares shall relieve
the purchaser thereof of any investment restrictions or representations made
upon the exercise of such rights.
9. Amendment, Modification, Suspension or Discontinuance of the Plan.
The Board may, insofar as permitted by law, from time to time, with respect
to any shares at the time not subject to outstanding Grants, suspend or
terminate the Plan or revise or amend it in any respect whatsoever, except
that without the approval of the shareholders of the Company, no such
revision or amendment shall (i) increase the number of shares subject to
the Plan, (ii) decrease the price at which Grants may be granted, (iii)
materially increase the benefits to Participants, or (iv) change the class
of persons eligible to receive Grants under the Plan; provided, however, no
such action shall alter or impair the rights and obligations under any
Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as
of the date thereof without the written consent of the Participant
thereunder. No Grant may be issued while the Plan is suspended or after it
is terminated, but the rights and obligations under any Grant issued while
the Plan is in effect shall not be impaired by suspension or termination of
the Plan.
In the event of any change in the outstanding Stock by reason of a
stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger, or similar event, the Board or the Committee may
adjust proportionally (a) the number of shares of Stock (i) reserved under
the Plan, (ii) available for Incentive Stock Options and Nonstatutory
Options and (iii) covered by outstanding Stock Awards or Restricted Stock
Purchase Offers; (b) the Stock prices related to outstanding Grants; and
(c) the appropriate Fair Market Value and other price determinations for
such Grants. In the event of any other change affecting the Stock or any
distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee,
including adjustments to avoid fractional shares, shall be made to give
proper effect to such event. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization
or liquidation, the Board or the Committee shall be authorized to issue or
assume stock options, whether or not in a transaction to which Section
424(a) of the Code applies, and other Grants by means of substitution of
new Grant Agreements for previously issued Grants or an assumption of
previously issued Grants.
10. Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Grant payment and withhold, at the time of delivery or exercise
of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of
shares under such Grants, an appropriate number of shares for payment of taxes
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. If
Stock is used to satisfy tax withholding, such stock shall be valued based on
the Fair Market Value when the tax withholding is required to be made.
11. Availability of Information. During the term of the Plan and any
additional period during which a Grant granted pursuant to the Plan shall be
exercisable, the Company shall make available, not later than one hundred and
twenty (120) days following the close of each of its fiscal years, such
financial and other information regarding the Company as is required by the
bylaws of the Company and applicable law to be furnished in an annual report to
the shareholders of the Company.
12. Notice. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the chief personnel officer or to
the chief executive officer of the Company, and shall become effective when it
is received by the office of the chief personnel officer or the chief executive
officer.
13. Indemnification of Board. In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the extent
allowed by applicable law, the members of the Board and the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
claim, action, suit or proceeding, or in connection with any appeal thereof, to
which they or any of them may be a party by reason of any action taken, or
failure to act, under or in connection with the Plan or any Grant granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such claim,
action, suit or proceeding, except in any case in relation to matters as to
which it shall be adjudged in such claim, action, suit or proceeding that such
Board or Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member involved
shall offer the Company, in writing, the opportunity, at its own expense, to
handle and defend the same.
14. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the State
of Nevada and construed accordingly.
15. Effective and Termination Dates. The Plan shall become effective on the
date it is approved by the holders of a majority of the shares of Stock then
outstanding. The Plan shall terminate ten years later, subject to earlier
termination by the Board pursuant to Section 9.
The foregoing 2001 Incentive Stock Plan (consisting of 38 pages, including
this page) was duly adopted and approved by the Board of Directors on April 19,
2001 and approved by the shareholders of the Corporation , 2001.
EXHIBIT A
EQUITYALERT.COM. INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made and entered
into as of the date set forth below, by and between EquityAlert.com, Inc., a
Nevada corporation (the "Company"), and the employee of the Company named in
Section 1(b). ("Optionee"): In consideration of the covenants herein set forth,
the parties hereto agree as follows:
1. Option Information.
(a) Date of Option:
(b) Optionee:
(c) Number of Shares:
(d) Exercise Price:
2. Acknowledgements.
(a) Optionee is an employee of the Company.
(b) The Board of Directors (the "Board" which term
shall include an authorized committee of the Board of Directors) and
shareholders of the Company have heretofore adopted a 2001 Incentive
Stock Plan (the "Plan"), pursuant to which this Option is being
granted.
(c) The Board has authorized the granting to Optionee
of an incentive stock option ("Option") as defined in Section 422 of
the Internal Revenue Code of 1986, as amended, (the "Code") to purchase
shares of common stock of the Company ("Stock") upon the terms and
conditions hereinafter stated and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the
"Securities Act") provided by Rule 701 thereunder.
3. Shares; Price. The Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or
other consideration as is authorized under the Plan and acceptable to the Board,
in their sole and absolute discretion) at the price per Share set forth in
Section 1(d) above (the "Exercise Price"), such price being not less than the
fair market value per share of the Shares covered by this Option as of the date
hereof (unless Optionee is the owner of Stock possessing ten percent or more of
the total voting power or value of all outstanding Stock of the Company, in
which case the Exercise Price shall be no less than 110% of the fair market
value of such Stock).
4. Term of Option; Continuation of Employment. This Option shall expire,
and all rights hereunder to purchase the Shares shall terminate 10 from the date
hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof
upon, and as of the date of, the termination of Optionee's employment if such
termination occurs prior to the end of such 10 year period. Nothing contained
herein shall confer upon Optionee the right to the continuation of his or her
employment by the Company or to interfere with the right of the Company to
terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.
5. Vesting of Option. Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable during the term of Optionee's employment in
five equal annual installments of twenty percent (20%) of the Shares covered by
this Option, the first installment to be exercisable on the first anniversary of
the date of this Option, with an additional twenty percent (20%) of such Shares
becoming exercisable on each of the four (4) successive anniversary dates. The
installments shall be cumulative (i.e., this option may be exercised, as to any
or all Shares covered by an installment, at any time or times after an
installment becomes exercisable and until expiration or termination of this
option).
6. Exercise. This Option shall be exercised by delivery to the Company of
(a) written notice of exercise stating the number of Shares being purchased (in
whole shares only) and such other information set forth on the form of Notice of
Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the
Exercise Price of the Shares covered by the notice (or such other consideration
as has been approved by the Board of Directors consistent with the Plan) and (c)
a written investment representation as provided for in Section 13 hereof. This
Option shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and shall be exercisable only by Optionee during his
or her lifetime, except as provided in Section 8 hereof.
7. Termination of Employment. If Optionee shall cease to be employed by the
Company for any reason, whether voluntarily or involuntarily, other than by his
or her death, Optionee (or if the Optionee shall die after such termination, but
prior to such exercise date, Optionee's personal representative or the person
entitled to succeed to the Option) shall have the right at any time within three
(3) months following such termination of employment or the remaining term of
this Option, whichever is the lesser, to exercise in whole or in part this
Option to the extent, but only to the extent, that this Option was exercisable
as of the date of termination of employment and had not previously been
exercised; provided, however: (i) if Optionee is permanently disabled (within
the meaning of Section 22(e)(3) of the Code) at the time of termination, the
foregoing three (3) month period shall be extended to six (6) months; or (ii) if
Optionee is terminated "for cause" as that term is defined under Section of the
Nevada Labor Code and case law related thereto, or by the terms of the Plan or
this Option Agreement or by any employment agreement between the Optionee and
the Company, this Option shall automatically terminate as to all Shares covered
by this Option not exercised prior to termination. Unless earlier terminated,
all rights under this Option shall terminate in any event on the expiration date
of this Option as defined in Section 4 hereof.
8. Death of Optionee. If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.
9. No Rights as Shareholder. Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of Shares following exercise of this Option, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificate or certificates are issued except as
provided in Section 10 hereof.
10. Recapitalization. Subject to any required action by the shareholders of
the Company, the number of Shares covered by this Option, and the Exercise Price
thereof, shall be proportionately adjusted for any increase or decrease in the
number of issued shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend, or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities of the
Company shall not be deemed having been "effected without receipt of
consideration by the Company".
In the event of a proposed dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving entity, or a
sale of all or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is determined by the
Board, which date shall be no later than the consummation of such
Reorganization. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving of such surviving entity, as applicable, which on an equitable basis
shall provide the Optionee with substantially the same economic benefit as such
unexercised Option, then the Board may grant to such Optionee, in its sole and
absolute discretion and without obligation, the right for a period commencing
thirty (30) days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during the remaining
term of the Option, whichever is the lesser, to exercise any unexpired Option or
Options without regard to the installment provisions of Section 5; provided,
however, that such exercise shall be subject to the consummation of such
Reorganization.
Subject to any required action by the shareholders of the Company, if the
Company shall be the surviving entity in any merger or consolidation, this
Option thereafter shall pertain to and apply to the securities to which a holder
of Shares equal to the Shares subject to this Option would have been entitled by
reason of such merger or consolidation, and the installment provisions of
Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all of its authorized Stock without
par value into the same number of shares of Stock with a par value, the shares
resulting from any such change shall be deemed to be the Shares within the
meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities
of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and the number and price of Shares subject to this Option shall not
be affected by, and no adjustments shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.
11. Additional Consideration. Should the Internal Revenue Service determine
that the Exercise Price established by the Board as the fair market value per
Share is less than the fair market value per Share as of the date of Option
grant, Optionee hereby agrees to tender such additional consideration, or agrees
to tender upon exercise of all or a portion of this Option, such fair market
value per Share as is determined by the Internal Revenue Service.
12. Modification, Extension and Renewal of Options. The Board or Committee,
as described in the Plan, may modify, extend or renew this Option or accept the
surrender thereof (to the extent not theretofore exercised) and authorize the
granting of a new option in substitution therefore (to the extent not
theretofore exercised), subject at all times to the Plan, and Section 422 of the
Code. Notwithstanding the foregoing provisions of this Section 12, no
modification shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights of Optionee hereunder.
13. Investment Intent; Restrictions on Transfer.
(a) Optionee represents and agrees that if Optionee exercises this
Option in whole or in part, Optionee will in each case acquire
the Shares upon such exercise for the purpose of investment and
not with a view to, or for resale in connection with, any
distribution thereof; and that upon such exercise of this Option
in whole or in part, Optionee (or any person or persons entitled
to exercise this Option under the provisions of Sections 7 and 8
hereof) shall furnish to the Company a written statement to such
effect, satisfactory to the Company in form and substance. If the
Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this
Option in whole or in part, the Optionee shall be relieved of the
foregoing investment representation and agreement and shall not
be required to furnish the Company with the foregoing written
statement.
(b) Optionee further represents that Optionee has had access to the
financial statements or books and records of the Company, has had
the opportunity to ask questions of the Company concerning its
business, operations and financial condition, and to obtain
additional information reasonably necessary to verify the
accuracy of such information
(c) Unless and until the Shares represented by this Option are
registered under the Securities Act, all certificates
representing the Shares and any certificates subsequently issued
in substitution therefor and any certificate for any securities
issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in
substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED
UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER
THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY
STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED
____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS
THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY
THE COMPANY UNDER CERTAIN CONDITIONS.
such other legend or legends as the Company and its counsel deem
necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company's
transfer agent.
14. Effects of Early Disposition. Optionee understands that if an Optionee
disposes of shares acquired hereunder within two (2) years after the date of
this Option or within one (1) year after the date of issuance of such shares to
Optionee, such Optionee will be treated for income tax purposes as having
received ordinary income at the time of such disposition of an amount generally
measured by the difference between the purchase price and the fair market value
of such stock on the date of exercise, subject to adjustment for any tax
previously paid, in addition to any tax on the difference between the sales
price and Optionee's adjusted cost basis in such shares. The foregoing amount
may be measured differently if Optionee is an officer, director or ten percent
holder of the Company. Optionee agrees to notify the Company within ten (10)
working days of any such disposition.
15. Stand-off Agreement. Optionee agrees that in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such offering.
16. Restriction Upon Transfer. The Shares may not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated by the
Optionee except as hereinafter provided.
(a) Repurchase Right on Termination Other Than for Cause. For the
purposes of this Section, a "Repurchase Event" shall mean an
occurrence of one of (i) termination of Optionee's employment by
the Company, voluntary or involuntary and with or without cause;
(ii) retirement or death of Optionee; (iii) bankruptcy of
Optionee, which shall be deemed to have occurred as of the date
on which a voluntary or involuntary petition in bankruptcy is
filed with a court of competent jurisdiction; (iv) dissolution of
the marriage of Optionee, to the extent that any of the Shares
are allocated as the sole and separate property of Optionee's
spouse pursuant thereto (in which case this Section shall only
apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation
of this Agreement. Upon the occurrence of a Repurchase Event, the
Company shall have the right (but not an obligation) to
repurchase all or any portion of the Shares of Optionee at a
price equal to the fair value of the Shares as of the date of the
Repurchase Event.
(b) Repurchase Right on Termination for Cause. In the event
Optionee's employment is terminated by the Company "for cause",
then the Company shall have the right (but not an obligation) to
repurchase Shares of Optionee at a price equal to the Exercise
Price. Such right of the Company to repurchase Shares shall apply
to 100% of the Shares for one (1) year from the date of this
Agreement; and shall thereafter lapse at the rate of twenty
percent (20%) of the Shares on each anniversary of the date of
this Agreement. In addition, the Company shall have the right, in
the sole discretion of the Board and without obligation, to
repurchase upon termination for cause all or any portion of the
Shares of Optionee, at a price equal to the fair value of the
Shares as of the date of termination, which right is not subject
to the foregoing lapsing of rights. In the event the Company
elects to repurchase the Shares, the stock certificates
representing the same shall forthwith be returned to the Company
for cancellation.
(c) Exercise of Repurchase Right. Any Repurchase Right under
Paragraphs 16(a) or 16(b) shall be exercised by giving notice of
exercise as provided herein to Optionee or the estate of
Optionee, as applicable. Such right shall be exercised, and the
repurchase price thereunder shall be paid, by the Company within
a ninety (90) day period beginning on the date of notice to the
Company of the occurrence of such Repurchase Event (except in the
case of termination of employment or retirement, where such
option period shall begin upon the occurrence of the Repurchase
Event). Such repurchase price shall be payable only in the form
of cash (including a check drafted on immediately available
funds) or cancellation of purchase money indebtedness of the
Optionee for the Shares. If the Company can not purchase all such
Shares because it is unable to meet the financial tests set forth
in Nevada corporation law, the Company shall have the right to
purchase as many Shares as it is permitted to purchase under such
sections. Any Shares not purchased by the Company hereunder shall
no longer be subject to the provisions of this Section 16.
(d) Right of First Refusal. In the event Optionee desires to transfer
any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the
Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase
price and terms of payment, and grant the Company an option for a
period of thirty days following receipt of such notice to
purchase the offered Shares upon the same terms and conditions.
To exercise such option, the Company shall give notice of that
fact to Optionee within the thirty (30) day notice period and
agree to pay the purchase price in the manner provided in the
notice. If the Company does not purchase all of the Shares so
offered during foregoing option period, Optionee shall be under
no obligation to sell any of the offered Shares to the Company,
but may dispose of such Shares in any lawful manner during a
period of one hundred and eighty (180) days following the end of
such notice period, except that Optionee shall not sell any such
Shares to any other person at a lower price or upon more
favorable terms than those offered to the Company.
(e) Acceptance of Restrictions. Acceptance of the Shares shall
constitute the Optionee's agreement to such restrictions and the
legending of his certificates with respect thereto.
Notwithstanding such restrictions, however, so long as the
Optionee is the holder of the Shares, or any portion thereof, he
shall be entitled to receive all dividends declared on and to
vote the Shares and to all other rights of a shareholder with
respect thereto.
(f) Permitted Transfers. Notwithstanding any provisions in this
Section 16 to the contrary, the Optionee may transfer Shares
subject to this Agreement to his or her parents, spouse,
children, or grandchildren, or a trust for the benefit of the
Optionee or any such transferee(s); provided, that such permitted
transferee(s) shall hold the Shares subject to all the provisions
of this Agreement (all references to the Optionee herein shall in
such cases refer mutatis mutandis to the permitted transferee,
except in the case of clause (iv) of Section 16(a) wherein the
permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this
Agreement, a permitted transferee may not, in turn, make
permitted transfers without the written consent of the Optionee
and the Company.
(g) Release of Restrictions on Shares. All other restrictions under
this Section 16 shall terminate five (5) years following the date
of this Agreement, or when the Company's securities are publicly
traded, whichever occurs earlier.
17. Notices. Any notice required to be given pursuant to this Option or the
Plan shall be in writing and shall be deemed to be delivered upon receipt or, in
the case of notices by the Company, five (5) days after deposit in the U.S.
mail, postage prepaid, addressed to Optionee at the address last provided to the
Company by Optionee for his or her employee records.
18. Agreement Subject to Plan; Applicable Law. This Option is made pursuant
to the Plan and shall be interpreted to comply therewith. A copy of such Plan is
available to Optionee, at no charge, at the principal office of the Company. Any
provision of this Option inconsistent with the Plan shall be considered void and
replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Nevada, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the
date first above written.
EQUITYALERT.COM, INC.
By: ______________________
(one of the following, as appropriate, shall be signed)
I certify that as of the date By his or her signature, the
hereof I am unmarried spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing INCENTIVE STOCK
OPTION AGREEMENT
- ----------------------------- --------------------------------
Optionee Spouse of Optionee
Appendix A
NOTICE OF EXERCISE
EquityAlert.com, Inc.
Re: Incentive Stock Option
Notice is hereby given pursuant to Section 6 of my Incentive Stock Option
Agreement that I elect to purchase the number of shares set forth below at the
exercise price set forth in my option agreement:
Incentive Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being purchased
is attached.
I hereby confirm that such shares are being acquired by me for my own
account for investment purposes, and not with a view to, or for resale in
connection with, any distribution thereof. I will not sell or dispose of my
Shares in violation of the Securities Act of 1933, as amended, or any applicable
federal or state securities laws. Further, I understand that the exemption from
taxable income at the time of exercise is dependent upon my holding such stock
for a period of at least one year from the date of exercise and two years from
the date of grant of the Option.
I understand that the certificate representing the Option Shares will bear
a restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.
I agree to provide to the Company such additional documents or information
as may be required pursuant to the Company's 2001 Incentive Stock Plan.
- ------------
(signature)
EXHIBIT B-1
EQUITYALERT.COM, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement") is made and entered
into as of the date set forth below, by and between EquityAlert.com, Inc, a
Nevada corporation (the "Company"), and the following employee of the Company
("Optionee"):
In consideration of the covenants herein set forth, the parties hereto
agree as follows:
1. Option Information.
-------------------
(a) Date of Option:
(b) Optionee:
(c) Number of Shares:
(d) Exercise Price:
2. Acknowledgements.
-----------------
(a) Optionee is an employee of the Company.
(b) The Board of Directors (the "Board" which term shall
include an authorized committee of the Board of Directors) and
shareholders of the Company have heretofore adopted a 2001 Incentive
Stock Plan (the "Plan"), pursuant to which this Option is being
granted; and
(c) The Board has authorized the granting to Optionee of a
nonstatutory stock option ("Option") to purchase shares of common stock
of the Company ("Stock") upon the terms and conditions hereinafter
stated and pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act") provided by
Rule 701 thereunder.
3. Shares; Price. Company hereby grants to Optionee the right to purchase,
upon and subject to the terms and conditions herein stated, the number of shares
of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board of
Directors of the Company, in their sole and absolute discretion) at the price
per Share set forth in Section 1(d) above (the "Exercise Price"), such price
being not less than [e.g., 85%] of the fair market value per share of the Shares
covered by this Option as of the date hereof.
4. Term of Option; Continuation of Service. This Option shall expire, and
all rights hereunder to purchase the Shares shall terminate 10 years from the
date hereof. This Option shall earlier terminate subject o Sections 7 and 8
hereof upon, and as of the date of, the termination of Optionee's employment if
such termination occurs prior to the end of such 10 year period. Nothing
contained herein shall confer upon Optionee the right to the continuation of his
or her employment by the Company or to interfere with the right of the Company
to terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.
5. Vesting of Option. Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable during the term of Optionee's employment in
five equal annual installments of twenty percent (20%) of the Shares covered by
this Option, the first installment to be exercisable on the first anniversary of
the date of this Option, with an additional twenty percent (20%) of such Shares
becoming exercisable on each of the four (4) successive anniversary dates. The
installments shall be cumulative (i.e., this option may be exercised, as to any
or all shares covered by an installment, at any time or times after an
installment becomes exercisable and until expiration or termination of this
option).
6. Exercise. This Option shall be exercised by delivery to the Company of
(a) written notice of exercise stating the number of Shares being purchased (in
whole shares only) and such other information set forth on the form of Notice of
Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the
Exercise Price of the Shares covered by the notice (or such other consideration
as has been approved by the Board of Directors consistent with the Plan) and (c)
a written investment representation as provided for in Section 13 hereof. This
Option shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and shall be exercisable only by Optionee during his
or her lifetime, except as provided in Section 8 hereof.
7. Termination of Employment. If Optionee shall cease to be employed by the
Company for any reason, whether voluntarily or involuntarily, other than by his
or her death, Optionee (or if the Optionee shall die after such termination, but
prior to such exercise date, Optionee's personal representative or the person
entitled to succeed to the Option) shall have the right at any time within three
(3) months following such termination of employment or the remaining term of
this Option, whichever is the lesser, to exercise in whole or in part this
Option to the extent, but only to the extent, that this Option was exercisable
as of the date of termination of employment and had not previously been
exercised; provided, however: (i) if Optionee is permanently disabled (within
the meaning of Section 22(e)(3) of the Code) at the time of termination, the
foregoing three (3) month period shall be extended to six (6) months; or (ii) if
Optionee is terminated "for cause" as that term is defined under Section ____ of
the Nevada Labor Code and case law related thereto, or by the terms of the Plan
or this Option Agreement or by any employment agreement between the Optionee and
the Company, this Option shall automatically terminate as to all Shares covered
by this Option not exercised prior to termination.
Unless earlier terminated, all rights under this Option shall terminate in
any event on the expiration date of this Option as defined in Section 4 hereof.
8. Death of Optionee. If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.
9. No Rights as Shareholder. Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.
10. Recapitalization. Subject to any required action by the shareholders of
the Company, the number of Shares covered by this Option, and the Exercise Price
thereof, shall be proportionately adjusted for any increase or decrease in the
number of issued shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend, or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities of the
Company shall not be deemed having been "effected without receipt of
consideration by the Company".
In the event of a proposed dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving entity, or a
sale of all or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), unless otherwise provided by the Board, this
Option shall terminate immediately prior to such date as is determined by the
Board, which date shall be no later than the consummation of such
Reorganization. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving of such surviving entity, as applicable, which on an equitable basis
shall provide the Optionee with substantially the same economic benefit as such
unexercised Option, then the Board may grant to such Optionee, in its sole and
absolute discretion and without obligation, the right for a period commencing
thirty (30) days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during the remaining
term of the Option, whichever is the lesser, to exercise any unexpired Option or
Options without regard to the installment provisions of Section 5; provided,
however, that such exercise shall be subject to the consummation of such
Reorganization.
Subject to any required action by the shareholders of the Company, if the
Company shall be the surviving entity in any merger or consolidation, this
Option thereafter shall pertain to and apply to the securities to which a holder
of Shares equal to the Shares subject to this Option would have been entitled by
reason of such merger or consolidation, and the installment provisions of
Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all of its authorized Stock without
par value into the same number of shares of Stock with a par value, the shares
resulting from any such change shall be deemed to be the Shares within the
meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities
of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and the number and price of Shares subject to this Option shall not
be affected by, and no adjustments shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.
11. Taxation upon Exercise of Option. Optionee understands that, upon
exercise of this Option, Optionee will recognize income, for Federal and state
income tax purposes, in an amount equal to the amount by which the fair market
value of the Shares, determined as of the date of exercise, exceeds the Exercise
Price. The acceptance of the Shares by Optionee shall constitute an agreement by
Optionee to report such income in accordance with then applicable law and to
cooperate with Company in establishing the amount of such income and
corresponding deduction to the Company for its income tax purposes. Withholding
for federal or state income and employment tax purposes will be made, if and as
required by law, from Optionee's then current compensation, or, if such current
compensation is insufficient to satisfy withholding tax liability, the Company
may require Optionee to make a cash payment to cover such liability as a
condition of the exercise of this Option.
12. Modification, Extension and Renewal of Options. The Board or Committee,
as described in the Plan, may modify, extend or renew this Option or accept the
surrender thereof (to the extent not theretofore exercised) and authorize the
granting of a new option in substitution therefore (to the extent not
theretofore exercised), subject at all times to the Plan, the Code and the
corporate securities rules of Nevada. Notwithstanding the foregoing provisions
of this Section 12, no modification shall, without the consent of the Optionee,
alter to the Optionee's detriment or impair any rights of Optionee hereunder.
13. Investment Intent; Restrictions on Transfer.
(a) Optionee represents and agrees that if Optionee exercises this
Option in whole or in part, Optionee will in each case acquire
the Shares upon such exercise for the purpose of investment and
not with a view to, or for resale in connection with, any
distribution thereof; and that upon such exercise of this Option
in whole or in part, Optionee (or any person or persons entitled
to exercise this Option under the provisions of Sections 7 and 8
hereof) shall furnish to the Company a written statement to such
effect, satisfactory to the Company in form and substance. If the
Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this
Option in whole or in part, the Optionee shall be relieved of the
foregoing investment representation and agreement and shall not
be required to furnish the Company with the foregoing written
statement.
(b) Optionee further represents that Optionee has had access to the
financial statements or books and records of the Company, has had
the opportunity to ask questions of the Company concerning its
business, operations and financial condition, and to obtain
additional information reasonably necessary to verify the
accuracy of such information
(c) Unless and until the Shares represented by this Option are
registered under the Securities Act, all certificates
representing the Shares and any certificates subsequently issued
in substitution therefor and any certificate for any securities
issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in
substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED
UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER
THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY
STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT
DATED ____________ BETWEEN THE COMPANY AND THE ISSUEE WHICH
RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO
REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its
counsel deem necessary or appropriate. Appropriate stop transfer
instructions with respect to the Shares have been placed with the
Company's transfer agent.
14. Stand-off Agreement. Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such offering.
15. Restriction Upon Transfer. The Shares may not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated by the
Optionee except as hereinafter provided.
(a) Repurchase Right on Termination Other Than for Cause. For the
purposes of this Section, a "Repurchase Event" shall mean an
occurrence of one of (i) termination of Optionee's employment by
the Company, voluntary or involuntary and with or without cause;
(ii) retirement or death of Optionee; (iii) bankruptcy of
Optionee, which shall be deemed to have occurred as of the date
on which a voluntary or involuntary petition in bankruptcy is
filed with a court of competent jurisdiction; (iv) dissolution of
the marriage of Optionee, to the extent that any of the Shares
are allocated as the sole and separate property of Optionee's
spouse pursuant thereto (in which case, this Section shall only
apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation
of this Agreement. Upon the occurrence of a Repurchase Event, the
Company shall have the right (but not an obligation) to
repurchase all or any portion of the Shares of Optionee at a
price equal to the fair value of the Shares as of the date of the
Repurchase Event.
(b) Repurchase Right on Termination for Cause. In the event
Optionee's employment is terminated by the Company "for cause",
then the Company shall have the right (but not an obligation) to
repurchase Shares of Optionee at a price equal to the Exercise
Price. Such right of the Company to repurchase Shares shall apply
to 100% of the Shares for one (1) year from the date of this
Agreement; and shall thereafter lapse at the rate of twenty
percent (20%) of the Shares on each anniversary of the date of
this Agreement. In addition, the Company shall have the right, in
the sole discretion of the Board and without obligation, to
repurchase upon termination for cause all or any portion of the
Shares of Optionee, at a price equal to the fair value of the
Shares as of the date of termination, which right is not subject
to the foregoing lapsing of rights. In the event the Company
elects to repurchase the Shares, the stock certificates
representing the same shall forthwith be returned to the Company
for cancellation.
(c) Exercise of Repurchase Right. Any Repurchase Right under
Paragraphs 15(a) or 15(b) shall be exercised by giving notice of
exercise as provided herein to Optionee or the estate of
Optionee, as applicable. Such right shall be exercised, and the
repurchase price thereunder shall be paid, by the Company within
a ninety (90) day period beginning on the date of notice to the
Company of the occurrence of such Repurchase Event (except in the
case of termination of employment or retirement, where such
option period shall begin upon the occurrence of the Repurchase
Event). Such repurchase price shall be payable only in the form
of cash (including a check drafted on immediately available
funds) or cancellation of purchase money indebtedness of the
Optionee for the Shares. If the Company can not purchase all such
Shares because it is unable to meet the financial tests set forth
in the Nevada corporation law, the Company shall have the right
to purchase as many Shares as it is permitted to purchase under
such sections. Any Shares not purchased by the Company hereunder
shall no longer be subject to the provisions of this Section 15.
(d) Right of First Refusal. In the event Optionee desires to transfer
any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the
Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase
price and terms of payment, and grant the Company an option for a
period of thirty days following receipt of such notice to
purchase the offered Shares upon the same terms and conditions.
To exercise such option, the Company shall give notice of that
fact to Optionee within the thirty (30) day notice period and
agree to pay the purchase price in the manner provided in the
notice. If the Company does not purchase all of the Shares so
offered during foregoing option period, Optionee shall be under
no obligation to sell any of the offered Shares to the Company,
but may dispose of such Shares in any lawful manner during a
period of one hundred and eighty (180) days following the end of
such notice period, except that Optionee shall not sell any such
Shares to any other person at a lower price or upon more
favorable terms than those offered to the Company.
(e) Acceptance of Restrictions. Acceptance of the Shares shall
constitute the Optionee's agreement to such restrictions and the
legending of his certificates with respect thereto.
Notwithstanding such restrictions, however, so long as the
Optionee is the holder of the Shares, or any portion thereof, he
shall be entitled to receive all dividends declared on and to
vote the Shares and to all other rights of a shareholder with
respect thereto.
(f) Permitted Transfers. Notwithstanding any provisions in this
Section 15 to the contrary, the Optionee may transfer Shares
subject to this Agreement to his or her parents, spouse,
children, or grandchildren, or a trust for the benefit of the
Optionee or any such transferee(s); provided, that such permitted
transferee(s) shall hold the Shares subject to all the provisions
of this Agreement (all references to the Optionee herein shall in
such cases refer mutatis mutandis to the permitted transferee,
except in the case of clause (iv) of Section 15(a) wherein the
permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this
Agreement, a permitted transferee may not, in turn, make
permitted transfers without the written consent of the Optionee
and the Company.
(g) Release of Restrictions on Shares. All other restrictions under
this Section 15 shall terminate five (5) years following the date
of this Agreement, or when the Company's securities are publicly
traded, whichever occurs earlier.
16. Notices. Any notice required to be given pursuant to this Option or the
Plan shall be in writing and shall be deemed to be delivered upon receipt or, in
the case of notices by the Company, five (5) days after deposit in the U.S.
mail, postage prepaid, addressed to Optionee at the address last provided by
Optionee for his or her employee records.
17. Agreement Subject to Plan; Applicable Law. This Option is made pursuant
to the Plan and shall be interpreted to comply therewith. A copy of such Plan is
available to Optionee, at no charge, at the principal office of the Company. Any
provision of this Option inconsistent with the Plan shall be considered void and
replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Nevada, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the
date first above written.
EQUITYALERT.COM, INC.
By: ______________________
--------------------------
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date By his or her signature, the
hereof I am unmarried spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing NONSTATUTORY STOCK
OPTION AGREEMENT
- ---------------------------- --------------------------------
Optionee Spouse of Optionee
Appendix A
NOTICE OF EXERCISE
EquityAlert.com, Inc.
Re: Nonstatutory Stock Option
Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock
Option Agreement that I elect to purchase the number of shares set forth below
at the exercise price set forth in my option agreement:
Nonstatutory Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being
purchased is attached.
I hereby confirm that such shares are being acquired by me for my own
account for investment purposes, and not with a view to, or for resale in
connection with, any distribution thereof. I will not sell or dispose of my
Shares in violation of the Securities Act of 1933, as amended, or any applicable
federal or state securities laws.
I understand that the certificate representing the Option Shares will
bear a restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.
Further, I understand that, as a result of this exercise of rights, I
will recognize income in an amount equal to the amount by which the fair market
value of the Shares exceeds the exercise price. I agree to report such income in
accordance with then applicable law and to cooperate with Company in
establishing the withholding and corresponding deduction to the Company for its
income tax purposes.
I agree to provide to the Company such additional documents or
information as may be required pursuant to the Company's 2001 Incentive Stock
Plan.
EXHIBIT B-3
EQUITYALERT.COM, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement") is made and entered
into as of the date set forth below, by and between EquityAlert.com, Inc., a
Nevada corporation (the "Company"), and the following consultant to the Company
(herein, the "Optionee"):
In consideration of the covenants herein set forth, the parties hereto
agree as follows:
1. Option Information.
-------------------
(a) Date of Option:
(b) Optionee:
(c) Number of Shares:
(d) Exercise Price:
2. Acknowledgements.
-----------------
(a) Optionee is an independent consultant to the Company, not
an employee;
(b) The Board of Directors (the "Board" which term shall
include an authorized committee of the Board of Directors) and
shareholders of the Company have heretofore adopted a 2001 Incentive
Stock Plan (the "Plan"), pursuant to which this Option is being
granted; and
(c) The Board has authorized the granting to Optionee of a
nonstatutory stock option ("Option") to purchase shares of common stock
of the Company ("Stock") upon the terms and conditions hereinafter
stated and pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act") provided by
Rule 701 thereunder.
3. Shares; Price. The Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or
other consideration as is authorized under the Plan and acceptable to the Board,
in their sole and absolute discretion) at the price per Share set forth in
Section 1(d) above (the "Exercise Price"), such price being not less than [e.g.
85%] of the fair market value per share of the Shares covered by this Option as
of the date hereof.
4. Term of Option. This Option shall expire, and all rights hereunder to
purchase the Shares, shall terminate 10 years from the date hereof. Nothing
contained herein shall be construed to interfere in any way with the right of
the Company to terminate Optionee as a consultant to the Company, or to increase
or decrease the compensation paid to Optionee from the rate in effect as of the
date hereof.
5. Vesting of Option. Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable during the period that Optionee serves as a
consultant of the Company in equal annual installments, each installment
covering a fraction of the Shares, the numerator of which is one (1) and the
denominator of which is the number of years in the term of this Option (not to
exceed 5). The first installment shall become exercisable on the first
anniversary of the date of this Option, and an additional installment shall
become exercisable on each successive anniversary date during the term of this
Option, except the last such anniversary date. The final installment shall
become exercisable ninety days prior to the expiration of the term of this
Option. The installments shall be cumulative (i.e., this option may be
exercised, as to any or all shares covered by an installment, at any time or
times after an installment becomes exercisable and until expiration or
termination of this option).
6. Exercise. This Option shall be exercised by delivery to the Company of
(a) written notice of exercise stating the number of Shares being purchased (in
whole shares only) and such other information set forth on the form of Notice of
Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the
Exercise Price of the Shares covered by the notice (or such other consideration
as has been approved by the Board of Directors consistent with the Plan) and (c)
a written investment representation as provided for in Section 13 hereof. This
Option shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and shall be exercisable only by Optionee during his
or her lifetime.
7. Termination of Service. If Optionee's service as a consultant to the
Company terminates for any reason, no further installments shall vest pursuant
to Section 5, and Optionee shall have the right at any time within thirty (30)
days following such termination of services or the remaining term of this
Option, whichever is the lesser, to exercise in whole or in part this Option to
the extent, but only to the extent, that this Option was exercisable as of the
date Optionee ceased to be a consultant to the Company; provided, however, if
Optionee is terminated for reasons that would justify a termination of
employment "for cause" as contemplated by Section ______ of the Nevada Labor
Code and case law related thereto, the foregoing right to exercise shall
automatically terminate on the date Optionee ceases to be a consultant to the
Company as to all Shares covered by this Option not exercised prior to
termination. Unless earlier terminated, all rights under this Option shall
terminate in any event on the expiration date of this Option as defined in
Section 4 hereof.
8. Death of Optionee. If the Optionee shall die while serving as a
consultant to the Company, Optionee's personal representative or the person
entitled to Optionee's rights hereunder may at any time within ninety (90) days
after the date of Optionee's death, or during the remaining term of this Option,
whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the
date of Optionee's death; provided, in any case, that this Option may be so
exercised only to the extent that this Option has not previously been exercised
by Optionee.
9. No Rights as Shareholder. Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of the issuance of shares following exercise of this to Option,
and no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificate or certificates are
issued except as provided in Section 10 hereof.
10. Recapitalization. Subject to any required action by the shareholders of
the Company, the number of Shares covered by this Option, and the Exercise Price
thereof, shall be proportionately adjusted for any increase or decrease in the
number of issued shares resulting from a subdivision or consolidation of shares
or the payment of a stock dividend, or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities of the
Company shall not be deemed having been "effected without receipt of
consideration by the Company."
In the event of a proposed dissolution or liquidation of the Company, a
merger or consolidation in which the Company is not the surviving entity, or a
sale of all or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), this Option shall terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board; provided, however, if Optionee shall be a consultant at the time such
Reorganization is approved by the stockholders, Optionee shall have the right to
exercise this Option as to all or any part of the Shares, without regard to the
installment provisions of Section 5, for a period beginning 30 days prior to the
consummation of such Reorganization and ending as of the Reorganization or the
expiration of this Option, whichever is earlier, subject to the consummation of
the Reorganization. In any event, the Company shall notify Optionee, at least 30
days prior to the consummation of such Reorganization, of his exercise rights,
if any, and that the Option shall terminate upon the consummation of the
Reorganization.
Subject to any required action by the shareholders of the Company, if the
Company shall be the surviving entity in any merger or consolidation, this
Option thereafter shall pertain to and apply to the securities to which a holder
of Shares equal to the Shares subject to this Option would have been entitled by
reason of such merger or consolidation, and the installment provisions of
Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all of its authorized Stock without
par value into the same number of shares of Stock with a par value, the shares
resulting from any such change shall be deemed to be the Shares within the
meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities
of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and the number and price of Shares subject to this Option shall not
be affected by, and no adjustments shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.
11. Taxation upon Exercise of Option. Optionee understands that, upon
exercise of this Option, Optionee will recognize income, for Federal and state
income tax purposes, in an amount equal to the amount by which the fair market
value of the Shares, determined as of the date of exercise, exceeds the Exercise
Price. The acceptance of the Shares by Optionee shall constitute an agreement by
Optionee to report such income in accordance with then applicable law and to
cooperate with Company in establishing the amount of such income and
corresponding deduction to the Company for its income tax purposes. Withholding
for federal or state income and employment tax purposes will be made, if and as
required by law, from Optionee's then current compensation, or, if such current
compensation is insufficient to satisfy withholding tax liability, the Company
may require Optionee to make a cash payment to cover such liability as a
condition of the exercise of this Option.
12. Modification, Extension and Renewal of Options. The Board or Committee,
as described in the Plan, may modify, extend or renew this Option or accept the
surrender thereof (to the extent not theretofore exercised) and authorize the
granting of a new option in substitution therefore (to the extent not
theretofore exercised), subject at all times to the Plan, the Code.
Notwithstanding the foregoing provisions of this Section 12, no modification
shall, without the consent of the Optionee, alter to the Optionee's detriment or
impair any rights of Optionee hereunder.
13. Investment Intent; Restrictions on Transfer.
(a) Optionee represents and agrees that if Optionee exercises this
Option in whole or in part, Optionee will in each case acquire
the Shares upon such exercise for the purpose of investment and
not with a view to, or for resale in connection with, any
distribution thereof; and that upon such exercise of this Option
in whole or in part, Optionee (or any person or persons entitled
to exercise this Option under the provisions of Sections 7 and 8
hereof) shall furnish to the Company a written statement to such
effect, satisfactory to the Company in form and substance. If the
Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this
Option in whole or in part, the Optionee shall be relieved of the
foregoing investment representation and agreement and shall not
be required to furnish the Company with the foregoing written
statement.
(b) Optionee further represents that Optionee has had access to the
financial statements or books and records of the Company, has had
the opportunity to ask questions of the Company concerning its
business, operations and financial condition, and to obtain
additional information reasonably necessary to verify the
accuracy of such information.
(c) Unless and until the Shares represented by this Option are
registered under the Securities Act, all certificates
representing the Shares and any certificates subsequently issued
in substitution therefor and any certificate for any securities
issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in
substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED
UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER
THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY
STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT
DATED ___________ BETWEEN THE COMPANY AND THE ISSUEE WHICH
RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO
REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its
counsel deem necessary or appropriate. Appropriate stop transfer
instructions with respect to the Shares have been placed with the
Company's transfer agent.
14. Stand-off Agreement. Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of up to one
year following the effective date of registration of such offering.
15. Restriction Upon Transfer. The Shares may not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated by the
Optionee except as hereinafter provided.
(a) Repurchase Right on Termination Other Than for Cause. For the
purposes of this Section, a "Repurchase Event" shall mean an
occurrence of one of (i) termination of Optionee's service as a
consultant, voluntary or involuntary and with or without cause;
(ii) retirement or death of Optionee; (iii) bankruptcy of
Optionee, which shall be deemed to have occurred as of the date
on which a voluntary or involuntary petition in bankruptcy is
filed with a court of competent jurisdiction; (iv) dissolution of
the marriage of Optionee, to the extent that any of the Shares
are allocated as the sole and separate property of Optionee's
spouse pursuant thereto (in which case, this Section shall only
apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation
of this Agreement. Upon the occurrence of a Repurchase Event, the
Company shall have the right (but not an obligation) to
repurchase all or any portion of the Shares of 140.50 of the
Rules of the Optionee at a price equal to the fair value of the
Shares as of the date of the Repurchase Event.
(b) Repurchase Right on Termination for Cause. In the event
Optionee's service as a consultant is terminated by the Company
"for cause" (as contemplated by Section 7), then the Company
shall have the right (but not an obligation) to repurchase Shares
of Optionee at a price equal to the Exercise Price. Such right of
the Company to repurchase Shares shall apply to 100% of the
Shares for one (1) year from the date of this Agreement; and
shall thereafter lapse ratably in equal annual increments on each
anniversary of the date of this Agreement over the term of this
Option specified in Section 4. In addition, the Company shall
have the right, in the sole discretion of the Board and without
obligation, to repurchase upon any such termination of service
for cause all or any portion of the Shares of Optionee, at a
price equal to the fair value of the Shares as of the date of
termination, which right is not subject to the foregoing lapsing
of rights. In the event the Company elects to repurchase the
Shares, the stock certificates representing the same shall
forthwith be returned to the Company for cancellation.
(c) Exercise of Repurchase Right. Any repurchase right under
Paragraphs 15(a) or 15(b) shall be exercised by giving notice of
exercise as provided herein to Optionee or the estate of
Optionee, as applicable. Such right shall be exercised, and the
repurchase price thereunder shall be paid, by the Company within
a ninety (90) day period beginning on the date of notice to the
Company of the occurrence of such Repurchase Event (except in the
case of termination of employment or retirement, where such
option period shall begin upon the occurrence of the Repurchase
Event). Such repurchase price shall be payable only in the form
of cash (including a check drafted on immediately available
funds) or cancellation of purchase money indebtedness of the
Optionee for the Shares. If the Company can not purchase all such
Shares because it is unable to meet the financial tests set forth
in the Nevada corporation law, the Company shall have the right
to purchase as many Shares as it is permitted to purchase under
such sections. Any Shares not purchased by the Company hereunder
shall no longer be subject to the provisions of this Section 15.
(d) Right of First Refusal. In the event Optionee desires to transfer
any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the
Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase
price and terms of payment, and grant the Company an option for a
period of thirty days following receipt of such notice to
purchase the offered Shares upon the same terms and conditions.
To exercise such option, the Company shall give notice of that
fact to Optionee within the thirty (30) day notice period and
agree to pay the purchase price in the manner provided in the
notice. If the Company does not purchase all of the Shares so
offered during foregoing option period, Optionee shall be under
no obligation to sell any of the offered Shares to the Company,
but may dispose of such Shares in any lawful manner during a
period of one hundred and eighty (180) days following the end of
such notice period, except that Optionee shall not sell any such
Shares to any other person at a lower price or upon more
favorable terms than those offered to the Company.
(e) Acceptance of Restrictions. Acceptance of the Shares shall
constitute the Optionee's agreement to such restrictions and the
legending of his certificates with respect thereto.
Notwithstanding such restrictions, however, so long as the
Optionee is the holder of the Shares, or any portion thereof, he
shall be entitled to receive all dividends declared on and to
vote the Shares and to all other rights of a shareholder with
respect thereto.
(f) Permitted Transfers. Notwithstanding any provisions in this
Section 15 to the contrary, the Optionee may transfer Shares
subject to this Agreement to his or her parents, spouse,
children, or grandchildren, or a trust for the benefit of the
Optionee or any such transferee(s); provided, that such permitted
transferee(s) shall hold the Shares subject to all the provisions
of this Agreement (all references to the Optionee herein shall in
such cases refer mutatis mutandis to the permitted transferee,
except in the case of clause (iv) of Section 15(a) wherein the
permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this
Agreement, a permitted transferee may not, in turn, make
permitted transfers without the written consent of the Optionee
and the Company.
(g) Release of Restrictions on Shares. All rights and restrictions
under this Section 15 shall terminate five (5) years following
the date of this Agreement, or when the Company's securities are
publicly traded, whichever occurs earlier.
16. Notices. Any notice required to be given pursuant to this Option or the
Plan shall be in writing and shall be deemed to be delivered upon receipt or, in
the case of notices by the Company, five (5) days after deposit in the U.S.
mail, postage prepaid, addressed to Optionee at the address last provided by
Optionee for use in Company records related to Optionee.
17. Agreement Subject to Plan; Applicable Law. This Option is made pursuant
to the Plan and shall be interpreted to comply therewith. A copy of such Plan is
available to Optionee, at no charge, at the principal office of the Company. Any
provision of this Option inconsistent with the Plan shall be considered void and
replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Nevada, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the
date first above written.
EquityAlert.com, Inc.
By: ______________________
--------------------------
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date By his or her signature, the
hereof I am unmarried spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing RESTRICTED STOCK
PURCHASE AGREEMENT
- ---------------------------- --------------------------------
Optionee Spouse of Optionee