1997 INCENTIVE STOCK OPTION PLAN AND 1997
NONSTATUTORY STOCK OPTION PLAN
1. Names and Purposes of the Plans. This Plan document is intended to
implement and govern two separate Stock Option Plans of DYNAMIC ASSOCIATES,
INC., a Nevada corporation (the "Company"): the 1997 Incentive Stock Option
Plan ("Plan A") and the 1997 Nonstatutory Stock Option Plan ("Plan B")
(collectively the "Plans"). Plan A provides for the granting of options that
are intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422(b) of the Internal Revenue Code, as amended.
Plan B provides for the granting of options that are not intended to so
qualify. Unless specified otherwise, all the provisions of this Plan document
relate equally to both Plan A and Plan B, which Plans are condensed into one
Plan document solely for purposes of administrative convenience and are not
intended to constitute tandem plans. The purposes of the Plans are (a) to
attract and retain the best available people for positions of substantial
responsibility, and (b) to provide additional incentive to the Employees of the
Company (and its future parents and subsidiaries, if any) and to promote the
success of the Company's business.
2. Definitions. For purposes of the Plans, the following terms will
have the respective meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;
(c) "Common Stock" shall mean the Class A common stock of the Company;
(d) "Company" shall mean Dynamic Associates, Inc., a Nevada corporation;
(e) "Committee" shall mean the committee appointed by the Board in
accordance with Paragraph 3(a) of this Plan document, if one is appointed;
(f) "Employee" shall mean any person, including an officer or director,
who is an employee (within the meaning of Section 422 of the Code) of the
Company, any parent, any subsidiary or any successors to any of the foregoing;
(g) "Incentive Option" shall mean an incentive stock option as defined in
Section 422(b) of the Code;
(h) "Non-Statutory Option" shall mean an option which does not qualify as
an Incentive Option;
(i) "Option" shall mean a stock option granted pursuant to the Plan,
whether an Incentive Option or a Non-Statutory Option;
(j) "Option Agreement" shall mean an agreement substantially in the form
attached hereto as Exhibit A or the form attached hereto as Exhibit B, or such
other form or forms as the Board (subject to the terms and conditions of the
Plans) may from time to time approve, evidencing an Option;
(k) "Option Grant Date" shall mean the date on which an Option is granted
by the Board;
(1) "Optioned Stock" shall mean the Common Stock subject to an Option
granted pursuant to a Plan;
(m) "Optionee" shall mean an Employee or other Eligible Person who
receives an Option;
(n) "Outstanding Incentive Option" shall mean any Incentive Stock Option
which has not yet been exercised in full or has not yet expired by lapse of
time;
(o) "Parent" shall mean a "parent corporation" as defined in Section
424(e) of the Code;
(p) "Plan A" shall mean the 1997 Incentive Stock Option Plan;
(q) "Plan B" shall mean the 1997 Non-Statutory Stock Option Plan;
(r) "Predecessor Corporation" shall mean a corporation which is a party to
a transaction described in Code Section 424(a) (or which would be so described
if a substitution or assumption under such section had been effected) with the
Company, a Parent, a Subsidiary or a predecessor corporation of any such
corporations.
(s) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of this Plan document;
(t) "Stock Purchase Agreement" shall mean an agreement substantially in
the form attached hereto as Exhibit C or such other form or forms as the Board
(subject to the terms and conditions of this Plan) may from time to time
approve, which is to be executed as a condition of purchasing Optioned Stock
upon exercise of an Option as provided in a Plan; and,
(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
3. Administration of Plan.
(a) Procedure. The Plans shall be administered by the Board.
The Board may appoint a Committee consisting of not less than two (2)
members of the Board to administer one or both of the Plans on behalf of the
Board, subject to such terms and conditions as the Board may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed by
the Board. From time to time, the Board may increase the size of the Committee
and appoint additional members thereof, remove members of the Committee, and
thereafter, directly administer the Plans. Any references herein to the Board
shall refer to the Committee, if one is appointed, to the extent of the
Committee's authority.
(b) Limitations on Members of Board. Members of the Board who are
either eligible for options or have been granted Options may vote on any
matters affecting the administration of the Plans or the grant of any Options
pursuant to the Plans; except that no such member shall act in connection with
an Option to himself or herself, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board during which
action is taken with respect to Options of such member.
(c) Powers of the Board. Subject to the provisions of the Plan the
Board shall have the authority, in its discretion, to make all determinations
necessary or advisable for the administration of the Plans, including without
limitation:
(i) to determine, upon review of relevant information, the then
fair market value per share of the Common Stock;
(ii) to determine the exercise price of the Options to be granted,
subject to the provisions of Paragraph 8 of this Plan document;
(iii) to determine the Employees to whom, and the time or
times at which, Options shall be granted, and the number of shares of Optioned
Stock to be represented by each Option;
(iv) to determine whether Options granted hereunder shall be
granted under Plan A as Incentive Options or Plan B as Non-statutory Options;
(v) to prescribe, amend and rescind rules and regulations
relating to the Plans;
(vi) to determine the terms and provisions of each Option granted
under the Plans (which need not be identical) and to modify or amend each
Option (with or without consent of the Optionee, if necessary);
(vii) to accelerate the exercise date of any Option;
(viii) to construe and interpret the Plans, the Option Agreements,
Stock Purchase Agreements and any other agreements provided for hereunder; and
(ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
the Board or to take such other actions as may be necessary or advisable with
respect to the Company's rights pursuant to the Option, Stock Purchase Agreement
or other agreement approved hereunder.
(d) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee shall be
final and binding on all Optionees and any other proper holders of any Options
granted under the Plan.
4. Stock Subject to the Plan. Subject to the provisions of Section 13 of this
Plan document, the maximum aggregate number of shares which may be optioned
under these Plans is TWO MILLION (2,000,000) shares of authorized Common Stock.
This constitutes an absolute cumulative limitation on the total number of shares
that may be optioned under Plan A and Plan B and, therefore, at any particular
date the maximum aggregate number of shares which may be optioned under Plan A
is equal to TWO MILLION (2,000,000) minus the number of shares previously
optioned under Plan A and Plan B; and the maximum aggregate number of shares
which may be optioned under Plan B is equal to TWO MILLION (2,000,000) minus
the number of shares which have been previously optioned under Plan A or Plan B.
All shares to be optioned under either Plan A or Plan B may be either authorized
but unissued shares or shares held in the treasury. Shares of Common Stock that
(a) are repurchased by the Company after issuance hereunder pursuant to the
exercise of an Option or (b) are not purchased by the Optionee prior to the
expiration of the applicable Option Period (as described hereinbelow) shall
again become available to be covered by Options to be issued hereunder and
shall not, as of the effective date of such repurchase or expiration, be
counted as having been previously optioned for purposes of the above described
maximum number of shares which may be optioned hereunder.
5. Eligibility. Options under Plan A may be granted to any Employee who is
designated by the Board in its discretion. Non Employees, including directors
of the Company or any Parent or Subsidiary, who are not regular employees of
the Company, are not eligible to receive Options under Plan A. Options under
Plan B may be granted to any Employee, any Non-Employee director of Company or
any Parent or Subsidiary, and any consultant or independent contractors who
provide valuable services to the Company (or its Parent or Subsidiary), all as
designated by the Board in its discretion. An Optionee who has been granted an
Option may, if otherwise eligible, be granted an additional Option or Options.
Options may be granted to one or more persons without being granted to other
eligible persons, as the Board may deem fit.
6. Term of the Plan. Plan A shall become effective immediately upon the
earlier to occur of its adoption by the Board or its approval by vote of a
majority of the outstanding shares of the Company entitled to vote on the
adoption of such Plan. Plan B shall become effective immediately upon its
adoption by the Board. Each Plan shall continue in effect until December 31,
2007 unless sooner terminated under Sections 15 or 18 of this Plan document.
No Option may be granted under a Plan after its expiration.
7. Option Period. Each Option granted pursuant to either Plan shall be
evidenced by an Option Agreement. Each Option shall expire and all rights
thereunder shall end at the expiration of such period (which shall in no event
be more than ten (10) years) after the Option Grant Date as shall be fixed by
the Board, subject in all cases to earlier expiration as provided in Section
11 of this Plan document. Notwithstanding the foregoing, the term of each
Incentive Option granted to an Employee who, at the time the Incentive Option
is granted, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary (determined as required by the Code as applied to Incentive Options)
shall not be more than five (5) years from the Option Grant Date.
8. Option Price and Consideration.
(a) Price. The per share Option price for the Shares to be issued
pursuant to an Option granted under either Plan shall be such price as is
determined by the Board in its sole discretion. Notwithstanding the foregoing,
with respect to Incentive Options granted under Plan A: (i) such price shall in
no event be less than one hundred percent (100%) of the fair market value per
Share of the Company's Common Stock on the Option Grant Date, as determined by
the Board; and (ii) in the case of an Incentive Option granted to an Employee
who, at the time the Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent, Subsidiary or Predecessor Corporation (determined as
required by the Code as applied to Incentive Options), the per share Option
price shall be at least one hundred ten percent (110%) of the fair market
value as of the Option Grant Date, as determined by the Board. The fair
market value shall be determined by the Board in its sole discretion, exercised
in good faith; provided, however, that where there is a public market for the
Common Stock, the fair market value per share shall be the mean of the reported
bid and asked price for the Common Stock on the date of the grant, or, in the
event the Common Stock is listed on a stock exchange, the fair market value per
share shall be the closing price on the exchange as of the date of grant of the
Option.
(b) Form of Consideration. The form of consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Board and may consist of cash, promissory
notes, or the surrender of shares of Common Stock having a fair market value on
the date of surrender equal to the purchase price of the Shares as to which said
Option shall be exercised, a combination thereof, or such other consideration
and method of payment for the issuance of Shares as is permitted under
applicable law.
(c) Promissory Notes. If the consideration for the exercise of an
Option is a promissory note, such note shall be a full recourse promissory
note executed by the Optionee. If the option is an Incentive Option under Plan
A, such note shall bear interest at a per annum rate which is not less than the
greater of (i) the applicable "test rate" described in Treasury Regulations
Section 1.4831(d) in effect on the date of exercise or (ii) a fair market
interest rate, as determined by the Board in its good faith discretion. If a
promissory note is given as consideration, the Company may retain the
Shares purchased upon exercise of the Option in escrow as security for payment
of the promissory note.
(d) Surrendered Common Stock. If the consideration for the exercise
of an Option is the surrender of previously acquired and owned shares of common
stock of the Company, the Optionee will be required to make representations and
warranties satisfactory to the Company regarding the Optionee's title to the
shares used to effect the purchase, including without limitation,
representations and warranties that the Optionee has good and marketable title
to such shares free and clear of any and all liens, encumbrances, charges,
equities, claims, security interests, options or restrictions and has full
power to deliver such shares without obtaining the consent or approval of any
person or governmental authority other than those which have already given
consent or approval in a form satisfactory to the Company. The value of the
shares used to effect the purchase shall be the fair market value of those
shares as determined by the Board in its sole discretion, exercised in good
faith.
9. Limit on Value of Optioned Stock Issued Under Plan A. The aggregate
fair market value (determined as of the Option Grant Date of each Option) of
the Shares with respect to which Incentive Options are exercisable for the first
time by the Optionee during any calendar year under Plan A and all other
incentive stock option plans of the Company, any Parent or Subsidiary, or any
Predecessor Corporation of any such corporation shall not exceed One Hundred
Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the
Code.
10. Exercise of Option.
(a) General Terms. Any Option granted hereunder shall be exercisable
at such times and under such conditions as may be determined by the Board which
conditions may include performance criteria with respect to the Company and/or
the Optionee or provisions for vesting over a period of time conditioned upon
continued employment and shall include the contemporaneous execution of a Stock
Purchase Agreement in a form approved by the Board and as shall be permissible
under the terms of the Plan. In all events, in order to exercise an Option
hereunder the Optionee shall execute a Stock Purchase Agreement in a form
approved by the Board and shall deliver the required (or permitted) exercise
consideration to the Company. As a condition to the exercise of an Option, the
Board may require the Optionee pursuant to the Option Agreement to agree to
restrictions on the sale or other transfer of ownership of the Common Stock
acquired by an Optionee or to sell such Shares to the Company upon termination
of employment.
(b) Partial Exercise. An Option may be exercised in accordance with
the provisions of either Plan as to all or any portion of the Shares then
exercisable under an Option, from time to time during the term of the Option.
An Option may not be exercised for a fraction of a Share.
(c) Time of Exercise. An Option shall be deemed to be exercised when
the Company has received at its principal business office: (i) written notice of
such exercise in accordance with the terms of the Option Agreement and given by
the person entitled to exercise the Option; (ii) full
payment for the Shares with respect to which the Option is exercised; (iii) the
executed Stock Purchase Agreement if required; and (iv) any other
representations or agreements required by the terms of this Plan or the Option
Agreement. Full payment may consist of such consideration as is authorized by
the Board as provided hereunder.
(d) No Rights as Shareholder Until Exercise. Until this Option is
properly exercised hereunder and the Company receives full payment for the
Shares with respect to which the Option is exercised, no right to receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Option is properly exercised and
payment in full is received, except as provided in Section 13 of this Plan
document.
(e) Issuance of Share Certificates. As soon as practicable after any
proper exercise of an Option in accordance with the provisions of this Plan
document and payment in full for the exercised Shares, the Company shall,
without transfer or issue tax to the Optionee, deliver to the Optionee at the
principal business office of the Company, or such other place as shall be
mutually acceptable, a certificate or certificates representing the Shares of
Common Stock as to which the Option has been exercised. The time of issuance
and delivery of the certificates) representing the Shares of Common Stock may
be postponed by the Company for such period as may be required for it, with
reasonable diligence, to comply with any applicable listing requirements of any
national or regional securities exchange and any law or regulation applicable
to the issuance and delivery of such Shares.
(f) Reduction of Shares Upon Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which thereafter may
be available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.
11. Termination of Employment.
(a) General. If an Optionee ceases to be an Employee then, except as
provided in Paragraph 11(a) or 11(b) hereof, any Option of the Optionee, whether
vested or non-vested, and if issued under Plan A, shall terminate as of the date
of termination of employment. Notwithstanding the foregoing, within the earlier
of (i) thirty (30) days (or such other period of time not exceeding three (3)
months as set forth in the Option Agreement) following the date of termination
of employment and (ii) the time the Option expires by its terms, the Optionee
may exercise the Option to the extent it was vested and exercisable on the date
of termination of employment, provided the Optionee was not discharged for cause
(in which event the Option shall not be exercisable after the date of
termination).
(b) Death or Disability. If Optionee dies or becomes disabled
(within the meaning of Code Section 422 and the rules and regulations
thereunder) then, within the earlier of thirty (30) days (or such other period
of time not exceeding six (6) months as set forth in the Option Agreement)
following the date of such death or disability and the time the Option expires
by its terms, the Optionee
or such person or persons to whom the Optionee's rights under the Option shall
pass by the Optionee's will or by the laws of descent and distribution, may
exercise the Option to the extent it was vested and exercisable on the date of
death or disability.
(c) Definition of Termination. For purposes of each Plan, an Employee
shall be deemed terminated as an employee when such Employee's employment is
deemed to no longer continue within the meaning of Code Section 422 and the
rules and regulations thereunder.
12. Non-transferability of Options. The Options and any rights and
privileges granted under any Option Agreement are not transferable by the
Optionee, either voluntarily or by operation of law, otherwise than by will and
the laws of descent and distribution and shall be exercisable during Optionee's
lifetime only by Optionee.
13. Adjustments Upon Changes in Capitalization.
(a) Reorganizations, Recapitalization, Etc. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the Company
through reorganization, recapitalization, reclassification, stock dividend (but
only on Common Stock), stock split, reverse stock split or other similar
transaction, or, if any other increase or decrease occurs in the number of
Shares of Common Stock of the Company without the receipt of consideration by
the Company, then an appropriate and proportional adjustment shall be made in
(i)the number and kind of shares of stock covered by each outstanding Option,
(ii) the number and kind of shares of stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted (or
which have been returned to the Plan upon cancellation of an Option), and (iii)
the exercise price per share of stock covered by each such outstanding Option.
The granting of stock options or bonuses to Employees of the Company and the
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without the receipt of consideration." Notwithstanding the
foregoing, no adjustment need be made under this paragraph if, upon the advice
of counsel, the Board determines that such adjustment may result in federal
taxable income to the holders of Options or Common Stock or other classes of
the Company's securities.
(b) Dissolution, Liquidation, Etc. Upon the dissolution or
liquidation of the Company, or upon a reorganization, merger or consolidation
of the Company with one or more corporations as a result of which the Company
is not the surviving corporation, or upon a sale (or exchange through merger)
of substantially all the property or more than fifty percent (50%) of the then
outstanding stock of the Company to another corporation, the Plan shall
terminate, and any Option theretofore granted hereunder shall terminate.
Notwithstanding the foregoing, the Board may provide in writing in connection
with, or in contemplation of, such transaction for any, all or none of the
following alternatives (separately or in combination): (i) for all or a portion
of the Options theretofore granted to become immediately exercisable; (ii) for
the assumption by the successor corporation of the Options theretofore granted
or the substitution by such corporation for such Options of new options
covering the stock of the successor corporation, or a Parent or Subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices; or (iii) for the continuance of the Plan by such successor corporation
in which event the Plan and the Options theretofore granted shall continue in
the manner and under the terms so provided.
(c) No Fractional Shares. No fractional shares of the Common Stock
shall be issuable on account of any action under this Paragraph 13, and the
aggregate number of shares into which Shares then covered by an Option, when
changed as the result of such action, shall be reduced to the largest number of
whole Shares resulting from such action. Notwithstanding the foregoing, the
Board, in its sole discretion, may determine to issue scrip certificates, in
respect to any fractional shares, which scrip certificates, in such event,
shall be in a form and have such terms and conditions as the Board in its
discretion shall prescribe.
(d) Binding Effect of Board Determinations. All adjustments under
this Paragraph 13 shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(e) No Other Adjustments. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares of Common
Stock subject to the Plan or any Options.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time and from
time to time suspend or terminate either Plan. The Board may also amend or
revise either Plan from time to time in such respects as the Board may deem
advisable, except that, without approval of the holders of the majority of the
outstanding shares of the Company's Common Stock, no such revision or amendment
shall amend Plan A so as to:
(i) Increase the number of Shares subject to Plan A other than in
connection with an adjustment under Section 13 of this Plan document;
(ii) Permit the granting of Incentive Options to anyone other than as
provided in Paragraph 5;
(iii) Remove the administration of Plan A from the Board;
(iv) Extend the term of Plan A beyond that provided in Paragraph 6
hereof;
(v) Extend the term of any Incentive Option beyond the maximum term
set forth in Paragraph 7;
(vi) Permit the granting of Incentive Options which would not qualify
as Incentive Stock Options; or
(vii) Decrease the per share option price required with respect to
Incentive Options under Paragraph 8(a) hereof.
(b) Effect of Termination. Except as otherwise provided in Section
13, without the written consent of the Optionee, any such termination of the
Plan shall not affect Options already granted and such Options shall remain in
full force and effect as if the Plan had not been terminated.
15. Conditions Upon Issuance of Shares. Options granted under either Plan
are conditioned upon the Company obtaining any required permit, or exemption
from the qualification or registration provisions of any applicable state
securities law and other appropriate governmental agencies, authorizing the
Company to issue such Options and Optioned Stock upon terms and conditions
acceptable to the Company. Shares shall not be issued with respect to an
Option granted under either Plan unless the exercise of such Option and the
issuance and delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Board may require the person
exercising such Option to execute an agreement approved by the Board, and may
require the person exercising such Option to make any representation and
warranty to the Company as may, in the judgment of counsel to the Company, be
required under applicable laws or regulations.
16. Reservation of Shares. During the term of the Plans, the Company will
at all times reserve and keep available the number of Shares as shall be
sufficient to satisfy the requirements of the Plans. During the term of the
Plans, the Company will use its best efforts to seek to obtain from appropriate
regulatory agencies any requisite authorization in order to issue and sell such
number of Shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Company to obtain from any such
regulatory agency the requisite authorization(s) deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder, or the
inability of the Company to confirm to its satisfaction that any issuance and
sale of any Shares hereunder will meet applicable legal requirements, shall
relieve the Company of any liability in respect to the non-issuance or sale of
such Shares as to which such requisite authority shall not have been obtained.
17. Taxes, Fees, Expenses and Withholding of Taxes.
(a) Issue and Transfer Taxes. The Company shall pay all original
issue and transfer taxes (but not income taxes, if any) with respect to the
grant of Options and the issue and transfer of Shares pursuant to the exercise
of such Options, and all other fees and expenses necessarily incurred
by the Company in connection therewith, and will use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the Company,
shall be applicable thereto.
(b) Withholding. The grant of Options hereunder and the issuance of
Shares of Common Stock pursuant to the exercise of such Options are conditioned
upon the Company's reservation of the right to withhold, in accordance with any
applicable law, from any compensation payable to the Optionee any taxes required
to be withheld by federal, state or local law as a result of the grant or
exercise of such Option or the sale of the Shares issued upon exercise of the
Option.
18. Shareholder Approval of Plan A. Continuance of Plan A and the
effectiveness of any Option granted under such Plan shall be subject to approval
by the holders of the outstanding voting stock of the Company in accordance with
applicable law within twelve (12) months before or after the date Plan A is
adopted by the Board. Any Options granted under Plan A prior to obtaining
such shareholder approval shall be granted upon the conditions that the Options
so granted: (i) shall not be exercisable prior to such approval and (ii) shall
become null and void ab initio if such shareholder approval is not obtained.
19. Liability of Company. The Company, its Parent or any Subsidiary which
is in existence or hereafter comes into existence, will not be liable to an
Optionee granted an Incentive Option or other person if it is determined for
any reason by the Internal Revenue Service or any court having jurisdiction that
any Incentive Options granted hereunder are not Incentive Stock Options.
20. Notices. Any notice to be given to the Company pursuant to the
provisions of the Plans shall be addressed to the Company in care of its
Secretary at its principal office, and any notice to be given to an Optionee
shall be delivered personally or addressed to such Optionee at the address given
beneath such Optionee's signature on such Optionee's Stock Option Agreement, or
at such other address as such Employee (or any transferee) upon the transfer of
the Optioned Stock may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered or certified, and deposited, postage
and registry or certification fee prepaid, in a post office or branch post
office regularly maintained by the United States Postal Service. It shall be
the obligation of each Optionee and each transferee holding Shares purchased
upon exercise of an Option to provide the Secretary of the Company, by letter
mailed as provided hereinabove, with written notice of such person's direct
mailing address.
21. No Enlargement of Employee Rights. This Plan is purely voluntary on
the part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee. Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its Parent, Subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time. No
Employee shall have any right to or interest in Options authorized hereunder
prior to the grant of such Option to such employee, and upon such grant he or
she shall have only such rights
and interests as are expressly provided herein, subject, however, to all
applicable provisions of the Company's Certificate of Incorporation, as the
same may be amended from time to time.
22. Legends on Certificates.
(a) Federal Law. Unless an appropriate registration statement is
filed pursuant to the Federal Securities Act of 1933, as amended, with respect
to the Options and Shares issuable under the Plans, each certificate
representing such Options and Shares shall be endorsed on its face with a
legend substantially as follows:
"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED
UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
(b) State Legend. If required by applicable state authorities each
certificate representing the Options and Shares issuable under the Plans shall
be endorsed on its face with any legends required by such authorization.
(c) Additional Legends. Each certificate representing the Options
and Shares issuable under the Plans shall also contain legends as are set forth
in any Stock Purchase Agreement or other agreement the execution of which is a
condition to the exercise of an Option under this Plan. In addition, each
Option Agreement shall be endorsed with a legend substantially as follows:
"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED
INTO BETWEEN THE HOLDER OF THIS OPTION AND THE COMPANY
AS A CONDITION TO EXERCISE OF THIS OPTION."
23. Availability of Plan. A copy of the Plans shall be delivered to the
Secretary of the Company and shall be shown by him to any eligible person
making reasonable inquiry concerning it.
24. Invalid Provisions. In the event that any provision of the Plans is found
to be invalid or otherwise unenforcable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all
such other provisions shall be given full force and effect to the same extent
as though the invalid or unenforceable provision was not contained herein.
25. Applicable Law. These Plans shall be governed and construed in accordance
with the laws of the State of Nevada applicable to contracts executed, and to
be fully performed, in Nevada.
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of
these Plans by the Board on ______, 1997, the Company has caused these Plans to
be duly executed by its duly authorized officers, effective as of _____, 1997.
DYNAMIC ASSOCIATES, INC.,
A Nevada corporation.
_____________________________________________
By: _________________________________________
Title: _______________________________________
EXHIBIT "A"
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE
OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR
DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK
PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY
AS A CONDITION TO EXERCISE OF THIS OPTION.
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of the ___________ day of _________________, 19__,
by and between Dynamic Associates, Inc. a Nevada corporation (hereinafter called
"Company") and _________________________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's
1997 Incentive Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors), who contribute to the financial success of the Company or
its parent or subsidiary corporations.
B. Optionee is a key member of the Company or its parent or subsidiary
corporations, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to the Optionee.
C. The granted option is intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions
set forth in this Agreement, there is hereby granted to Optionee, as of the
date of this Agreement (the "Grant
Date"), a stock option to purchase up to ______ shares of the Company's Common
Stock (the "Optioned Shares") from time to time during the option term at the
option price of $_______ per share.
2. Plan. The options granted hereunder are in all instances subject
to the terms and conditions of the Plan. In the event of any conflict between
this Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
3. Option Term. This option shall have a maximum term of _______
(______) years measured from the Grant Date and shall accordingly expire at the
close of business on ________, 19__ (the "Expiration Date"), unless sooner
terminated in accordance with Paragraph 7, 9(a) or 20.
4. Option Nontransferable; Exception. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. Condition Precedent to Exercise. This option may not be
exercised in whole or in part at any time prior to the time the Company has
satisfied the following condition precedent:
[this could be registration, obtaining a goal or period of time].
In the event the forgoing condition precedent has not been satisfied prior to
the Expiration Date or prior to this option's earlier termination in accordance
with Paragraph 7, 9(a) or 20, then this option shall terminate and cease to be
outstanding.
6. Dates of Exercise. This option may not be exercised in whole or
in part at any time prior to the time it is approved by the Company's
shareholders in accordance with Paragraph 20. Provided such shareholder
approval is obtained and the condition precedent to exercise set forth in
Paragraph 5 has been satisfied, this option shall become exercisable for
100% of the Optioned Shares one (1) year from the Grant Date, provided that in
no event may options for more than One Hundred Thousand Dollars ($100,000) of
Optioned Shares, calculated at the exercise price, become exercisable for the
first time in any calendar year. Once exercisable, options shall remain so
exercisable until the expiration or sooner termination of the option term under
Paragraph 7 or Paragraph 9(a) of this Agreement. In no event, however, shall
this option be exercisable for any fractional shares.
7. Accelerated Termination of Option Term. The option term specified
in Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) Except as otherwise provided in subparagraphs (ii), (iii) or (iv)
below, should Optionee cease to be an Employee of the Company at any time during
the option term, then the period for exercising this option shall be reduced to
a one (1) month period commencing with the date of such cessation of Employee
status, but in no event shall this option be exercisable at any time after the
Expiration Date. Upon the expiration of such one (1) month period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or legatees
(as the case may be) shall have the right to exercise this option for the number
of shares (if any) for which the option is exercisable on the date of the
optionee's death. Such right shall lapse and this option shall cease to be
exercisable upon the earlier of (i) six (6) months from the date of the
optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option term,
then Optionee shall have a period of six (6) months (commencing with the date
of such cessation of Employee status) during which to exercise this option;
provided, however, that in no event shall this option be exercisable at any
time after the Expiration Date. Optionee shall be deemed to be permanently
disabled if Optionee is, by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration
of not less than twelve (12) months, unable to perform his/her usual duties for
the Company or its Parent or Subsidiary corporations. Upon the expiration of
the limited period of exercisability or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding.
(iv) Should Optionee's status as an Employee be terminated for cause
(including, but not limited to, any act of dishonesty, willful misconduct,
failure to perform material duties, fraud or embezzlement or any unauthorized
disclosure or use of confidential information or trade secrets) or should
Optionee make or attempt to make any unauthorized use or disclosure of the
confidential information or trade secrets of the Company or any parent or
subsidiary corporations, then in any such event this option shall terminate and
cease to be exercisable immediately upon such termination of Employee status or
such unauthorized disclosure or use of confidential or secret information or
attempt thereat.
(v) For purposes of this Paragraph 7 and for all other purposes under
this Agreement, Optionee shall be deemed to be an Employee of the Company and
to continue in the Company's employ for so long as Optionee remains an Employee
of the Company or one or more of its parent or subsidiary corporations as such
terms are defined in the Plan.
8. Adjustment in Option Shares
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of shares, or
other change affecting the
outstanding Common Stock as a class without receipt of consideration (as set
forth in the Plan), then appropriate adjustments will be made to (i) the total
number of Optioned Shares subject to this option and (h) the option price
payable per share in order to reflect such change and thereby preclude a
dilution or enlargement of benefits hereunder.
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger of other business
combination would have been entitled to receive in the consummation of such
merger or other business combination.
9. Special Termination of Option.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding voting
stock is transferred, or exchanged through merger, to different holders
in a single transaction or a series of related transactions; then this
option shall terminate upon the consummation of such Corporate Transaction
and cease to be exercisable, unless it is expressly assumed by the
successor corporation or parent thereof. The Company shall Corporate
Transaction. The Company can give no assurance that the options shall
be assumed and shall provide Optionee with at least thirty (30) days prior
written notice of the specified date for the med by the successor
corporation or its parent company and it may occur that some options
outstanding under the Plan will be assumed while these options are
terminated.
(b) In the event of a Corporate Transaction, the Company may, at
its option, accelerate the vesting schedule contained in Section 6 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even if
it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
10. Privilege of Stock Ownership. The holder of this option shall
not have any of the rights of a shareholder with respect to the Optioned Shares
until such individual shall have exercised the option and paid the option price
in accordance with this Agreement.
11. Manner of Exercising Option.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit ___ to this
Agreement the "Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described in
Exhibit B, if any, attached hereto or by the Board at the time of
exercise.
(b) This option shall be deemed to have been exercised with respect
to the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and shall
accompany the Purchase Agreement. As soon thereafter as practical, the Company
shall mail or deliver to Optionee or to the other person or persons exercising
this option a certificate or certificates representing the shares so purchased
and paid for.
12. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's Common Stock
may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may be
requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
13. Successors and Assigns. Except to the extent otherwise provided in
Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
14. Liability of Company.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares unless shareholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option without
the imposition of requirements unacceptable to the Company in its reasonable
discretion shall relieve the Company of any liability with respect to the non-
issuance or sale of the Common Stock as to which such approval shall not have
been obtained. The Company, however, shall use its best efforts to obtain all
such approvals.
(c) Neither the Company nor any Parent, Subsidiary or successor
corporation will have any liability to Optionee or any other person if it is
determined for any reason that any options granted hereunder are not Incentive
Stock Options.
15. No Employment Contract. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's
status as an Employee at any time, with or without cause.
16. Notices. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Company in
care of its Secretary at its corporate offices. Any notice required to be given
or delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on this Agreement. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
17. Loans or Guarantees. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. Construction. This Agreement and the option evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to
the Plan. All decisions of
the Company with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in
this option.
19. Governing Law. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Nevada.
20. Shareholder Approval. The grant of this option is subject to approval of
the Plan by the Company's shareholders within twelve (12) months after the
adoption of the Plan by the Board of Directors, and this option may not be
exercised in whole or in part until such shareholder approval is obtained. In
the event that such shareholder approval is not obtained, then this option
shall thereupon terminate and Optionee shall have no further rights to acquire
any Optioned Shares hereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer and Optionee
has also executed this Agreement in duplicate, all as of the day and year
indicated above.
DYNAMIC ASSOCIATES, INC.,
A Nevada corporation.
_____________________________________________
By: _________________________________________
Title: _______________________________________
________________________________
OPTIONEE
Address:_________________________
_________________________
_________________________
EXHIBIT "B"
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE
OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR
DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED. THE SHARES WHICH MAY BE
PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED
INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF
THIS OPTION.
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the __________ day of __________________, 19___,
by and between DYNAMIC ASSOCIATES, INC., a Nevada corporation (hereinafter
called "Company"), and ____________________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's
1997 Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting
and retaining the services of selected key employees (including officers and
employee directors) and others (collectively, "Eligible Persons"), who
contribute to the financial success of the Company or its parent or subsidiary
corporations.
B. Optionee is an Eligible Person and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Company's grant of a stock option to Optionee.
C. The granted option is not intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code, but is rather a non-statutory option.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions set forth in
this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock
option to purchase up to ____________
shares of the Company's Common Stock (the "Optioned Shares") from time to time
during the option term at the option price of $___________ per share.
2. Plan. The options granted hereunder are in all instances subject to
the terms and conditions of the Plan. In the event of any conflict between
this Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
3. Option Term. This option shall have a maximum term of years measured
from the Grant Date and shall accordingly expire at the close of business on
__________________, 19___ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 6 or 8(a).
4. Option Nontransferable; Exception. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. Dates of Exercise. This option shall be exercisable as follows:
options for ______% of the Optioned Shares shall become exercisable one (1)
year from the Grant Date and an additional _______% of the Optioned Shares
shall become exercisable on each successive anniversary of the Grant Date.
Once exercisable, options shall remain so exercisable until the expiration or
sooner termination of the option term under Paragraph 6 or Paragraph 8(a) of
this Agreement. In no event, however, shall this option be exercisable for any
fractional shares.
6. Accelerated Termination of Option Term. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) Except as otherwise provided in subparagraphs (ii), (iii) or (iv)
below, should Optionee cease to be an Employee of the Company at any time during
the option term, then the period for exercising this option shall be reduced to
a one (1) month period commencing with the date of such cessation of Employee
status, but in no event shall this option be exercisable at any time after the
Expiration Date. Upon the expiration of such one (1) month period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be
outstanding.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or legatees
(as the case may be) shall have the right to exercise this option for the number
of shares (if any) for which the option is exercisable on the date of the
optionee's death. Such right shall lapse and this option shall cease to be
exercisable upon the earlier of (i)six (6) months from the date of the
optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by
reason thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with the
date of such cessation of Employee status) during which to exercise this option;
provided, however, that in no event shall this option be exercisable at any
time after the Expiration Date. Optionee shall be deemed to be permanently
disabled if Optionee is, by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration
of not less than twelve (12) months, unable to perform his/her usual duties for
the Company or its Parent or Subsidiary corporations. Upon the expiration of
the limited period of exercisability or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding.
(iv) Should Optionee's status as an Employee be terminated for cause
(including, but not limited to, any act of dishonesty, willful misconduct,
failure to perform material duties, fraud or embezzlement or any unauthorized
disclosure or use of confidential information or trade secrets) or should
Optionee make or attempt to make any unauthorized use or disclosure of the
confidential information or trade secrets of the Company or any parent or
subsidiary corporations, then in any such event this option shall terminate and
cease to be exercisable immediately upon such termination of Employee status or
such unauthorized disclosure or use of confidential or secret information or
attempt thereat.
(v) For purposes of this Paragraph 6 and for all other purposes under
this Agreement, if Optionee is an Employee, Optionee shall be deemed to be an
Employee of the Company and to continue in the Company's employ for so long as
Optionee remains an Employee of the Company or one or more of its parent or
subsidiary corporations as such terms are defined in the Plan. For purposes of
this Paragraph 6 and for all other purposes under this Agreement, if Optionee
is not an Employee, but is eligible because Optionee is a director, consultant
or contractor of Company or a parent or subsidiary corporation, Optionee shall
be deemed to be an Eligible Person for so long as Optionee remains a director,
consultant or contractor of the Company or one or more of its parent or
subsidiary corporations as such terms are defined in the Plan.
7. Adjustment in Option Shares.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of shares,
or other change affecting the outstanding Common Stock as a class without
receipt of consideration (as set forth in the Plan), then appropriate
adjustments will be made to (i) the total number of Optioned Shares subject to
this option and (ii) the option price payable per share in order to reflect
such change and thereby preclude a dilution or enlargement of benefits
hereunder.
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number
and class of securities to which Optionee immediately prior to such merger or
other business combination would have been entitled to receive in the
consummation of such merger or other business combination.
8. Special Termination of Option.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding voting stock
is transferred, or exchanged through merger, to different holders in a single
transaction or a series of related transactions; then this option shall
terminate upon the consummation of such Corporate Transaction and cease to be
exercisable, unless it is expressly assumed by the successor corporation or
parent thereof. The Company shall provide Optionee with at least thirty (30)
days prior written notice of the specified date for the Corporate Transaction.
The Company can give no assurance that the options shall be assumed by the
successor corporation or its parent company and it may occur that some options
outstanding under the Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 5 hereof, but shall
have no obligation to do so. The Company shall have the right to accelerate
other options outstanding under the Plan or any other plan, even if it does
not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
9. Privilege of Stock Ownership. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
10. Manner of Exercising Option.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or legatee, as the
case may be) must take the following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit to this Agreement (the
"Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in cash,
unless another form of consideration is permitted as described in Exhibit B, if
any, attached hereto or by the Board at the time of exercise.
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such time
as the executed Purchase Agreement for such shares shall have been delivered to
the Company and all other conditions of this Section have been fulfilled.
Payment of the option price shall immediately become due and shall accompany
the Purchase Agreement. As soon thereafter as practical, the Company shall
mail or deliver to Optionee or to the other person or persons exercising this
option a certificate or certificates representing the shares so purchased and
paid for.
11. Compliance With Laws and Regulations.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's Common Stock
may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may be
requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
12. Successors and Assigns. Except to the extent otherwise provided in
Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
13. Liability of Company.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares unless shareholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option without
the imposition of requirements unacceptable to the Company in its reasonable
discretion shall relieve the Company of any liability with respect to the
nonissuance or sale of the Common Stock as to which such approval shall not have
been obtained. The Company, however, shall use its best efforts to obtain all
such approvals.
14. No Employment Contract. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
15. Notices. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
16. Withholding. Optionee acknowledges that, upon any exercise of this option,
the Company shall have the right to require Optionee to pay to the Company an
amount equal to the amount the Company is required to withhold as a result of
such exercise for federal and state income tax purposes.
17. Loans or Guarantees. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. Construction. This Agreement and the option evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to
the express terms and provisions of the Plan. All decisions of the Company with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
19. Governing Law. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Nevada.
20. REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED
SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO
CERTAIN RIGHTS OF THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH
SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE
PURCHASE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer and Optionee
has also executed this Agreement in duplicate, all as of the day and year
indicated above.
DYNAMIC ASSOCIATES, INC.,
A Nevada corporation.
_____________________________________________
By: _________________________________________
Title: _______________________________________
________________________________
OPTIONEE
Address:_________________________
_________________________
_________________________
EXHIBIT "C"
STOCK PURCHASE AGREEMENT
This Agreement is made as of this ________ day of ___________19___, by
and among DYNAMIC ASSOCIATES, INC., a Nevada corporation ("Corporation"), and
the holder of a stock option under the Corporation's 1997 Stock Option Plan
("Optionee").
1. EXERCISE OF OPTION
1.1 Exercise. Optionee hereby purchases shares of Class A Common
Stock of the Corporation ("Purchased Shares") pursuant to that certain option
("Option") granted Optionee on _______________, 19___ ("Grant Date") under the
Corporation's 1997 Stock Option Plan ("Plan") to purchase up to _____ shares of
the Corporation's Class A Common Stock ("Total Purchasable Shares") at an option
price of $_______ per share ("Option Price").
1.2 Payment. Concurrently with the delivery of this Agreement to the
Secretary of the Corporation, Optionee shall pay the Option Price for the
Purchased Shares in accordance with the provisions of the agreement between the
Corporation and Optionee evidencing the Option ("Option Agreement") and shall
deliver whatever additional documents may be required by the Option Agreement
as a condition for exercise.
2. INVESTMENT REPRESENTATIONS
2.1 Investment Intent. Optionee hereby warrants and represents that
Optionee is acquiring the Purchased Shares for Optionee's own account and not
with a view to their resale or distribution and that Optionee is prepared to
hold the Purchased Shares for an indefinite period and has no present intention
to sell, distribute or grant any participating interests in the Purchase Shares.
Optionee hereby acknowledges the fact that the Purchased Shares have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"), and
that the Corporation is issuing the Purchased Shares to Optionee in reliance on
the representations made by Optionee herein.
2.2 Restricted Securities. Optionee hereby confirms that Optionee has
been informed that the Purchased Shares may not be resold or transferred unless
the Purchased Shares are first registered under the Federal securities laws or
unless an exemption from such registration is available. Accordingly, Optionee
hereby acknowledges that Optionee is prepared to hold the Purchased Shares for
an indefinite period and that Optionee is aware that Rule 144 of the Securities
and Exchange Commission issued under the 1933 Act is not presently available to
exempt the sale of the Purchased Shares from the registration requirements of
the 1933 Act. Should Rule 144 subsequently become available, Optionee is aware
that any sale of the Purchased Shares effected pursuant to the Rule may,
depending upon the status of Optionee as an
"affiliate" or "non-affiliate" under the Rule, be made only in limited amounts
in accordance with the provisions of the Rule, and that in no event may any
Purchased Shares be sold pursuant to the Rule until Optionee has held the
Purchased Shares for the requisite holding period following payment in cash of
the Option Price for the Purchased Shares.
2.3 Optionee Knowledge. Optionee represents and warrants that he or
she has a preexisting business or personal relationship with the officers and
directors of the Corporation, that he or she is aware of the business affairs
and financial condition of the Corporation and that he or she has such
knowledge and experience in business and financial matters with respect to
companies in business similar to the Corporation to enable him or her to
evaluate the risks of the prospective investment and to make an informed
investment decision with respect thereto. Optionee further represents and
warrants that the Corporation has made available to Optionee the opportunity to
ask questions and receive answers from the Corporation concerning the terms and
conditions of the issuance of the Purchased Shares and that he or she could be
reasonably assumed to have the capacity to protect his or her own interests in
connection with such investment.
2.4 Speculative Investment. Optionee represents and warrants that he
or she realizes that his or her purchase of the Purchased Shares will be a
speculative investment and that he or she is able, without impairing his or
her financial condition, to hold the Purchased Shares for an indefinite period
of time and to suffer a complete loss of his or her investment. Optionee
represents and warrants that he or she is aware and fully understands the
implications of the restrictions upon transfer imposed by the Plan and therefore
on the Purchased Shares.
2.5 Restrictive Legends. In order to reflect the restrictions on
disposition of the Purchased Shares, the stock certificates for the Purchased
Shares will be endorsed with the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
3. MISCELLANEOUS PROVISIONS
3.1 Optionee Undertaking. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation
may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on either the
Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.
3.2 Agreement Is Entire Contract. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and
shall in all respects be construed in conformity with the express terms and
provisions of the Plan.
3.3 Governing Law. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
3.4 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
3.5 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and the Optionee and the Optionee's legal representatives, heirs,
legatees, distributees, assigns and transfer by operation of law, whether or
not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms and conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
DYNAMIC ASSOCIATES, INC.,
A Nevada corporation.
_____________________________________________
By: _________________________________________
Title: _______________________________________
________________________________
OPTIONEE
Address:_________________________
_________________________
_________________________
EXHIBIT D
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only
acceptable form of consideration for the exercise of the
options.]
_________________