Biopulse International, Inc.
2000 Stock Option Plan
There is hereby established a 2000 Stock Option Plan (the "Plan").
The Plan provides for the grant to directors, officers, and employees of
Biopulse International, Inc. (the "Company") or its subsidiaries and
consultants and others who perform services for the Company or its
subsidiaries of options ("Options") to purchase shares of common stock of
the Company ("Common Stock").
1. Purpose. The purpose of the Plan is to provide additional
incentive to the officers and directors who render services to the Company,
who are responsible for the management and growth of the Company, or
otherwise contribute to the conduct and direction of its business,
operations and affairs. It is intended that Options granted under the Plan
strengthen the desire of such persons to join and remain in the employ (or
as directors) of the Company and stimulate their efforts on behalf of the
Company.
2. The Stock. The aggregate number of shares of Common Stock which
may be subject to Options shall not exceed 4,000,000. Such shares may be
either authorized and unissued shares, or treasury shares. If any Option
granted under the Plan shall expire, terminate or be canceled for any
reason without having been exercised in full, the corresponding number of
unpurchased shares shall again be available for the purposes of the Plan.
The preceding sentence shall apply only for purposes of determining the
aggregate number of shares of Common Stock subject to options, but shall
not apply for purposes of determining the maximum number of shares of
Common Stock with respect to which Options that may be granted to any
person participating in the Plan.
3. Administration of the Plan.
(a) The Plan shall be administered by a committee or committees (the
"Committee") which shall be appointed by the Board of Directors of the
Company (the "Board"). Subject to the express provisions of the Plan, the
Committee shall have authority, in its discretion, to determine the
individuals to receive Options, the times when they shall receive them and
the number of shares of Common Stock to be subject to each Option, and
other terms relating to the grant of Options.
(b) Subject to the express provisions of the Plan, the Committee
shall have authority to construe the respective option agreements and the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option
agreements (which need not be identical) and, as specified in this Plan,
the fair market value of the Common Stock, and to make all other
determinations necessary or advisable for administering the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to
the extent it shall deem expedient to carry it into effect, and it shall be
the sole and final judge of such expediency. The determinations of the
Committee on the matters referred to in this Section 3 shall be conclusive.
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(c) The Committee may, in its sole discretion, and subject to such
terms and conditions as it may adopt, accelerate the date or dates on which
some or all outstanding Options may be exercised.
(d) The Committee may require that any Option Shares issued be
legended as necessary to comply with applicable federal and state
securities laws.
4. Types of Options. Options granted under the Plan shall be in the form
of (i) incentive stock options ("ISOs"), as defined in Section 422 of the
Code, or (ii) non-statutory options which do not qualify under such Section
("NSOs"), or both, in the discretion of the Committee. The status of each
Option shall be identified in the option agreement.
5. Eligibility.
(a) ISOs may be granted to such officers and directors who are
employees of the Company as the Committee shall select from time to time.
(b) NSOs may be granted to such officers and directors of the Company
as the Committee shall select from time to time.
6. Option Price.
(a) The price or prices per share of Common Stock to be sold pursuant
to an Option (the "Exercise Price") shall be such as shall be fixed by the
Committee but shall in any case not be less than:
(i) the fair market value per share for such Common Stock on the
date of grant in the case of ISOs other than to a 10%
Shareholder,
(ii) 110% of the fair market value per share for such Common
Stock on the date of grant in the case of ISOs to a 10%
Shareholder, and
(iii) the fair market value per share for such Common Stock
on the date of grant in the case of NSOs.
(b) A "10% Shareholder" means an individual who within the meaning of
Section 422(b)(6) of the Code owns stock possessing more than 10 percent of
the total combined voting power to all classes of stock of the Company or
of its parent or any subsidiary corporation.
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7. Period of Option Vesting.
(a) The Committee shall determine for each Option the period during
which such Option shall be exercisable in whole or in part, provided,
however, that an ISO shall not be exercisable after the expiration of ten
years from the date of grant of such ISO and provided further that an ISO
granted to a 10% Shareholder shall not be exercisable after the expiration
of five years from the date of grant of such ISO.
(b) Special Rule for ISOs. The aggregate fair market value
(determined at the time the ISO is granted and ISOs will be taken into
account in the order in which they were granted) of the stock with respect
to which ISOs are exercisable for the first time by an Optionee (as defined
below) during any calendar year (under all such plans of the Company, its
parent or subsidiaries) shall not exceed $100,000, and any excess shall be
considered an NSO.
8. Effect of Termination of Employment.
(a) The Committee shall determine for each Option the extent, if any,
to which such Option shall be exercisable in the event of the termination
of the person to whom such Option was granted ("Optionee") from employment
with or rendering of other services to the Company.
(b) However, any such Option which is an ISO shall in all events
lapse unless exercised by the Optionee:
(i) prior to the 89th day after the date on which employment
terminated, if termination was other than by reason of death; and
(ii) within the twelve-month period next succeeding the death of
the Optionee, if termination is by reason of death.
(c) The Committee shall have the right, at any time, and from time to
time, with the consent of the Optionee, to modify the lapse date of an
Option and to convert an ISO into an NSO to the extent that such
modification in lapse date increases the life of the ISO beyond the dates
set forth above or beyond dates otherwise permissible for an ISO.
9. Payment for Shares of Common Stock. Upon exercise of an Option, the
Optionee shall make full payment of the Option Price in cash, or, with the
consent of the Committee and to the extent permitted by it:
(a) with Common Stock of the Company valued at fair market value on
date of exercise, but only if held by the Optionee for a period of time
sufficient to prevent a pyramid exercise that would create a charge to the
Companys earnings;
(b) with a full recourse interest bearing promissory note of the
Optionee, secured by a pledge of the shares of Common Stock received upon
exercise of such Option, and having such other terms and conditions as
determined by the Committee;
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(c) by delivering a properly executed exercise notice together with
irrevocable instructions to a broker to sell shares acquired upon exercise
of the Option and promptly to deliver to the Company a portion of the
proceeds thereof equal to the exercise price; or
(d) any combination of any of the foregoing.
10. Option Exercises. Options shall be exercised by submitting to the
Company a signed copy of notice of exercise in a form to be supplied by the
Company. The exercise of an Option shall be effective on the date on which
the Company receives such notice at its principal corporate offices. The
Company may cancel such exercise in the event that payment is not effected
in full, subject to the other terms of this Plan.
11. Limited Transferability of Option. No Option shall be assignable or
transferable by the Optionee to whom it is granted, other than by will or
laws of descent and distribution, except that, upon approval by the
Committee, the Optionee may transfer an Option that is not intended to
constitute an ISO (a) pursuant to a qualified domestic relations order as
defined for purposes of the Employee Retirement Income Security Act of
1974, as amended, or (b) by gift: to a member of the Family (as defined
below) of the Optionee, to or for the benefit of one or more organizations
qualifying under Code Sec. 501(c)(3) and 170(c)(2) (a "Charitable
Organization") or to a trust for the exclusive benefit of the Optionee, one
or more members of the Optionees Family, one or more Charitable
Organizations, or any combination of the foregoing, provided that any such
transferee shall enter into a written agreement to be bound by the terms of
this Plan and the option agreement. For this purpose, Family shall mean
the ancestors, spouse, siblings, spouses of siblings, lineal descendants
and spouses of lineal descendants of the Optionee. During the lifetime of
an Optionee to whom an ISO is granted, only such Optionee (or, in the event
of legal incapacity or incompetence, the Optionee's guardian or legal
representative) may exercise the ISO.
12. Other Plan Terms.
(a) The Committee may grant more than one Option to an individual,
and, subject to the requirements of Section 422 of the Code with respect to
ISOs, such Option may be in addition to, in tandem with, or in substitution
for, Options previously granted under the Plan or of another corporation
and assumed by the Company.
(b) The Committee may permit the voluntary surrender of all or a
portion of any Option granted under the Plan or otherwise to be conditioned
upon the granting to the employee of a new Option for the same or a
different number of shares of Common Stock as the Option surrendered, or
may require such voluntary surrender as a condition precedent to a grant of
a new Option to such employee. Such new Option shall be exercisable at the
price, during the period, and in accordance with any other terms or
conditions specified by the Committee at the time the new Option is
granted, all determined in accordance with the provisions of the Plan
without regard to the price, period of exercise, or any other terms or
conditions of the Option surrendered.
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(c) Options under the Plan may be granted at any time after the Plan
has been approved by the shareholders of the Company. However, no Option
shall be granted under the Plan after December 31, 2009
(d) In the event of a reorganization, recapitalization, liquidation,
stock split, stock dividend, combination of shares, merger or
consolidation, or the sale, conveyance, lease or other transfer by the
Company of all or substantially all of its property, or any change in the
corporate structure or shares of common stock of the Company, pursuant to
any of which events the then outstanding shares of the common stock are
split up or combined or changed into, become exchangeable at the holders
election for, or entitle the holder thereof to other shares of common
stock, or in the case of any other transaction described in Section 424(a)
of the Code, the Committee may change the number and kind of shares of
Common Stock available under the Plan and any outstanding Option (including
substitution of shares of common stock of another corporation) and the
price of any Option and the fair market value determined under this Plan in
such manner as it shall deem equitable in its sole discretion.
(e) An Optionee or a legal representative thereof shall have none of
the rights of a stockholder with respect to shares of Common Stock subject
to Options until such shares shall be issued or transferred upon exercise
of the Option.
(f) The Company shall effect the grant of Options under the Plan, in
accordance with determinations made by the Committee, by execution of
instruments in writing in a form approved by the Committee. Each Option
shall contain such terms and conditions (which need not be the same for all
Options, whether granted at the time or at different times) as the
Committee shall deem to be appropriate and not inconsistent with the
provisions of the Plan, and such terms and conditions shall be agreed to in
writing by the Optionee.
13. Certain Definitions.
(a) Fair Market Value. As used in the Plan, the term fair market
value shall mean as of any date:
(i) if the Common Stock is not traded on any over-the-counter
market or on a national securities exchange, the value determined
by the Committee using the best available facts and
circumstances;
(ii) if the Common Stock is traded in the over-the-counter
market, based on most recent closing prices for the Common Stock
on the date the calculation thereof shall be made; or
(iii) if the Common Stock is listed on a national securities
exchange, based on the most recent closing prices for the Common
Stock of the Company on such exchange.
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(b) Subsidiary and Parent. The terms "subsidiary" and "parent" as
used in the Plan shall have the respective meanings set forth in Sections
424(f) and (e) of the Code.
14. Not an Employment Contract. Nothing in the Plan or in any Option or
stock option agreement shall confer on any Optionee any right to continue
in the service of the Company or any parent or subsidiary of the Company or
interfere with the right of the Company to terminate such Optionee's
employment or other services at any time.
15. Withholding Taxes.
(a) Whenever the Company proposes or is required to issue or transfer
shares of Common Stock under the Plan, the Company shall have the right to
require the Optionee to remit to the Company an amount sufficient to
satisfy any federal, state and/or local withholding tax requirements prior
to the delivery of any certificate or certificates for such shares.
Alternatively, the Company may, in its sole discretion from time to time,
issue or transfer such shares of Common Stock net of the number of shares
sufficient to satisfy the withholding tax requirements. For withholding
tax purposes, the shares of Common Stock shall be valued on the date the
withholding obligation is incurred.
(b) In the case of shares of Common Stock that an Optionee receives
pursuant to his exercise of an Option which is an ISO, if such Optionee
disposes of such shares of Common Stock within two years from the date of
the granting of the ISO or within one year after the transfer of such
shares of Common Stock to him, the Company shall have the right to withhold
from any salary, wages, or other compensation for services payable by the
Company to such Optionee, amounts sufficient to satisfy any withholding tax
obligation attributable to such disposition.
(c) In the case of a disposition described in paragraph (b), the
Optionee shall give written notice to the Company of such disposition
within 30 days following the disposition, which notice shall include such
information as the Company may reasonably request to effectuate the
provisions hereof.
16. Agreements and Representations of Optionees. As a condition to
the exercise of an Option, unless counsel to the Company opines that it is
not necessary under the Securities Act of 1933, as amended (the "Securities
Act"), and the pertinent rules thereunder, as the same are then in effect,
the Optionee shall represent in writing that the shares of Common Stock
being purchased are being purchased only for investment and without any
present intent at the time of the acquisition of such shares of Common
Stock to sell or otherwise dispose of the same.
17. Amendment and Discontinuance of the Plan. The Board may at any time
alter, suspend or terminate the Plan, but no change shall be made which
will have a materially adverse effect upon any Option previously granted,
unless the consent of the Optionee is obtained; provided, however, that the
Board may not without further approval of the shareholders, (i) increase
the maximum number of shares of Common Stock for which Options may be
granted under the Plan or which may be purchased by an individual Optionee,
(ii) decrease the minimum option price provided in the Plan, or (iii)
change the class of persons eligible to receive Options.
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18. Other Conditions.
(a) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to an Option
granted under the Plan is or may in the circumstances be unlawful under the
statutes, rules or regulations of any applicable jurisdiction, the Company
shall have no obligation to make such sale or delivery, and the Company
shall not be required to make any application or to effect or to maintain
any qualification or registration under the Securities Act or otherwise
with respect to shares of Common Stock or Options under the Plan, and the
right to exercise any such Option may be suspended until, in the opinion of
said counsel, such sale or delivery shall be lawful.
(b) At the time of any grant or exercise of any Option, the Company
may, if it shall deem it necessary or desirable for any reason connected
with any law or regulation of any governmental authority relative to the
regulation of securities, condition the grant and/or exercise of such
Option upon the Optionee making certain representations to the Company and
the satisfaction of the Company with the correctness of such
representations.
19. Approval; Effective Date; Governing Law. This Plan shall become
effective upon its adoption by the Board of Directors subject to its
approval by the stockholders of the Company at an annual meeting or any
special meeting of the stockholders of the Company within 12 months of
approval by the Board. This Plan shall be interpreted in accordance with
the internal laws of the State of Utah.
Approved by the Board of Directors:
/s/ Stephen Fey Date: October 5, 2000
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Approved by the Shareholders:
Date:
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