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2001 STOCK OPTION PLAN OF
LEGAL ACCESS TECHNOLOGIES, INC.
A Nevada Corporation
1. Purpose of the Plan
The purpose of this Plan is to strengthen Legal Access Technologies,
Inc. (hereinafter the "Company") by providing incentive stock
options as a means to attract, retain and motivate key corporate
personnel, through ownership of stock of the Company, and to attract
individuals of outstanding ability to render services to and enter
the employment of the Company or its subsidiaries.
2. Types of Stock Options
There shall be two types of Stock Options (referred to herein as
"Options" without distinction between such different types) that may
be granted under this Plan: (1) Options intended to qualify as
Incentive Stock Options under Section 422 of the Internal Revenue
Code ("Qualified Stock Options"), and (2) Options not specifically
authorized or qualified for favorable income tax treatment under the
Internal Revenue Code ("Non-Qualified Stock Options").
3. Definitions
The following definitions are applicable to the Plan:
(a) Board. The Board of Directors of the Company.
(b) Code. The Internal Revenue Code of 1986, as amended from time to time.
(c) Common Stock. The shares of Common Stock of the Company.
(d) Company. Legal Access Technologies, Inc., a Nevada corporation.
(e) Consultant. An individual or entity that renders professional
services to the Company as an independent contractor and is not
an employee or under the direct supervision and control of the
Company.
(f) Disabled or Disability. For the purposes of Section 7, a
disability of the type defined in Section 22(e)(3) of the Code.
The determination of whether an individual is Disabled or has a
Disability is determined under procedures established by the Plan
Administrator for purposes of the Plan.
(g) Fair Market Value. For purposes of the Plan, the "fair market
value" per share of Common Stock of the Company at any date shall
be: (a) if the Common Stock is listed on an established stock
exchange or exchanges or the NASDAQ National Market, the closing
price per share on the last trading day immediately preceding
such date on the principal exchange on which it is traded or as
reported by NASDAQ; or (b) if the Common Stock is not then listed
on an exchange or the NASDAQ National Market, but is quoted on
the NASDAQ Small Cap Market, the NASDAQ electronic bulletin board
or the National Quotation Bureau pink sheets, the average of the
closing
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bid and asked prices per share for the Common Stock as
quoted by NASDAQ or the National Quotation Bureau, as the case
may be, on the last trading day immediately preceding such date;
or (c) if the Common Stock is not then listed on an exchange or
the NASDAQ National Market, or quoted by NASDAQ or the National
Quotation Bureau, an amount determined in good faith by the Plan
Administrator.
(h) Incentive Stock Option. Any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(i) Non-Qualified Stock Option. Any Stock Option that is not an
Incentive Stock Option.
(j) Optionee. The recipient of a Stock Option.
(k) Plan Administrator. The board or a committee designated by the
Board pursuant to Section 4 to administer and interpret the terms
of the Plan.
(l) Stock Option. Any option to purchase shares of Common Stock
granted pursuant to Section 7.
4. Administration of the Plan
This Plan shall be administered by a "Compensation Committee" or
"Plan Administrator" composed of members selected by, and serving at
the pleasure of, the Board of Directors. Subject to the provisions
of the Plan, the Plan Administrator shall have authority to construe
and interpret the Plan, to promulgate, amend, and rescind rules and
regulations relating to its administration, to select, from time to
time, among the eligible employees and non-employee consultants (as
determined pursuant to Section 5) of the Company and its
subsidiaries those employees and consultants to whom Stock Options
will be granted, to determine the duration and manner of the grant
of the Options, to determine the exercise price, the number of
shares and other terms covered by the Stock Options, to determine
the duration and purpose of leaves of absence which may be granted
to Stock Option holders without constituting termination of their
employment for purposes of the Plan, and to make all of the
determinations necessary or advisable for administration of the
Plan. The interpretation and construction by the Plan Administrator
of any provision of the Plan, or of any agreement issued and
executed under the Plan, shall be final and binding upon all
parties. No member of the Committee or Board shall be liable for any
action or determination undertaken or made in good faith with
respect to the Plan or any agreement executed pursuant to the Plan.
All of the members of the Committee shall be persons who, in the
opinion of counsel to the Company, are outside directors and
"non-employee directors" within the meaning of Rule l6b-3(b)(3)(i)
promulgated by the Securities and Exchange Commission. From time to
time, the Board may increase or decrease the size of the Committee,
and add additional members to, or remove members from, the
Committee. The Committee shall act pursuant to a majority vote, or
the written consent of a majority of its members, and minutes shall
be kept of all of its meetings and copies thereof shall be provided
to the Board. Subject to the provisions of the Plan and the
directions of the Board, the Committee may establish and follow such
rules and regulations for the conduct of its business as it may deem
advisable.
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At the option of the Board, the entire Board of Directors of the
Company may act as the Plan Administrator during such periods of
time as all members of the Board are "outside directors" as defined
in Prop. Treas. Regs. 1.162-27(e)(3), except that this requirement
shall not apply during any period of time prior to the date the
Company's Common Stock becomes registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended.
5. Grant of Options
The Company is hereby authorized to grant Incentive Stock Options as
defined in section 422 of the Code to any employee or director
(including any officer or director who is an employee) of the
Company, or of any of its subsidiaries; provided, however, that no
person who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or any of its
parent or subsidiary corporations, shall be eligible to receive an
Incentive Stock Option under the Plan unless at the time such
Incentive Stock Option is granted the Option price is at least 110%
of the fair market value of the shares subject to the Option, and
such Option by its terms is not exercisable after the expiration of
five years frorn the date such Option is granted.
An employee may receive more than one Option under the Plan.
Non-Employee Directors shall be eligible to receive Non-Qualified
Stock Options in the discretion of the Plan Administrator. In
addition, Non-Qualified Stock Options may be granted to Consultants
who are selected by the Plan Administrator.
6. Stock Subject to Plan
The stock available for grant of Options under this Plan shall be
shares of the Company's authorized but unissued, or reacquired,
Common Stock. The aggregate sales price, or amount of securities
sold, during any 12 month period may not exceed the greater of: (1)
$1 million, (2) 15% of the total assets of the Company, or (3) 15%
of the issued and outstanding common stock of the company, including
shares previously issued under this Plan or other stock option plans
created by the Company, whichever is greater. The maximum number of
shares for which an Option may be granted to any Optionee during any
calendar year shall not exceed 250,000 shares. In the event that
any outstanding Option under the Plan for any reason expires or is
terminated, the shares of Common Stock allocable to the unexercised
portion of the Option shall again be available for Options under the
Plan as if no Option had been granted with regard to such shares.
7. Terms and Conditions of Options
Options granted under the Plan shall be evidenced by agreements
(which need not be identical) in such form and containing such
provisions that are consistent with the Plan as the Plan
Administrator shall from time to time approve. Such agreements may
incorporate all or any of the terms hereof by reference and shall
comply with and be subject to the following terms and conditions:
(a) Number of Shares. Each Option agreement shall specify the
number of shares subject to the Option.
(b) Option Price. The purchase price for the shares subject to any
Option shall be determined by the Plan Administrator at the time
of the grant, but shall not be less than 85% of Fair Market Value
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per share. Anything to the contrary notwithstanding, the purchase
price for the shares subject to any Incentive Stock Option shall
not be less than 100% of the Fair Market Value of the shares of
Common Stock of the Company on the date the Stock Option is
granted. In the case of any Option granted to an employee who
owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any of its
parent or subsidiary corporations, the Option price shall not be
less than 110% of the Fair Market Value per share of the Common
Stock of the Company on the date the Option is granted. For
purposes of determining the stock ownership of an employee, the
attribution rules of Section 424(d) of the Code shall apply.
(c) Notice and Payment. Any exercisable portion of a Stock Option
may be exercised only by: (a) delivery of a written notice to the
Company prior to the time when such Stock Option becomes
unexercisable herein, stating the number of shares bring
purchased and complying with all applicable rules established by
the Plan Administrator; (b) payment in full of the exercise price
of such Option by, as applicable, delivery of: (i) cash or check
for an amount equal to the aggregate Stock Option exercise price
for the number of shares being purchased, (ii) in the discretion
of the Plan Administrator, upon such terms as the Plan
Administrator shall approve, a copy of instructions to a broker
directing such broker to sell the Common Stock for which such
Option is exercised, and to remit to the Company the aggregate
exercise price of such Stock Option (a "cash1ess exercise"), or
(iii) in the discretion of the Plan Administrator, upon such
terms as the Plan Administrator shall approve, shares of the
Company's Common Stock owned by the Optionee, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of
delivery equal to the aggregate purchase price of the shares with
respect to which such Stock Option or portion is thereby
exercised (a "stock-for-stock exercise"); (c) payment of the
amount of tax required to be withheld (if any) by the Company, or
any parent or subsidiary corporation as a result of the exercise
of a Stock Option. At the discretion of the Plan Administrator,
upon such terms as the Plan Administrator shall approve, the
Optionee my pay all or a portion of the tax withholding by: (i)
cash or check payable to the Company, (ii) a cashless exercise,
(iii) a stock-for-stock exercise, or (iv) a combination of one or
more of the foregoing payment rnethods; and (d) delivery of a
written notice to the Company requesting that the Company direct
the transfer agent to issue to the Optionee (or his designee) a
certificate for the number of shares of Common Stock for which
the Option was exercised or, in the case of a cashless exercise,
for any shares that were not sold in the cashless exercise.
Notwithstanding the foregoing, the Company, in its sole
discretion, may extend and maintain, or mange for the extension
and maintenance of credit to any Optionee to finance the
Optionee's purchase of shares pursuant to the exercise of any
Stock Option, on such terms as may be approved by the Plan
Administrator, subject to applicable regulations of the Federal
Reserve Board and any other laws or regulations in effect at the
time such credit is extended.
(d) Terms of Option. No Option shall be exercisable after the
expiration of the earliest of: (a) ten years after the date the
Option is granted, (b) three months after the date the Optionee's
employment with the Company and its subsidiaries terminates, or a
Non-Employee Director or Consultant ceases to provide services to
the Company, if such termination or cessation is for any reason
other than Disability or death, (c) one year after the date the
Optionee's employment with the Company, and its subsidiaries,
terminates, or a Non-Employee Director or Consultant ceases to
provide services to the Company, if such termination or cessation
is a result of death or Disability; provided, however, that the
Option agreement for any Option may provide for shorter periods
in each of the foregoing instances. In the case of an Incentive
Stock Option granted to an
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employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, or
any of its parent or subsidiary corporations, the term set forth in
(a) above shall not be more than five years after the date the Option
is granted.
(e) Exercise of an Option. No Option shall be exercisable during
the lifetime of the Optionee by any person other than the
Optionee. Subject to the foregoing, the Plan Administrator shall
have the power to set the time or times within which each Option
shall be exercisable and to accelerate the time or times of
exercise; provided however, the Option shall provide the right to
exercise at the rate of at least 20% per year over five years
from the date the Option is granted. Unless otherwise provided by
the Plan Administrator, each Option granted under the Plan shall
become exercisable on a cumulative basis as to one-third (1/3) of
the total number of shares covered thereby at any time after one
year from the date the Option is granted and an additional
one-third (1/3) of such total number of shares at any time after
the end of each consecutive one-year period thereafter until the
Option has become exercisable as to all of such total number of
shares. To the extent that an Optionee has the right to exercise
an Option and purchase shares pursuant hereto, the Option may be
exercised from time to time by written notice to the Company,
stating the number of shares being purchased and accompanied by
payment in full of the exercise price for such shares.
(f) No Transfer of Option. No Option shall be transferable by an
Optionee otherwise than by will or the laws of descent and
distribution.
(g) Limit on Incentive Stock Option. The aggregate Fair Market
Value (determined at the time the Option is granted) of the stock
with respect to which an Incentive Stock Option is granted and
exercisable for the first time by an Optionee during any calendar
year (under all Incentive Stock Option plans of the Company and
its subsidiaries) shall not exceed $100,000. To the extent the
aggregate Fair Market Value (determined at the time the Stock
Option is granted) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an
Optionee during any calendar year (under all Incentive Stock
Option plans of the Company and any parent or subsidiary
corporations) exceeds $100,000, such Stock Options shall be
treated as Non-Qualified Stock Options. The determination of
which Stock Options shall be treated as Non-Qualified Stock
Options shall be made by taking Stock Options into account in the
Order in which they were granted.
(h) Restriction on Issuance of Shares. The issuance of Options and
shares shall be subject to compliance with all of the applicable
requirements of law with respect to the issuance and sale of
securities, including, without limitation, any required
qualification under state securities laws. If an Optionee
acquires shares of Common Stock pursuant to the exercise of an
Option, the Plan Administrator, in its sole discretion, may
require as a condition of issuance of shares covered by the
Option that the shares of Common Stock be subject to restrictions
on transfer. The Company may place a legend on the share
certificates reflecting the fact that they are subject to
restrictions on transfer pursuant to the terms of this Section.
In addition, the Optionee may be required to execute a buy-sell
agreement in favor of the Company or its designee with respect to
all or any of the shares so acquired. In such event, the terms of
any such agreement shall apply to the optioned shares.
(i) Investment Representation. Any Optionee may be required, as a
condition of issuance of shares covered by his or her Option, to
represent that the shares to be acquired pursuant to exercise
will
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be acquired for investment and without a view toward
distribution thereof, and in such case, the Company may place a
legend on the share certificate(s) evidencing the fact that they
were acquired for investment and cannot be sold or transferred
unless registered under the Securities Act of 1933, as amended,
or unless counsel for the Company is satisfied that the
circumstances of the proposed transfer do not require such
registration.
(j) Rights as a Shareholder or Employee. An Optionee or transferee
of an Option shall have no right as a stockholder of the Company
with respect to any shares covered by any Option until the date
of the issuance of a share certificate for such shares. No
adjustment shall be made for dividends (Ordinary or
extraordinary, whether cash, securities, or other property), or
distributions or other rights for which the record date is prior
to the date such share certificate is issued, except as provided
in paragraph (m) below. Nothing in the Plan or in any Option
agreement shall confer upon any employee any right to continue in
the employ of the Company or any of its subsidiaries or interfere
in any way with any right of the Company or any subsidiary to
terminate the Optionee's employment at any time.
(k) No Fractional Shares. In no event shall the Company be required
to issue fractional shares upon the exercise of an Option.
(l) Exercise in the Event of Death. In the event of the death of
the Optionee, any Option or unexercised portion thereof granted
to the Optionee, to the extent exercisable by him or her on the
date of death, may be exercised by the Optionee's personal
representatives, heirs, or legatees subject to the provisions of
paragraph (d) above.
(m) Recapitalization or Reorganization of the Company. Except as
otherwise provided herein, appropriate and proportionate
adjustments shall be made (1) in the number and class of shares
subject to the Plan, (2) to the Option rights granted under the
Plan, and (3) in the exercise price of such Option rights, in the
event that the number of shares of Common Stock of the Company
are increased or decreased as a result of a stock dividend (but
only on Common Stock), stock split, reverse stock split,
recapitalization, reorganization, merger, consolidation,
separation, or like change in the corporate or capital structure
of the Company. In the event there shall be any other change in
the number or kind of the outstanding shares of Common Stock of
the Company, or any stock or other securities into which such
common stock shall have been changed, or for which it shall have
been exchanged, whether by reason of a complete liquidation of
the Company or a merger, reorganization, or consolidation with
any other corporation in which the Company is not the surviving
corporation, or the Company becomes a wholly-owned subsidiary of
another corporation, then if the Plan Administrator shall, in its
sole discretion, determine that such change equitably requires an
adjustment to shares of Common Stock currently subject to Options
under the Plan, or to prices or terms of outstanding Options,
such adjustment shall be made in accordance with such
determination.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustment shall be made by the
Plan Administrator, the determination of which in that respect
shall be final, binding, and conclusive. No right to purchase
fractional shares shall result from any adjustment of Options
pursuant to this Section. In case of any such adjustment, the
shares subject to the Option shall he rounded down to the nearest
whole share. Notice of any adjustment shall be given by the
Company to each Optionee whose Options shall have been so
adjusted and such
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adjustment (whether or not notice is given) shall be effective and
binding for all purposes of the Plan.
In the event of a complete liquidation of the Company or a
merger, reorganization, or consolidation of the Company with any
other corporation in which the Company is not the surviving
corporation, or the Company becomes a wholly-owned subsidiary of
another corporation, any unexercised Options granted under the
Plan shall be deemed cancelled unless the surviving corporation
in any such merger, reorganization, or consolidation elects to
assume the Options under the Plan or to issue substitute Options
in place thereof; provided, however, that notwithstanding the
foregoing, if such Options would be cancelled in accordance with
the foregoing, the Optionee shall have the right exercisable
during a ten-day period ending on the fifth day prior to such
liquidation, merger, or consolidation to exercise such Option in
whole or in part without regard to any installment exercise
provisions in the Option agreement.
(n) Modification, Extension and Renewal of Options. Subject to the
terms and conditions and within the limitations of the Plan, the
Plan Administrator may modify, extend or renew outstanding
options granted under the Plan and accept the surrender of
outstanding Options (to the extent not theretofore exercised).
The Plan Administrator shall not, however, without the approval
of the Board, modify any outstanding Incentive Stock Option in
any manner that would cause the Option not to qualify as an
Incentive Stock Option within the meaning of Section 422 of the
Code. Notwithstanding the foregoing. no modification of an Option
shall, without the consent of the Optionee, alter or impair any
rights of the Optionee under the Option.
(o) Other Provisions. Each Option may contain such other terms,
provisions, and conditions not inconsistent with the Plan as may
be determined by the Plan Administrator.
8. Termination or Amendment of the Plan
The Board may at any time terminate or amend the Plan; provided
that, without approval of the holders of a majority of the shares of
Common Stock of the Company represented and voting at a duly held
meeting at which a quorum is present or the written consent of a
majority of the outstanding shares of Common Stock, there shall be
(except by operation of the provisions of paragraph (m) above) no
increase in the total number of shares covered by the Plan, no
change in the class of persons eligible to receive options granted
under the Plan, no reduction in the exercise price of Options
granted under the Plan, and no extension of the latest date upon
which Options may be exercised; and provided further that, without
the consent of the Optionee, no amendment may adversely affect any
then outstanding Option or any unexercised portion thereof.
9. Indemnification
In addition to such other rights of indemnification as they may have
as members of the Board Committee that administers the Plan, the
members of the Plan Administrator shall be indemnified by the
Company against reasonable expense, including attorney's fees,
actually and necessarily incurred in connection with the defense of
any action, suit or proceeding, or in connection with any appeal
therein to which they, or any of them, may be a party by reason of
any action taken or failure to act under or in connection with the
Plan or any Option granted thereunder, and against any and all
amounts paid by them in settlement thereof (provided such settlement
is approved by independent
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legal counsel selected by the Company). In addition, such members shall
be indemnified by the Company for any amount paid by them in satisfaction
of a judgment in any action, suit, or proceeding, except in relation to
matters as to which it shall have been adjudged that such member is liable
for negligence or misconduct in the performance of his or her duties,
provided however that within 60 days after institution of any such action,
suit, or proceeding, the member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the same.
10. Effective Date and Term of the Plan
This Plan shall become effective (the "Effective Date") on the date
of adoption by the board of directors as evidenced by the date and
signature below. Options granted under the Plan prior to
shareholder approval are subject to cancellation by the Plan
Administrator if shareholder approval is not obtained within 12
months of the date of adoption. Unless sooner terminated by the
Board in its sole discretion, this Plan will expire on December 31,
2010.
IN WITNESS WHEREOF, the Company by its duly authorized officer, has
caused this Plan to be executed this 15th day of June 2001.
LEGAL ACCESS TECHNOLOGIES, INC.
/s/ Michael Cane
- ---------------------------
By: Michael Cane
Its: President
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