EXHIBIT 4.1
2003 STOCK COMPENSATION PLAN I
THIS COMPENSATION PLAN is adopted this 1st day of June, 2003, by PocketSpec
Technologies Inc., a Colorado corporation with its principal place of business
being located at 3225 East 2nd Ave., Denver, Colorado 80206.
WITNESSETH:
WHEREAS, the Board of Directors of PocketSpec Technologies Inc., (the
"Company") has determined that it would be to its advantage, and in its best
interests, to grant certain consultants and advisors, as well as certain
employees, the opportunity to purchase stock in the Company as a result of
compensation for their service; and
WHEREAS, the Board of Directors (the "Board") believes that the Company can
best obtain advantageous benefits by issuing stock and/or granting stock options
to such designated individuals from time to time, although these options are not
to be granted pursuant to Section 422 and related sections of the Internal
Revenue Code as amended;
NOW THEREFORE, the Board adopts this as the 2003 COMPENSATION PLAN I (the
"Plan").
1.00 EFFECTIVE DATE AND TERMINATION OF PLAN
The effective date of the Plan is June 1, 2003, which is the day the Plan
was adopted by the Board. The Plan will terminate on the earlier of the date of
the grant of the final option for the last share of common stock allocated under
the Plan or ten years from the date thereof, whichever is earlier, and no
options will be granted thereafter pursuant to this Plan.
2.00 ADMINISTRATION OF PLAN
The Plan shall be administered by the Board, which may adopt such rules and
regulations for its administration as it may deem necessary or appropriate, or
may be administered by a Compensation Committee to be appointed by the Board, to
have such composition and duties as the Board may from time to time determine.
3.00 ELIGIBILITY TO PARTICIPATE IN THE PLAN
3.01 Subject to the provisions of the Plan, the Board, or its designee,
shall determine and designate, from time to time those consultants, advisors,
and employees of the Company, or consultants, advisors, and employees of a
parent or subsidiary corporation of the Company, to whom shares are to be issued
and/or options are to be granted hereunder and the number of shares to be
optioned from time to time to any individual or entity. In determining the
eligibility of an individual or entity to receive shares or an option, as well
as in determining the number of shares to be issued and/or optioned to any
individual or entity, the Board, or its designee, shall consider the nature and
value to the Company for the services which have been rendered to the Company
and such other factors as the Board, or its designee, may deem relevant.
3.02 To be eligible to be selected to receive an option, an individual must
be a consultant, advisor or an employee of the Company or a consultant, advisor,
or an employee of a parent or subsidiary Corporation of the Company. The grant
of each option shall be confirmed by a Stock Option Agreement which shall be
executed by the Company and the optionee as promptly as practicable after such
grant. More than one option may be granted to an individual or entity. Shares
shall be issued directly to such entities.
3.03 An option may be granted to any individual or entity eligible
hereunder, regardless of his previous stockholdings.
3.04 The option price (determined as of the time the option is granted) of
the stock for which any person may be granted options under this Plan (and all
other plans of the Company) may be increased or reduced by the Board, or its
designee, from time to time.
4.00 NUMBER OF SHARES SUBJECT TO THE PLAN
The Board, prior to the time shall reserve for the purposes of the Plan a
total of One Million (1,000,000) of the authorized but unissued shares of common
shares of the Company, provided that any shares as to which an option granted
under the Plan remains unexercised at the expiration thereof may be the subject
of the grant of further options under the Plan within the limits and under the
terms set forth in Article 3.00 hereof.
5.00 PRICE OF COMMON SHARES
The initial and standard price per share of common stock to be issued
directly or by option shall be the Fair Market Value per share but may be
changed in each case by the Board, or its designee, from time to time. If the
share price is changed, the Board, or its designee, shall determine the share
price no later than the date of the issuance of the shares and/or the grant of
the option and at such other times as the Board, or its designee, deems
necessary. The Board shall have absolute final discretion to determine the price
of the common stock under the Plan. In the absence of such specific
determination, the share price will be the Fair Market Value per share. "Fair
Market Value" shall mean, if there is an established market for the Company's
Common Stock on a stock exchange, in an over-the-counter market or otherwise,
the average Closing Price of the Company's stock for the 10 consecutive trading
days immediately before the valuation date, provided that the Board may, in its
discretion provide an alternative definition for Fair Market Value in the
instrument granting the right or option. Unless otherwise specified by the Board
at the time of grant (or in the formula applicable to such grant), the valuation
date for purposes of determining the option price shall be the date of grant.
The Board may specify that, instead of the date of grant, the valuation date
shall be a valuation period of up to ninety (90) days prior to the date of
grant, and Fair Market Value for purposes of such grant shall be the average
over the valuation period of the mean of the highest and lowest quoted selling
prices on each date on which sales were made in the valuation period. If there
is no established market for the Company's Common Stock, or if there were no
sales during the applicable valuation period, the determination of Fair Market
Value shall be established by the Board in its sole discretion, considering the
criteria set forth in Treas. Reg. Section 20.2031-2 or successor regulations.
6.00 SUCCESSIVE OPTIONS
Any option granted under this Plan to a person may be exercisable at such
person's discretion while there is outstanding any other stock option previously
granted to such person, whether under this Plan or any other stock option plan
of the Company.
7.00 PERIOD AND EXERCISE OF OPTION
7.01. Options granted under this Plan shall expire on the first to occur of
the following dates whether or not exercisable on such dates: (i) five (5) years
from the date the option is initially granted; (ii) six (6) months from the date
the person ceases employment due to permanent and total disability; (iii) the
date of termination of employment for reasons other than retirement, permanent
and total disability or death, unless the Board determines, in its sole
discretion, that it would be in the best interest of the Company to extend the
options for a period not to exceed three (3) years; or (iv) three (3) months
from the date the employee retires with permission of the Board.
7.02. Notwithstanding Section 7.01, any portion of any option which has not
become exercisable pursuant to Section 7.03 prior to the death of the employee
or termination of employment shall expire on the employee's date of death or
termination date, if termination is for reasons other than retirement or total
and permanent disability.
7.03. Any option granted under this Plan may be immediately exercised by
the holder thereof. Such an option may be exercised in whole or in part at the
time it becomes exercisable or from time to time thereafter, until the
expiration of the option.
8.00 PAYMENT FOR OPTIONED SHARES
When a person holding an option granted under this Plan exercises any
portion of the option he shall pay the full option price for the shares covered
by the exercise of that portion of his option within one (1) month after such
exercise. As soon as practicable, after the person notifies the Company of the
exercise of his option and makes payment of the required option price, the
Company shall issue such shares to the person. The Board may also permit a
participant to effect a cashless or net exercise of an option without tendering
any shares of the Company's stock as payment for the option. In such an event,
the participant will be deemed to have paid for the exercise of the option with
shares of the Company's stock and shall receive from the Company a number of
shares equal to the difference between (i) the shares that would have been
tendered to pay the option price and withholding taxes, if any, and (ii) the
number of options exercised. The Board may also cause the Company to enter into
arrangements with one or more licensed stock brokerage firms whereby
participants may exercise options without payment therefor but with irrevocable
orders to such brokerage firm to immediately sell the number of shares necessary
to pay the option price and withholding taxes, if any, and then to transmit the
proceeds from such sales directly to the Company in satisfaction of such
obligations.
9.00 RESTRICTIONS ON TRANSFER
9.01 No right or privilege of any person under the Plan shall be
transferable or assignable, except to the person's personal representative in
the event of the person's death, and except as provided in Section 9.02, options
granted hereunder are exercisable only by the person during his life.
9.02 If a person dies holding outstanding options issued pursuant to this
Plan, his personal representative shall have the right to exercise such options
only within one year of the death of the person.
10.00 RECLASSIFICATION, CONSOLIDATION OR MERGER
If and to the extent that the number of issued shares of common stock of
the Company shall be increased or reduced by change in par value, split-up
reclassification, distribution of a dividend payable in stock, or the like, the
number of shares subject to direct issuance or an option held by a person and
the option price per share shall be proportionately adjusted. If the Company is
reorganized or consolidated or merged with another corporation, the person shall
be entitled to receive direct issuance or options covering shares of such
reorganized, consolidated, or merged company in the same proportion, at an
equivalent price, and subject to the same conditions.
11.00 DISSOLUTION OR LIQUIDATION
Upon the dissolution or liquidation of the Company, the options granted
hereunder shall terminate and become null and void, but the person shall have
the right immediately prior to such dissolution or liquidation to exercise any
options granted and exercisable hereunder to the full extent not before
exercised.
12.00 BINDING EFFECT
This Plan shall inure to the benefit of and be binding upon the Company and
its employees, and their respective heirs, executors, administrators, successors
and assigns.
13.00 ADOPTION OF PLAN
This Plan has been duly adopted by the Board of Directors of the Company on
June 1, 2003.
14.00 NOTICES
Any notice to be given to the Company under the terms of this plan shall be
addressed to such address as is set forth on the first page hereof.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed on its
behalf by its President, to be sealed by its corporate seal, and attested by its
Secretary effective the day and year first above written.
PocketSpec Technologies Inc.
By /s/ F. JEFFREY KRUPKA
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F. Jeffrey Krupka
President
ATTEST:
///Signed///
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Secretary (SEAL)