TECHALT, INC.
2005 STOCK OPTION PLAN
1. Purpose. The purpose of this Plan is to provide additional incentives
to key employees, officers, directors and independent contractors of TECHALT,
INC., and any Parent or Subsidiary it may at any time have, thereby helping to
attract and retain the best available personnel for positions of responsibility
with those entities and otherwise promoting the success of the business
activities of such entities. It is intended that Options issued under this Plan
constitute either incentive stock options or nonqualified stock options.
2. Definitions. As used herein, the following definitions apply:
(a) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Board" means the Board of Directors of the Company.
(c) "Change of Control Event" shall mean the occurrence of any of
the following events: (i) the acquisition at any time (excluding any
acquisition in connection with any public offering of equity securities of
the Company pursuant to a registration statement filed under the
Securities Act or any acquisition by management personnel, directly or
indirectly) by a "person" or "group" (as used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (excluding, for this purpose, the Company or any Subsidiary or any
employee benefit plan of the Company or any Subsidiary) of the beneficial
ownership (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities representing fifty percent (50%) or
more of the combined voting power of the then-outstanding securities of
the Company, (ii) the acquisition at any time (excluding any acquisition
in connection with any public offering of equity securities of the Company
pursuant to a registration statement filed under the Securities Act or any
acquisition by management personnel, directly or indirectly) by a "person"
or "group" (as used in Sections 13(d) and 14(d)(2) of the Exchange Act) of
equity securities that have the voting authority to appoint a majority of
the persons on the Company's Board of Directors, (iii) the Company
consolidates with, or merges with or into, another entity (other than a
Parent or Subsidiary in a transaction which is not otherwise a Change of
Control Event), or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any person or
entity, or any entity consolidates with, or merges with or into the
Company, in any such event pursuant to a transaction in which the
outstanding voting stock of the Company is converted into or exchanged for
cash, securities or other property, and as a result of which immediately
following such transaction the shareholders of the Company shall not hold,
directly or indirectly, a majority of the voting power of the
then-outstanding securities of the surviving entity, (iv) during any
consecutive two-year period commencing on or after June 1, 2006,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election
by such Board or whose nomination for election by the shareholders of the
Company, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in
office, or (v) a liquidation or dissolution of the Company (other than a
liquidation into a parent or Subsidiary that is not otherwise a Change of
Control Event).
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" means the Company's common stock.
(f) "Committee" means the Board or the Committee appointed by the
Board in accordance with Section 4(a).
(g) "Company" means TechAlt Inc., a Nevada corporation and its
successors.
(h) "Continuous Relationship with the Company" means (i) with
respect to an employee of the Company, the absence of any interruption or
termination of such person's employment with the Company, its Parent or
Subsidiary, or (ii) with respect to an Independent Contractor, the absence
of any interruption or termination of such person's service as an
Independent Contractor to the Company; Continuous Relationship with the
Company will not be considered interrupted in the case of sick leave,
military leave, or any other approved leave of absence.
(i) "Date of Grant" shall mean the day and year written in the Stock
Option Agreement relating to such Option. The Date of Grant for an Option
granted to an Employee may be any date on or after the Employee's first
day of employment with the Company, even if such date is prior to the
effective date of this Plan. The Date of Grant for an Option granted to an
Independent Contractor may be any date on or after the date the
Independent Contractor began performing services for the Company, even if
such date is prior to the effective date of this Plan.
(j) "Employee" means any person employed by or serving as an
employee, officer of the Company or any Subsidiary or Parent of the
Company (as such terms are defined in Section 424 of the Code) that is
hereafter organized or acquired by the Company.
(k) "Incentive Stock Option" has the meaning set forth in Section
422(b) of the Code.
(l) "Independent Contractor" shall mean any person performing
services for the Company or for any "Subsidiary" or "Parent" of the
Company other than as an Employee, including, but not limited to, persons
acting as a Non-Employee Director or acting on any board of advisors to
the Company; and references to performing services for the Company shall
be deemed to include the Company and/or any Subsidiary or Parent of the
Company, as the context may require.
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(m) "Non-Employee Director" has the meaning set forth in Rule 16b-3
under the 1934 Act.
(n) "Non-qualified Stock Option" shall mean an option which is not
an Incentive Stock Option.
(o) "Option" means a stock option granted under the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option.
(q) "Optionee" means any person who receives an Option.
(r) "Parent" means a "Parent Corporation" as defined in Section 424
of the Code.
(s) "Plan" means this 2005 Stock Option Plan and any additional
amendments.
(t) "Securities Act" means the Securities Act of 1933, as amended.
(u) "Stock Option Agreement" means an agreement executed by an
officer of the Company and an Employee or Independent Contractor, as
appropriate, evidencing the grant of an Option.
(v) "Subsidiary" means a "Subsidiary Corporation" as defined in
Section 424 of the Code.
Where appropriate, words used in the Plan in the singular may mean
the plural, the plural may mean the singular and the masculine may mean
the feminine.
3. Stock Subject to Options.
(a) Number of Shares Reserved. The maximum number of shares that may
be optioned and sold under the Plan is the greater of (i) five million
(5,000,000) shares of Common Stock of the Company, subject to adjustment
as provided in Section 6(j), or (ii) twenty percent (20%) of the total
number of shares of Common Stock that would be outstanding if each class
of the Company's stock (including each class of preferred stock) were
converted into shares of Common Stock. During the term of this Plan, the
Company shall at all times reserve and keep available a sufficient number
of authorized but unissued shares of its Common Stock to satisfy the
requirements of the Plan. Notwithstanding the foregoing, in no event shall
the number of shares of Common Stock which may be issued upon the exercise
of Incentive Stock Options exceed five million (5,000,000) shares, subject
to the adjustment provided in Section 6(j).
(b) Expired Options. If any outstanding Option expires or becomes
unexercisable for any reason without having been exercised in full, the
shares of Common Stock allocable to the unexercised portion of such Option
will again become available for other Option grants.
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4. Administration of the Plan.
(a) The Committee. The Plan is administered by the Board directly,
acting as a Committee of the whole, or if the Board elects, by a separate
Committee appointed by the Board for that purpose and consisting of at
least two Board members, all of who shall be Non-Employee Directors. All
references in the Plan to the "Committee" are to such separate Committee,
if any is established, or if none is then in existence, then to the Board
as a whole. Once appointed, any such 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 thereto,
remove members (with or without cause), appoint new members in
substitution therefor, and fill vacancies (however caused). At all times,
the Board has the power to remove all members of the Committee and
thereafter to directly administer the Plan as a Committee of the whole.
(b) Meetings; Reports. The Committee shall select one of its members
as chairman, and hold meetings at such times and places as the chairman or
a majority of the Committee may determine. All actions of the Committee
shall be either by:
(1) a majority vote of the members of the full Committee at a
meeting of the Committee, or
(2) by unanimous written consent of all members of the full
Committee without a meeting.
At least annually, the Committee shall present a written report to the
Board indicating the persons to whom Options have been granted since the
date of the last such report, and in each case the date or dates of
Options granted, the number of shares optioned, and the Option price per
share.
(c) Powers of the Committee. Subject to all provisions and
limitations of the Plan, the Committee has the authority and discretion
to:
(1) Determine the persons to whom Options are to be granted,
the times of grant, the number of shares to be represented by each
Option, and the vesting schedule of the Options;
(2) Interpret the Plan (but only to the extent not contrary to
the express provisions of the Plan);
(3) Authorize any person or persons to execute and deliver
Stock Option Agreements or to take any other actions deemed by the
Committee to be necessary or appropriate to effectuate the grant of
Options by the Committee; and
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(4) Make all other determinations and take all other actions
that the Committee deems necessary or appropriate to administer the
Plan in accordance with its terms and conditions.
(d) Final Authority; Limitation of Liability. The Committee's
decisions, determinations and interpretations are final and binding on all
persons, including all Optionees and any other holders or persons
interested in any Options, unless otherwise expressly determined by a vote
of the majority of the entire Board. No member of the Committee or of the
Board may be held liable for any action or determination made in good
faith with respect to the Plan or any Option.
(e) Approval of Grants to Committee Composed of Non-Employee
Directors. Any grant of Options to a member of a Committee composed of
Non-Employee Directors shall be approved of by the full Board of
Directors. The full Board of Directors shall then be construed as the
Committee for purposes of administering the Plan with respect to such
Options.
5. Eligibility; Limitation of Rights. The grant of Options under the Plan
is entirely discretionary with the Committee, and the adoption of the Plan does
not confer upon any person any right to receive any Option or Options unless and
until granted by the Committee, in its sole discretion. Neither the adoption of
the Plan nor the grant of any Options to any person or Optionee will confer any
right to continued employment, nor shall the same interfere in any way with that
person's right or that of the Company (or any Parent or Subsidiary) to terminate
the person's employment at any time.
6. Option Terms; Conditions. All Option grants under the Plan shall be (i)
approved by the Committee, and (ii) documented by a Stock Option Agreement in
such form as the Committee approves from time to time. All Stock Option
Agreements shall comply with, and are subject to the following terms and
conditions:
(a) Number of Shares. Each Stock Option Agreement shall state the
number of shares subject to Option. Any number of Options may be granted
to a single eligible person at any time and from time to time, subject to
the maximum number of Options available for granting pursuant to this
Plan.
(b) Exercise Price. The exercise price ("Exercise Price") of the
Option shall be determined by the Committee subject to its own discretion,
it being understood that the price so determined by the Committee may vary
from one Eligible Participant to another. The Stock Option Agreement shall
state the price per share of Common Stock at which the Option is
exercisable. The Exercise Price shall be fixed by the Committee at what
ever price the Committee may determine in the exercise of its sole
discretion, provided that:
(1) The per share Exercise Price for any Option granted to an
Optionee shall not be less than the fair market value per share of
the Common Stock on the Date of Grant thereof as reasonably
determined by the Committee;
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(2) With respect to Incentive Stock Options granted to
greater-than-ten-percent shareholders of the Company or the Parent
of the Company, the exercise price per share shall not be less than
one hundred ten percent (110%) of the fair market value per share of
the Common Stock on the Date of Grant thereof as reasonably
determined by the Committee;
(3) The Options granted in substitution for outstanding
options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other
reorganization involving such other corporation and the Company or
any subsidiary of the Company may be granted with an Exercise Price
equal to the exercise price for the substituted option of the other
corporation, subject to any adjustment consistent with the terms of
the transaction pursuant to which the substituted option is to be
issued; and
(4) The Incentive Stock Options granted to the Employee to the
extent that the fair market value of the Shares which are
exercisable for the first time by any Optionee during any calendar
year exceeds $100,000, such Options shall be treated as Options
which are not Incentive Stock Options.
(c) Consideration; Manner of Exercise. The Exercise Price shall be
payable either (i) in U.S. dollars, or (ii) if approved by the Board, in
other consideration, including, without limitation, Common Stock of the
Company or other property. An Option is deemed to be exercised when
written notice of exercise has been given to the Company in accordance
with the terms of the Option by the person entitled to exercise the
Option, together with full payment of the Exercise Price for the shares of
Optioned Stock subject to said notice.
(d) Term of Option. Under no circumstances may an Option granted
under the Plan be exercisable after the expiration of ten (10) years from
the date on which such Option is granted. The term in which each Option
may be exercised ("Exercise Period") shall be determined by the Committee
in its discretion, and set forth in the Stock Option Agreement.
(e) Date of Grant; Vesting; Holdings Period. The Date of Grant of an
Option, for all purposes, is the date the Committee makes the
determination granting the Option or such future date as may be set forth
in the Stock Option Agreement. Shares of Common Stock obtained upon the
exercise of any Option may not be sold by any Optionee that is subject to
Section 16 of the 1934 Act until six (6) months have elapsed since the
Date of Grant of the Option. The vesting schedule for all Options shall be
determined by the Committee in its discretion and shall be stated in the
Stock Option Agreement.
(f) Death of Optionee. Unless otherwise stated in the Stock Option
Agreement, in the event of the death during the Exercise Period of an
Optionee who was then an Employee or Independent Contractor, the unvested
portion of the Option held by such Optionee shall terminate on the date of
the Optionee's death. The unexercised and vested portion of the Option
that is an Incentive Stock Option may be exercised by the Optionee's
estate within one (1) year of the death of the Optionee, whereafter, the
remaining unexercised portion of such Option shall terminate. The
unexercised and vested portion of the deceased Optionee's Option that is a
Non-Qualified Option may be exercised until the last day of the fifteenth
(15th) calendar month following the month in which death of the Optionee
occurs, whereafter, the remaining unexercised portion of such Option shall
terminate. Under these circumstances, the Option will be exercisable by
the Optionee's estate, or by such person or persons who have acquired the
right to exercise the Option by bequest or by inheritance or by reason of
the Optionee's death. Any Optioned Stock subject to the unvested portion
of an Option shall revert back into the pool of Common Stock available for
issuance under the Plan and shall be available for grant pursuant to a new
Option.
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(g) Disability of Optionee. Unless otherwise stated in the
Stock Option Agreement, if an Optionee's status as an Employee or
Independent Contractor is terminated at any time during the Exercise
Period by reason of the disability of the Optionee within the
meaning of Section 22(e)(3) of the Code, the unvested portion of the
Option held by such Optionee shall terminate on the date of
termination of the Optionee's employment or status as an Independent
Contractor (such date being the "Date of Disability"). The
unexercised and vested portion of the Option that is an Incentive
Stock Option may be exercised by the Optionee within one (1) year of
the Date of Disability, whereafter, the remaining unexercised
portion of such Option shall terminate. The unexercised and vested
portion of the Option that is a Non-Qualified Stock Option may be
exercised by the Optionee until the last day of the fifteenth (15th)
calendar month following the month in which the Date of Disability
occurs, whereafter, the remaining unexercised portion of such Option
shall terminate. Any Optioned Stock subject to the unvested portion
of an Option shall revert back into the pool of Common Stock
available for issuance under the Plan and shall be available for
grant pursuant to a new Option.
(h) Termination of Status as an Employee or Independent
Contractor.
(1) Unless otherwise stated in the Stock Option
Agreement, if an Optionee's status as an Employee or
Independent Contractor is terminated by the Optionee at any
time after the Date of Grant for any reason other than death
or disability, as provided in Sections 6(f) and 6(g) hereof,
then the unexercised and vested portion of an Option shall
terminate ninety (90) days following the date on which
Optionee's termination of status as an Employee or Independent
Contractor occurs, as applicable. Any Optioned Stock subject
to the unvested portion of an Option shall revert back into
the pool of Common Stock available for issuance under the Plan
and shall be available for grant pursuant to a new Option.
(2) Unless otherwise stated in the Stock Option
Agreement, if an Optionee's status as an Employee or
Independent Contractor is terminated by the Company, and such
termination is for "cause" (such termination being referred to
as a "Termination for Cause") at any time after the grant of
an Option by the Company, then all Options (both vested and
unvested) shall terminate on the date of termination of
Optionee's status as an Employee or Independent Contractor, as
applicable, and any Optioned Stock subject to such Options
shall revert back into the pool of Common Stock available for
issuance under the Plan and shall be available for grant
pursuant to a new Option. An Optionee's status as an Employee
or Independent Contractor shall be deemed to have been
terminated for "cause" if such termination is determined, in
the sole discretion of the Committee, to have resulted from
any of the following: (i) an act or omission by the Optionee
constituting active and deliberate dishonesty, as established
by a final judgment or actual receipt of an improper benefit
or profit in money, property or services; (ii) the Optionee's
continuous failure or the Optionee's refusal to perform his,
her or its duties assigned to such Optionee by the Company (or
to perform according to the reasonable expectations and
standards set by the Committee and/or management consistent
with Optionee's title and position) after receipt of notice of
such failure from the Company specifying how the Optionee has
so failed to perform and the provision of a reasonable
opportunity to cure such performance as determined by the
Committee in its sole discretion; (iii) material dishonesty
related to such person's employment or services as an Employee
or Independent Contractor to the Company; (iv) commission of a
felony or other act involving moral turpitude; or (v)
misappropriation of a material business opportunity of the
Company. An Optionee's attempted resignation to avoid a
Termination for Cause shall not be effective, if the conduct
that ultimately results in the Termination for Cause occurred
prior to the attempted resignation.
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(i) Nontransferability of Options. Except as authorized by the
Committee in writing, no Option granted under the Plan may be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
(j) Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, the number of shares
of Common Stock available for grant of additional Options, and the price
per share of Common Stock specified in each outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from any stock split or other
subdivision or consolidation of shares, the payment of any stock dividend
(but only on the Common Stock) or any other increase or decrease in the
number of such shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company will not be deemed to have been
"effected without receipt of consideration."
Any adjustments as a result of a change in the Company's
capitalization will be made by the Committee, whose determination in that
respect is final, binding and conclusive. Except as otherwise expressly
provided in this Section 6(j), no Optionee shall have any rights by reason
of any stock split or the payment of any stock dividend or any other
increase or decrease in the number of shares of Common Stock. Except as
otherwise expressly provided in this Section 6(j), any issue by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect the number of shares or
price of Common Stock subject to any Options, and no adjustments in
Options shall be made by reason thereof. The grant of an Option under the
Plan does not in any way affect the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital
or business structure.
(k) Conditions Upon Issuance of Shares. Shares of Common Stock may
not be issued with respect to an Option granted under the Plan unless the
exercise of the Option and the issuance and delivery of such shares
pursuant thereto complies with all applicable provisions of law,
including, applicable federal and state securities laws.
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As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of
exercise that the shares of Common Stock are being purchased only for
investment and without any present intention to sell or distribute such
Common Stock if, in the opinion of counsel for the Company, such a
representation is required by any relevant provisions of law.
(l) Occurrence of Change of Control Event. Unless otherwise stated
in the Stock Option Agreement or as otherwise determined by the Committee,
upon the occurrence of a Change of Control Event, the Optionee shall be
vested as to that portion of an Option that has previously vested and /or
that would have become vested to the Optionee within the twelve (12) month
period after the occurrence of the Change of Control Event had such Change
of Control Event not occurred (assuming the Optionee had maintained a
Continuous Relationship with the Company during such period). The
non-vested portion of the Option (after taking into account the provisions
of the immediately preceding sentence) shall terminate upon the occurrence
of the Change of Control Event. With respect to a Change of Control Event,
the Committee may, in its sole discretion, adopt a resolution terminating
the Options granted by the Company as of a date fixed by the Committee
("Change of Control Termination Date") and that provides each Optionee the
right to exercise the vested portion of his, her or its Option (including
that portion of an Option which vests as a result of the occurrence of the
Change of Control Event) on or before the Change of Control Termination
Date. In the event the Committee adopts such a resolution terminating the
Options as provided in the preceding sentence, the Company shall notify
all Optionees of such termination of the Options and provide such Optionee
a period of time, as determined by the Committee, to so exercise the
vested portion of his, her or its Option on or prior to the Change of
Control Termination Date. With respect to any Optionee that so exercises
the vested portion of his, her or its Option on or prior to the Change of
Control Termination Date, the Company may, in lieu of the issuance of
Optioned Stock to the Optionee, pay such Optionee the excess of the amount
received or to be received for the Optioned Stock over the amount that is
to be paid to the Company by the Optionee upon the exercise of the vested
portion of the Option, reduced by the amount of any applicable withholding
taxes.
(m) Substitute Stock Options. In connection with the acquisition or
proposed acquisition by the Company or any Subsidiary or Parent of the
Company (whether by merger, acquisition of stock or assets, or other
reorganization transaction) of a business that has granted stock options
to any of its employees, the Committee is authorized to issue, in
substitution of any such unexercised stock options, a new Option under
this Plan or any successor plan (whether created by the Company or its
acquirer) which confers upon the Optionee substantially the same benefits
as the old option.
(n) Tax Compliance. The Company, in its sole discretion, may take
any actions that it reasonably believes to be required in order to comply
with any local, state, or federal tax laws relating to the reporting or
withholdings of taxes attributable to the grant or exercise of any Option
or the disposition of any shares of Optioned Stock issued upon exercise of
an Option, including, but not limited to: (i) withholding from any
Optionee exercising an Option all or any portion of the Optioned Stock
issuable to such Optionee upon the exercise of such Option, until such
time as the Optionee reimburses the Company for the amount required to be
withheld under applicable tax laws with respect to such exercise of the
Option; (ii) withholding and canceling that number of shares of Optioned
Stock issuable to the Optionee upon the exercise of an Option having a
fair market value equal to the amount necessary to reimburse Company for
the tax required to be withheld by the Company under applicable tax laws;
and (iii) withholdings from any form of compensation or other amount due
to an Optionee or holder of shares of Optioned Stock issued upon exercise
of an Option any amount required to be withheld by Company under
applicable tax laws. Withholdings or reporting is considered required for
purposes of this Section 6(n), if any tax deduction or other favorable tax
treatment available to Company is conditioned upon such reporting or
withholdings.
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(o) Incentive Stock Options. If any provision of this Plan or any
Option designated by the Committee as an Incentive Stock Option shall be
held not to comply with requirements necessary to entitle such Option to
such tax treatment, then (i) such provision shall be deemed to have
contained from the outset such language as shall be necessary to entitle
the Option to the tax treatment afforded under Section 422 of the Code,
and (ii) all other provisions of this Plan and the Stock Option Agreement
shall remain in full force and effect. If any agreement covering an Option
designated by the Committee to be an Incentive Stock Option under this
Plan shall not explicitly include any terms required to entitle such
Incentive Stock Option to the tax treatment afforded by Section 422 of the
Code, all such terms shall be deemed implicit in the designation of such
Option and the Option shall be deemed to have been granted subject to all
such terms.
(p) Other Provisions. Stock Option Agreements executed under the
Plan may contain such other provisions as the Committee deems advisable,
provided that they are not inconsistent with any of the other terms and
conditions of the Plan or applicable laws.
7. Securities Law Restrictions. The Company shall not be obligated to
issue any stock certificates evidencing a transfer of Optioned Stock upon the
exercise of an Option until, in the opinion of the Company and its counsel, such
transfer and issuance of stock certificates will not involve any violation of
applicable federal and state securities laws, the rules and regulations
promulgated thereunder and the requirements of any stock exchange upon which the
Company's Common Stock may then be listed. Acceptance of an Option by an
Optionee shall constitute the Optionee's agreement (binding on any person who
succeeds to the Optionee's rights and obligations under the Stock Option
Agreement by reason of the Optionee's death) that any Optioned Stock purchased
pursuant to the exercise of the Option shall be acquired for the Optionee's own
account and not with a view to distribution and that each notice of the exercise
of any portion of the Option shall be accompanied by a written representation
and covenant signed by the Optionee, in such form as may be specified by the
Company, confirming such agreement and containing such other provisions as may
be prescribed by the Company. The Committee may, at its election, release an
Optionee from the Optionee's agreement to take for the Optionee's own account
and not with a view to distribution of the shares of Optioned Stock purchased
upon exercise of an Option if, in the opinion of the Committee, such covenant
ceases to be necessary for compliance with the applicable federal and state
securities laws (including the rules and regulations promulgated thereunder).
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If the Optioned Stock purchased upon exercise of an Option are not covered
by an effective registration statement under the Securities Act, the Company may
place the following legend (or a legend which is substantially similar to the
following legend) upon, and issue appropriate stock transfer instructions with
respect to, the certificate or certificates representing the Optioned Stock
issued pursuant to an exercise of the Option:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS (THE STATE LAWS"), AND SUCH SHARES MAY
NOT BE TRANSFERRED UNLESS (A) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE LAWS COVERING SUCH TRANSFER IS THEN IN
EFFECT; OR (B) AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION, HAS
BEEN FURNISHED STATING THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS."
8. Listing or Registration of Stock. Each Option is subject to the
requirement that, if at any time the Board shall determine, in its sole
discretion, that the listing, registration or qualification of the Optioned
Stock upon any securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting or exercise of the Option
or the issuance or purchase of the Optioned Stock pursuant to the Option, the
Option may not be exercised in whole or in part until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board. The Company shall
be under no obligation to effect or obtain any such listing, registration,
qualification, consent or approval, if the Board shall determine, in its
discretion, that such action would not be in the best interests of the Company.
The Company shall not be liable for damages due to a delay in the delivery or
issuance of any stock certificates for any reason whatsoever, including, but not
limited to, a delay caused by listing, registration or qualification of the
shares of Common Stock subject to an Option under any securities exchange or
under any federal or state law, or by the effecting or obtaining of any consent
or approval of any governmental body with respect to the granting or exercise of
the Option or the issuance or purchase of Optioned Stock pursuant to an Option.
9. Modification of Options. At any time, and from time to time, the Board
may provide for the modification, extension or renewal of any outstanding
Option, provided that no such modification, extension or renewal shall impair
the Option in any respect without the consent of the holder of the Option.
10. Term of the Plan. The Plan is effective on the date of adoption of the
Plan by the Board. Unless sooner terminated as provided in Section 11, the Plan
will terminate on the tenth (10th) anniversary of its effective date. Options
may be granted at any time after the effective date and prior to the date of
termination of the Plan.
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11. Amendment; Early Termination. The Board may terminate or amend the
Plan at any time and in such respects as it deems advisable, although no
amendment or termination would affect any previously-granted Options, which
would remain in full force and effect notwithstanding any amendment or
termination of the Plan. Shareholder approval of any amendments to the Plan
shall be obtained whenever required by applicable law(s) or stock market
regulations.
12. Inability to Obtain Authority. The inability of the Company to obtain
authority to issue and sell shares under the Plan from any regulatory body
having jurisdiction, which authority is considered by the Company's counsel to
be necessary to the lawful issuance and sale of the shares under the Plan, will
relieve the Company of any liability in respect of the failure to issue or sell
those shares.
13. Shareholder Ratification. The adoption of the Plan shall be subject to
ratification by the affirmative vote of the holders of a majority of the shares
of Common Stock represented in person or by proxy at a duly convened meeting of
the shareholders of the Company, which ratification shall occur within twelve
(12) months before or after the date of adoption of the Plan by the Board.
14 Notices. Every direction, revocation or notice authorized or required
by the Plan shall be deemed delivered to the Company (i) on the date it is
personally delivered to the Secretary of the Company at its principal executive
offices, (ii) three (3) business days after it is sent by registered or
certified mail, postage prepaid, addressed to the Secretary at such offices, or
(iii) one (1) business day after it is sent by a reputable overnight courier
service, addressed to the Secretary at such office, and shall be deemed
delivered to an Optionee (i) on the date it is personally delivered to him or
her, (ii) on the date of mailing if it is sent by registered or certified mail,
postage prepaid, addressed to him or her at the last address shown for him or
her on the records of the Company, or (iii) one (1) business day after it is
sent by reputable overnight courier service, addressed to him or her at the last
address shown for him or her on the records of the Company. If the effective
date as provided above is not a business day, the effective date shall be the
next regular business day. The Company or an Optionee may, at any time, notify
the other as provided above of a new address for service of notice upon the
party.
15. Applicable Law. All questions pertaining to the validity, construction
and administration of the Plan and Stock Options granted hereunder shall be
determined in conformity with the laws of the State of Illinois.
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* * * *
CERTIFICATE OF ADOPTION
I certify that the foregoing plan was adopted by the Board of Directors of
TechAlt, Inc. on March 29, 2005.
/s/ David M. Otto
---------------------------------
David M. Otto, Secretary
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