EXHIBIT 99.1
GENETHERA, INC.
2004 EMPLOYEE, DIRECTOR AND CONDULTANT STOCK OPTION PLAN
Dated April 1, 2004
1. PURPOSE. This 2004 Employee, Director And Consultant Stock Option Plan
(the "Plan") is established as a compensatory plan to attract and provide equity
incentives to Employees, Directors And Consultants of GeneThera, Inc. (the
"Company") or any Subsidiary or Affiliate of the Company to promote the
financial success of the Company. Capitalized terms not previously defined
herein are defined in Section 16 of the Plan.
The Plan is intended to provide participants with stock-based incentive
compensation which is not subject to the deduction limitation rules prescribed
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and should be construed to the extent possible as providing for
remuneration which is "performance-based compensation" within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder.
2. SHARES. The shares of stock that may be purchased upon exercise of
Options granted under the Plan (the "Shares") are shares of the common stock,
$.001 par value (the "Common Stock") of the Company.
3 . NUMBER OF SHARES. The maximum number of Shares that may be issued
pursuant to Options granted under the Plan shall not exceed 2,000,000 in total
subject to adjustment as provided in the Plan. The maximum number of Shares
which may be subject to Options granted under the Plan to any individual in any
calendar year shall not exceed 500,000, and the method of counting such Shares
shall conform to any requirements applicable to performance-based compensation
under Section 162(m) of the Code. If any Option is terminated for any reason
without being exercised in whole or in part, the Shares thereby released from
such Option shall be available for purchase under other Options subsequently
granted under the Plan.At all times during the term of the Plan, the Company
shall reserve and keep available such number of Shares as shall be required to
satisfy the requirements of outstanding Options under the Plan.
4. ELIGIBILITY. The Administrator will, in its sole discretion, name the
Participants in the Plan, provided, however, that each Participant must be a Key
Employee, director or consultant of the Company or of an Affiliate at the time
an Option is granted. Notwithstanding any of the foregoing provisions, the
Administrator may authorize the grant of an Option to a person not then an
employee, director or consultant of the Company or of an Affiliate. The actual
grant of such Option, however, shall be conditioned upon such person becoming
eligible to become a Participant at or prior to the time of the execution of the
Option Agreement evidencing such Option. Non-Qualified Options may be granted to
any Key Employee, director or consultant of the Company or an Affiliate. No
resident of the United States shall be granted in any one year Options to
purchase more than 500,000 Shares. The granting of any Option to any individual
shall neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Options.
5. TERMS AND CONDITIONS OF OPTIONS. The Plan Committee shall determine the
number of Shares subject to the Option, the exercise price of the Option, the
period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under the Plan shall
be evidenced by a written Stock Option Grant (the "Grant") in such form (which
need not be the same for each Optionee) as the Plan Committee shall from time to
time approve.
5.2 Date of Grant. The date of grant of an Option shall be the date
on which the Plan Committee makes the determination to grant such Option unless
otherwise specified by the Plan Committee. The Grant representing the Option
will be delivered to the Optionee with a copy of the Plan within a reasonable
time after the date of grant.
5.3 Exercise Price. The exercise price of an Option shall be
determined by the Plan Committee at the time of grant.
5.4 Exercise Period. Options shall be exercisable within the times
or upon the events determined by the Plan Committee as set forth in the Grant.
5.5 Options Transferable. Options granted under the Plan may be
freely transferred or assigned by the Optionee as determined by the Plan
Committee.
6. EXERCISE OF OPTIONS.
6.1 Notice. Options may be exercised only by delivery to the Company
of a written exercise agreement in a form approved by the Plan Committee (which
need not be the same for each Optionee), stating the number of Shares being
purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding the Optionee's investment intent and
access to information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
6.2 Payment. Payment for the Shares may be made in cash (by check)
or, where approved by the Plan Committee in its sole discretion at the time of
grant and where permitted by law: (a) by- cancellation of indebtedness of the
Company to the Optionee; (b) by surrender of shares of Common Stock of the
Company that have been owned by the Optionee for more than six (6) months (and
which have been paid for within the meaning of SEC Rule 144 and, if such Shares
were purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares) or were obtained by the Optionee in the
open public market, having a Fair Market Value equal to the exercise price of
the Option; (c) by instructing the Company to withhold Shares otherwise issuable
pursuant to an exercise of the Option having a Fair Market Value equal to the
exercise price of the Option (including the withheld Shares); (d) by waiver of
compensation due or accrued to Optionee for services rendered; (e) provided that
a public market for the Company's stock exists, through a "same day sale"
commitment from the Optionee and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD Dealer") whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (f) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; or (g) by any combination of the
foregoing.
6.3 Taxes. The Company may make such provisions as it may deem
appropriate, consistent with applicable law, in connection with any Options
granted under the Plan with respect to the withholding of any taxes or any other
tax matters.
6.4 Limitations on Exercise. Notwithstanding the exercise periods
set forth in the Grant, exercise of an Option shall always be subject to the
following limitations:
(a) The Plan Committee may specify a reasonable minimum number
of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the Optionee from
exercising the full number of Shares as to which the Option is then
exercisable.
(b) An Option shall not be exercisable unless such exercise is
in compliance with the Securities Act of 1933, as amended (the "1933
Act"), all applicable state securities laws and the requirements of
any stock exchange or national market system upon which the Shares
may then be listed, as they are in effect on the date of exercise.
The Company shall be under no obligation to register the Shares with
the Securities and Exchange Commission ("SEC") or to effect
compliance with the registration, qualification or listing
requirements of any state securities laws or stock exchange, and the
Company shall have no liability for any inability or failure to do
so.
6.5 Information to Optionees. The Company shall provide to each
Optionee a copy of the annual financial statements of the Company prior to such
Optionee's exercise of the Option, and to each Optionee annually during the
period such Optionee has Options outstanding, at such time after the close of
each fiscal year of the Company as such statements are released by the Company
to its shareholders; provided, however, the Company shall not be required to
provide such financial statements to Optionees whose services in connection with
the Company assure them access to equivalent information.
7. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Plan Committee
shall have the power to modify, extend or renew outstanding Options and to
authorize the grant of new Options in substitution therefor, provided that any
such action may not, without the written consent of the Optionee, impair any
rights under any Option previously granted. The Plan Committee shall have the
power to reduce the exercise price of outstanding options.
8. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the rights
of a shareholder with respect to any Shares subject to an Option until such
Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in the Plan.
9. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Option granted
under the Plan shall confer on any Optionee any right to continue in the employ
of, or other relationship with, the Company or any Parent, Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate the Optionee's
employment or other relationship at any time, with or without cause.
10. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company
without consideration, or if a substantial portion of the assets of the Company
are distributed, without consideration in a spin-off or similar transaction, to
the shareholders of the Company, the number of Shares available under the Plan
and the number of Shares subject to outstanding Options and the exercise price
per share of such Options shall be proportionately adjusted, subject to any
required action by the Plan Committee or shareholders of the Company and
compliance with applicable securities laws; provided, however, that a fractional
share shall not be issued upon exercise of any Option and any fractions of a
Share that would have resulted shall either be cashed out at Fair Market Value
or the number of shares issuable under the Option shall be rounded up to the
nearest whole number, as determined by the Plan Committee; and provided further
that the exercise price may not be decreased to below the par value, if any, for
the Shares.
11. ASSUMPTION OF OPTIONS BY SUCCESSORS.
11.1 Assumption or Replacement of Options by Successor. In the event
of (a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company and the Options granted under the Plan are assumed or replaced by
the successor corporation, which assumption shall be binding on all Optionees),
(b) a dissolution or liquidation of the Company, (c) the sale of substantially
all of the assets of the Company, or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Options may be
assumed by the successor corporation, which assumption shall be binding on all
Optionees. In the alternative, the successor corporation may substitute
equivalent Options or provide substantially similar consideration to Optionees
as was provided to shareholders (after taking into account the existing
provisions of the Options). The successor corporation may also issue, in place
of outstanding Shares of the Company held by the Optionee, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Optionee.
11.2 Expiration of Options. In the event such successor corporation,
if any, refuses to assume or substitute the Options, as provided above, pursuant
to a transaction described in Subsection 11.1(a) above, such Options shall
expire on the consummation of such transaction at such time and on such
conditions as the Plan Committee shall determine. In the event such successor
corporation, if any, refuses to assume or substitute the Options as provided
above, pursuant to a transaction described in Subsections 11.1 (a), (b), (c) or
(d) above, or there is no successor corporation, and if the Company ceases to
exist as a separate corporate entity, then, notwithstanding any contrary terms
in the Option Grant, the Options shall expire on a date at least twenty (20)
days after the Plan Committee gives written notice to Optionees specifying the
terms and conditions of such termination.
11.3 Other Treatment of Options. Subject to any greater rights
granted to Optionees under the foregoing provisions of this Section 11, in the
event of the occurrence of any transaction described in Section 11.1, any
outstanding Options shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
11.4 Assumption of Options by the Company. The Company, from time to
time, also may substitute or assume outstanding options granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Option under the Plan in substitution of
such other company's option, or (b) assuming such option as if it had been
granted under the Plan if the terms of such assumed option could be applied to
an Option granted under the Plan. Such substitution or assumption shall be
permissible if the holder of the substituted or assumed option would have been
eligible to be granted an Option under the Plan if the other company had applied
the rules of the Plan to such grant. In the event the Company assumes an option
by another company, the terms and conditions of such option shall remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
12. ADOPTION. The Plan shall become effective on the date that it is
adopted by the Plan Committee (the "Effective Date"). Upon the Effective Date,
the Plan Committee may grant Options pursuant to the Plan.
13. ADMINISTRATION. The Plan may be administered by the Plan Committee.
The interpretation by the Plan Committee of any of the provisions of the Plan or
any Option granted under the Plan shall be final and binding upon the Company
and all persons having an interest in any Option or any Shares purchased
pursuant to an Option.
14. TERM OF PLAN. Options may be granted pursuant to the Plan from time to
time within a period of ten (10) years after the date on which the Plan is
adopted by the Plan Committee.
15. AMENDMENT OR TERMINATION OF PLAN. The Plan Committee may at any time
terminate or amend the plan in any respect including (but not limited to)
amendment of any form of Grant, exercise agreement or instrument to be executed
pursuant to the Plan.
16. CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following meanings:
16.1 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
16.2 "Subsidiarv" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
16.3 "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
16.4 "Fair Market Value" shall mean the fair market value of the
Shares as determined by the Plan Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the last
sale price on the Company's principal exchange or quotation system on the last
trading day prior to the date of determination.