EXHIBIT 10.2
DYNECO INTERNATIONAL, INC.
1993 CORPORATE STOCK OPTION PLAN
PURPOSE; EFFECTIVENESS OF THE PLAN
The purpose of the DYNECO INTERNATIONAL, INC. 1993 CORPORATE STOCK
OPTION PLAN (the "Plan") is to advance the interests of DynEco International,
Inc. (the "Company") and its stockholders by helping the Company obtain and
retain the services of employees, officers and directors upon whose judgment,
initiative and efforts the Company is substantially dependent, and to provide
those persons with further incentives to advance the interests of the Company.
This Plan will become effective as. of May 1, 1993, the date of its
adoption by the Board, subject to the approval of the Plan by the majority vote
of the stockholders of the Company entitled to vote (excluding holders of shares
of Stock issued by the Company pursuant to the exercise of options granted under
this Plan) prior to April 30, 1994. If the Plan is not so approved by the
stockholders of the Company, any. options granted under this Plan will be
rescinded and will be void. This Plan will remain in effect until it is
terminated by the Board or the Committee (as defined hereafter) under Section IX
hereof except that no ISO (as defined herein) will be granted after the tenth
anniversary of the date of this Plan's adoption by the Board. This Plan will be
governed by, and construed in accordance with, the laws of the State of
Minnesota.
I. Certain Definitions
Unless the context otherwise requires, the following defined terms
(together with other capitalized terms defined elsewhere in this Plan) will
govern the construction of this Plan, and of any stock option agreements entered
into pursuant to this Plan:
A. "10% STOCKHOLDER" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth in
Section 424(d) of the Code at the time he or she is granted an Option, stock
possessing more than ten percent (10%) of the total combined voting power or
value of all classes of stock of the Company and/or of its subsidiaries;
B. "1933 ACT" means the Securities Act of 1933, as amended;
C. "1934 ACT" means the Securities Exchange Act of 1934, as amended;
1
D. "BOARD" means the Board of Directors of the Company;
E. "CALLED FOR UNDER AN OPTION," or words to similar effect, means
issuable pursuant to the exercise of an Option;
F. "CODE" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to Sections of
the Code as enacted at the time of this Plan's adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Code resulting from recodification, renumbering or otherwise);
G. "COMMITTEE" means a committee of two or more individuals, appointed
by the Board, to administer and interpret this Plan; provided that the term
"Committee" will refer to the Board during such times as no Committee is
appointed by the Board;
H. "Company" means DynEco International, Inc., a Minnesota corporation;
I. "DISABILITY" has the same meaning as "permanent and total
disability," as defined in Section 22(e)(3) of the Code ;
J. "ELIGIBLE PARTICIPANTS" means persons who, at a particular time, are
employees, officers, or directors of the Company or its subsidiaries;
K. "Fair MARKET Value" means, with respect to the Common Stock, the
following:
1. If the Common Stock is listed or admitted to unlisted
trading privileges on any national securities exchange or. is not so
listed or admitted but transactions in the Common Stock are reported on
the NASDAQ National Market System, the last sale price of the Common
Stock on such exchange or reported by the NASDAQ National Market System
as of such date (or, if no shares were traded on such day, as of the
next preceding day on which there was such a trade); or
2. If the Common Stock is not listed or admitted to unlisted
trading privileges or reported on the NASDAQ National Market System,
and bid and asked prices therefor in the over-the-counter market are
reported by the NASDAQ System or the National Quotation Bureau, Inc.
(or any comparable reporting service), the mean of the closing bid and
asked prices as of such date, as so reported by the NASDAQ System, or,
if not so reported thereon, as
2
reported by the National Quotation Bureau, Inc. (or such comparable
reporting service).
3. If the Common Stock is not so listed or admitted to
unlisted trading privileges, or reported on the NASDAQ National Market
System, and such bid and asked prices are not so reported, such price
as the Committee determines in good faith in the exercise of its
reasonable discretion.
L. "ISO" has the same meaning as "incentive stock option," as defined
in Section 422 of the Code;
M. "Just CAUSE TERMINATION" means a termination by the Company of an
Optionee's employment by and/or service to the Company (or if the Optionee is a
director, removal of the Optionee from the Board by action of the stockholders
or, if permitted by applicable law and the by-laws of the Company, the other
directors) , in connection with the good faith determination of the Company's
Board of Directors (or of the Company's stockholders if the Optionee is a
director and the removal of the Optionee from the Board is by action of the
stockholders, but in either case excluding the vote of the Optionee if he or she
is a director or a stockholder) that the Optionee has engaged in any acts
involving dishonesty or moral turpitude or in any acts that materially and
adversely affect the business, affairs or reputation of the Company or its
subsidiaries;
N. "NSO" means any option granted under this Plan whether designated by
the Committee as a "non-qualified stock option," a "non-statutory stock option"
or otherwise, other than an option designated by the Committee as an ISO, or any
option so designated but which, for any reason, fails to qualify as an ISO
pursuant to Section 422 of the Code and the rules and regulations thereunder;
0. "OPTION" means an option granted pursuant to this Plan entitling the
option holder to acquire shares of Stock issued by the Company pursuant to the
valid exercise of the option;
P. "OPTION AGREEMENT" means an agreement between the Company and an
Optionee, in form and substance satisfactory to the Committee in its sole
discretion, consistent with this Plan;
Q. "OPTION PRICE" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of the Option Stock
called for under such Option;
3
R. "OPTION STOCK" means Common Stock issued or issuable by the Company
pursuant to the valid exercise of an Option;
S. "OPTIONEE" means an Eligible Participant to whom Options are granted
hereunder, and any transferee thereof pursuant to a Transfer authorized under
this Plan;
T. "PLAN" means this 1993 Corporate Stock Option Plan of the Company;
U. "PREVIOUSLY ACQUIRED SHARES" means shares of Company Common Stock
that are already owned by the Eligible Participant;
V. "STOCK" means shares of the Company's Common Stock, no par value;
W. "SUBSIDIARY" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code;
X. "TRANSFER," with respect to Option Stock, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer, conveyance,
pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy of
such Option Stock, including without limitation an assignment for the benefit of
creditors of the Optionee, a transfer by operation of law, such as a transfer by
will or under the laws of descent and distribution, an execution of judgment
against the Option Stock or the acquisition of record or beneficial ownership
thereof by a lender or creditor, a transfer pursuant to a QDRO, or to any decree
of divorce, dissolution or separate maintenance, any property settlement, any
separation agreement or any other agreement with a spouse (except for estate
planning purposes) under which a part or all of the shares of Option Stock are
transferred or awarded to the spouse of the Optionee or are required to be sold;
or a transfer resulting from the filing by the Optionee of a petition for
relief, or the filing of an involuntary petition against such Optionee, under
the bankruptcy laws of the United States or of any other nation.
II. Eligibility
Participants in the Plan shall be those Eligible Participants who, in
the judgment of the Committee, are performing, or during the term of an option
will perform, services in management, operation and development of the Company
or any Subsidiary, and significantly contributed, are significantly contributing
or are expected to significantly contribute to the achievement of corporate
objectives. Eligible Participants may be granted from
4
time to time one or more Options, as may be determined by the Committee in its
sole discretion. The number, type, terms and conditions of the Options granted
to various Eligible Participants need not be uniform, consistent or in
accordance with any plan, regardless of whether such Eligible Participants are
similarly situated. Upon determination by the Committee that an Option is to be
granted to an Eligible Participant, written notice shall be given such person,
specifying the terms, conditions, rights and duties related thereto. Each
Eligible Participant to whom an Option is to be granted shall enter into an
agreement with the Company, in such form as the Committee shall determine and
which is consistent with the provisions of the Plan, specifying such terms,
conditions, rights and duties. Options shall be deemed to be granted as of the
date specified in the grant resolution of the Committee, and the related option
agreements shall be dated as of such date.
III. Administration
A. COMMITTEE. The Committee, if appointed by the Board, will administer
this Plan. If the Board, in its discretion, does not appoint such a Committee,
the Board itself will administer this Plan and take such other actions as the
Committee is authorized to take hereunder; provided that the Board may take such
actions hereunder in the same manner as the Board may take other actions under
the Company's articles of incorporation and by-laws generally,
A majority of the Committee shall constitute a quorum. Action of such
Committee may be taken without a meeting if unanimous written consent is given.
Such Committee shall act by majority approval of the members, shall keep minutes
of its meetings and written action, and shall provide copies of such minutes to
the Board. Copies of the minutes and written action shall be kept with the
written records of the Company.
From and after the date on which the Company first registers a class of
its equity securities under Section 12 of the 1934 Act, the Plan shall be
administered by the Board, all of whom shall be "disinterested persons" within
the meaning of Rule l6b-3 under the 1934 Act, or a committee consisting solely
of not fewer than two members of the Board who are such "disinterested persons."
B. AUTHORITY AND DISCRETION OF COMMITTEE. The Committee will have full
and final authority in its discretion, at any time and from time to time,
subject only to the express terms, conditions and other provisions of the
Company's articles of incorporation, by-laws and this Plan, and the specific
limitations on such discretion set forth herein:
1. to select and approve the persons who will be granted
Options under this Plan from among the Eligible Participants,
5
and to grant to any person so selected one or more Options to purchase
such number of shares of Option Stock as the Committee may determine;
2. to determine the period or periods of time during which
Options may be exercised, the Option Price and the duration of such
Options, and other matters to be determined by the Committee in
connection with specific Option grants and Option Agreements as
specified under this Plan;
3. to interpret this Plan, to prescribe, amend and rescind
rules and regulations relating to this Plan, and to make all other
determinations necessary or advisable for the operation and
administration of this Plan; and
4. to delegate all or a portion of its authority under
subsections 1, 2 and 3 of this Section III to one or more directors of
the Company who are executive officers of the Company, but only in
connection with Options granted to Eligible Participants who are not
subject to the reporting and liability provisions of Section 16 of the
1934 Act, and the rules and regulations thereunder, and subject to such
restrictions and limitations (such as the aggregate number of shares of
Option Stock called for by such Options that may be granted) as the
Committee may decide to impose on such delegate directors.
C. LIMITATION ON AUTHORITY. Notwithstanding the foregoing, or any other
provision of this Plan, the Committee will have no authority:
1. to grant Options to any of its members, whether or not
approved by the Board; and
2. to determine any matters, or exercise any discretion, in
connection with the Options, to the extent that the power to make such
determinations or to exercise such discretion would cause one or more
members of the Committee no longer to be "disinterested persons" within
the meaning of Section III. A. above.
D. DESIGNATION OF OPTIONS. Except as otherwise provided herein, the
Committee will designate any Option granted hereunder either as an ISO or as an
NSO. To the extent that the Fair Market Value (determined at the time the Option
is granted) of Stock with respect to which all ISOs are exercisable for the
first time by any individual during any calendar year (pursuant to this Plan and
all other plans of the Company and/or its Subsidiaries) exceeds $100,000, such
option will be treated as an NSO. Notwithstanding the general eligibility
provisions of Section II hereof, the Committee may grant ISOs only to persons
who are employees of the Company and/or its Subsidiaries.
6
E. OPTION AGREEMENTS. Options will be deemed granted hereunder only
upon the execution and delivery of an Option Agreement by the Optionee and a
duly authorized executive officer of the Company. Options will not be deemed
granted hereunder merely upon the authorization of such grant by the Committee.
IV. Shares Reserved for Options
A. OPTION POOL. The aggregate number of shares of Option Stock that may
be issued pursuant to the exercise of Options granted under this Plan shall be
Seven Hundred Fifty Thousand (750,000) (the "Option Pool"), provided that such
number will be increased by the number of shares of Option Stock that the
Company subsequently may reacquire through repurchase or otherwise. Shares of
Option Stock that would have been issuable pursuant to Options, but that are no
longer issuable because all or part of those Options have terminated or expired,
will be deemed not to have been issued for purposes of computing the number of
shares of Option Stock remaining in the Option Pool and available for issuance.
The maximum number of shares authorized may also be increased from time
to time by approval of the Board and, if required pursuant to Rule 16b-3 under
the 1934 Act, Section 422 of the Code, or the applicable rules of any securities
exchange or NASDAQ and/or NASD, the shareholders of the Company.
B. ADJUSTMENTS UPON CHANGES IN STOCK. In the event of any change in the
outstanding Stock of the Company as a result of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
reorganization, merger, consolidation, liquidation, rights offering,
extraordinary dividend or divesture (including a spin-off) or any other change
in the corporate structure or shares of the Company, appropriate proportionate
adjustments will be made (in order to prevent dilution or enlargement of
Eligible Participants) in: (1) the aggregate number of shares of Option Stock in
the Option Pool that may be issued pursuant to the exercise of Options granted
hereunder; (2) the Option Price and the number of shares of Option Stock called
for in each outstanding Option granted hereunder; and (3) other rights and
matters determined on a per share basis under this Plan or any Option Agreement
hereunder. Any such adjustments will be made only by the Board (or, if the
Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation) , and when so made will be effective,
conclusive and binding for all purposes with respect to this Plan and all
Options then outstanding. No such adjustments will be required by reason of the
issuance or sale by the Company for cash or other consideration of additional
shares of its Stock or securities convertible into or exchangeable for shares of
its Stock.
7
V. Terms of Stock Option Agreements
Each Option granted pursuant to this Plan will be evidenced by an
agreement (an "Option Agreement") between the Company and the person to whom
such Option is granted, in form and substance satisfactory to the Committee in
its sole discretion, consistent with this Plan. Without limiting the foregoing,
each Option Agreement (unless otherwise stated therein) will be deemed to
include the following terms and conditions:
A. COVENANTS OF OPTIONEE. At the discretion of the Committee, the
person to whom an Option is granted hereunder, as a condition to the granting of
the Option, must execute and deliver to the Company a confidential information
agreement approved by the Committee. Nothing contained in this Plan, any Option
Agreement or in any other agreement executed in connection with the granting of
an Option under this Plan will confer upon any Optionee any right with respect
to the continuation of his or her status as an employee of, officer of, or
director of, the Company or its subsidiaries.
B. VESTING. An Option shall become exercisable at such times and in
such installments (which may be cumulative) as shall be determined by the
Committee in its sole discretion at the time the Option is granted. Upon the
completion of its exercise period, an Option, to the extent not then exercised,
shall expire.
C. EXERCISE OF THE OPTION.
1. MECHANICS AND NOTICE. An Option may be exercised to the
extent exercisable (a) by giving written notice of exercise to the
Company, specifying the number of full shares of Option Stock to be
purchased and accompanied by full payment of the Option Price thereof
and the amount of withholding taxes pursuant to subsection V.C.2 below;
and (b) by giving assurances satisfactory to the Company that the
shares of Option Stock to be purchased upon such exercise are being
purchased for investment and not with a view to resale in connection
with any distribution of such shares in violation of the 1933 Act;
provided, however, that in the event the Option Stock called for under
the Option is registered under the 1933 Act, or in the event resale of
such Option Stock without such registration would otherwise be
permissible, this second condition will be inoperative if, in the
opinion of counsel for the Company, such condition is not required
under the 1933 Act, or any other applicable law, regulation or rule of
any governmental agency.
2. WITHHOLDING TAXES. As a condition to the issuance of the
shares of Option Stock upon full or partial exercise of an Option
granted under this Plan, the Optionee will pay to the Company in cash,
or in such other form as the Committee may
8
determine in its discretion, the amount of the Company's tax
withholding liability required in connection with such exercise. For
purposes of this subsection V.C.2, "tax withholding liability" will
mean all federal and state income taxes, social security tax, and any
other taxes applicable to the compensation income arising from the
transaction required by applicable law to be withheld by the Company.
3. PAYMENT OF OPTION PRICE. Each Option Agreement will specify
the Option Price with respect to the exercise of Option Stock
thereunder, to be fixed by the Committee in its discretion, but in no
event will the Option Price for an ISO granted hereunder be less than
one hundred (100%) percent of the Fair Market Value (or, in case the
Optionee is a 10% Stockholder, one hundred ten (110%) percent of such
Fair Market Value) of the Option Stock at the time such ISO is granted,
and in no event will the Option Price for an NSO granted hereunder be
less than eighty- five (85%) percent of Fair Market Value. The Option
Price will be payable to the Company in United States dollars in cash
or by check or, such other form of consideration as may be approved by
the Committee, in its discretion.
In determining whether or upon what terms and conditions an Eligible
Participant will be permitted to pay the purchase price of an Option in
a form other than cash, the Committee may consider all relevant facts
and circumstances, including, without limitation, the tax and
securities law consequences to the Company. In the event the Eligible
Participant is permitted to pay the purchase price of an Option in
whole or in part with Previously Acquired Shares and/or the surrender
of Options, the value of such Previously Acquired Shares and/or the
shares covered by such Options shall be equal to their Fair Market
Value on the date of exercise of the Option.
D. TERMINATION OF THE OPTION. Except as otherwise provided herein, each
Option Agreement will specify the period of time, to be fixed by the Committee
in its discretion, during which the Option granted therein will be exercisable,
not to exceed ten years from the date of grant in the case of an ISO (the
"Option Period") ; provided that the Option Period will not exceed five years
from the date of grant in the case of an ISO granted to a 10% Stockholder. To
the extent not previously exercised, each Option will terminate upon the
expiration of the Option Period specified in the Option Agreement; provided,
however, that each such Option will terminate, if earlier: (i) ninety days after
the date that the Optionee ceases to be an Eligible Participant for any reason,
other than by reason of death or disability; (ii) twelve months after the date
that the Optionee ceases to be an Eligible Participant by reason of such
person's death or disability; or (iii) immediately as of the date that the
Optionee ceases to be an Eligible Participant by reason of a Just Cause
Termination. In the event of a sale or all
9
or substantially all of the assets of the Company, or a merger or consolidation
or other reorganization in which the Company is not the surviving corporation,
or in which the Company becomes a subsidiary of another corporation (any of the
foregoing events, a "Corporate Transaction"), then notwithstanding anything else
herein, the right to exercise all then outstanding Options will vest immediately
prior to such Corporate Transaction and will terminate immediately after such
Corporate Transaction; provided, however, that if the Board, in its sole
discretion, determines that such immediate vesting of the right to exercise
outstanding Options is not in the best interests of the Company, then the
successor corporation must agree to assume the outstanding Options or substitute
therefor comparable options of such successor corporation or a parent or
subsidiary of such successor corporation.
Unless the committee shall otherwise determine in its sole discretion,
an Eligible Participant's employment or other service shall, for purposes of the
Plan, be deemed to have terminated on the date such Eligible Participant ceases
to perform services for the Company and all Subsidiaries, as determined in good
faith by the Committee.
E. OPTIONS NONTRANSFERABLE. No Option will be transferable by the
Optionee otherwise than by will or the laws of descent and distribution, or in
the case of an NSO, pursuant to a qualified domestic relations order (as defined
by the Code). During the lifetime of the Optionee, the Option will be
exercisable only by him or her, or the transferee of an NSO if it was
transferred pursuant to a qualified domestic relations order.
F. QUALIFICATION OF STOCK. The right to exercise an Option will be
further subject to the requirement that if at any time the Board determines, in
its discretion, that the listing, registration or qualification of the shares of
Option Stock called for thereunder upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of or in connection with the
granting of such Option or the purchase of shares of Option Stock thereunder,
the Option may not be exercised, in whole or in part, unless and until such
listing, registration, qualification, consent or approval is effected OR
obtained free of any conditions not acceptable to the Board, in its discretion.
G. ADDITIONAL RESTRICTIONS ON TRANSFER. By accepting Options and/or
Option Stock under this Plan, the Optionee will be deemed to represent, warrant
and agree as follows:
1. SECURITIES ACT OF 1933. The Optionee understands that the
shares of Option Stock have not been registered under the 1933 Act, and
that such shares are not freely tradeable and must be
10
held indefinitely unless such shares are either registered under the
1933 Act or an exemption from such registration is available. The
Optionee understands that the Company is under no obligation to
register the shares of Option Stock.
2. Other APPLICABLE LAWS. The Optionee further understands
that Transfer of the Option Stock requires full compliance with the
provisions of all applicable laws.
3. INVESTMENT INTENT. Unless a registration statement is in
effect with respect to the sale of Option Stock obtained through
exercise of Options granted hereunder: (a) Upon exercise of any Option,
the Optionee will purchase the Option Stock for his or her own account
and not with a view to distribution within the meaning of the 193 3
Act, other than as may be effected in compliance with the 1933 Act and
the rules and regulations promulgated thereunder; (b) no one else will
have any beneficial interest in the Option Stock; and (c) he or she has
no present intention of disposing of the Option Stock at any particular
time.
H. COMPLIANCE WITH LAW. Notwithstanding any other provision of this
Plan, Options may be granted pursuant to this Plan, and Option Stock may be
issued pursuant to the exercise thereof by an Optionee, only after there has
been compliance with all applicable federal and state securities laws, and all
of the same will be subject to this overriding condition. The Company will not
be required to register or qualify Option Stock with the Securities and Exchange
Commission or any State agency, except that the Company will register with, or
as required by local law, file for and secure an exemption from such
registration requirements from, the applicable securities administrator and
other officials of each jurisdiction in which an Eligible Participant would be
granted an Option hereunder prior to such grant.
I. STOCK CERTIFICATES. Certificates representing the Option Stock
issued pursuant to the exercise of Options will bear all legends required by law
and necessary to effectuate this Plan's provisions.' The Company may place a
"stop transfer" order against shares of the Option Stock until all restrictions
and conditions set forth in this Plan have been complied with.
Unless a registration statement under the 1933 Act and applicable state
securities laws is in effect with respect to the issuance or transfer of the
shares of Stock under the Plan, each certificate representing any such shares
shall be endorsed with a legend in substantially the following form, unless
counsel for the Company is of the opinion as to any such certificate that such
legend is unnecessary:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE ACQUIRED
11
FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, OR ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH
STATE LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT
AND SUCH STATE LAWS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
J. NOTICES. Any notice to be given to the Company under the terms of an
Option Agreement will be addressed to the Company at its principal executive
office, Attention: Corporate Secretary, or at such other address as the Company
may designate in writing. Any notice to be given to an Optionee will be
addressed to the Optionee at the address provided to the Company by the
Optionee. Any such notice will be deemed to have been duly given if and when
enclosed in a properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or branch post
office regularly maintained by the United States Government.
K. OTHER PROVISIONS. The Option Agreement may contain such other terms,
provisions and conditions, including such special forfeiture conditions, rights
of repurchase, rights of first refusal and other restrictions on Transfer of
Option Stock issued upon exercise of any Options granted hereunder, not
inconsistent with this Plan, as may be determined by the Committee in its sole
discretion.
L. RIGHTS AS A SHAREHOLDER. The Eligible Participant shall have no
rights as a shareholder with respect to any shares of Company Common Stock
covered by an Option until the Optionee shall have become the holder of record
of such shares.
M. EMPLOYMENT OF SERVICE. Nothing in this Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Participant at any time, nor confer upon
any Eligible Participant any right to continue in the employ or service of the
Company or any Subsidiary.
N. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify or rescind any previously approved compensation plans
or programs entered into by the Company. The Plan will be construed to be in
addition to any and all other plans or programs. Neither the adoption of the
plan nor the submission of the Plan to the shareholders of the Company for
approval will be construed as creating any limitations on the power or authority
of the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.
12
VI. PROCEEDS FROM SALE OF STOCK
Cash proceeds from the sale of shares of Option Stock issued from time
to time upon the exercise of Options granted pursuant to this Plan will be added
to the general funds of the Company and as such will be used from time to time
for general corporate purposes.
VII. MODIFICATION/ EXTENSION AND RENEWAL of Options
Subject to the terms and conditions and within the limitations of this
Plan, the Committee may modify, extend or renew outstanding Options granted
under this Plan, or accept the surrender of outstanding Options (to the extent
not theretofore exercised) and authorize the granting of new Options in
substitution therefor (to the extent not theretofore exercised) .
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, alter or impair any rights or
obligations under any Option theretofore granted under this Plan.
VIII. AMENDMENT AND DISCONTINUANCE
The Board may amend, suspend or discontinue this Plan at any time or
from time to time; provided that no action of the Board will cause ISOs granted
under this Plan not to comply with Section 422 of the Code unless the Board
specifically declares such action to be made for that purpose and provided
further that no such action may, without the approval of the stockholders of the
Company, materially increase (other than by reason of an adjustment pursuant to
Section IV.B hereof) the maximum aggregate number of shares of Option Stock in
the Option Pool that may be issued under Options granted pursuant to this Plan
or materially increase the benefits accruing to Plan participants or materially
modify eligibility requirements for the participants. Moreover, no such action
may alter or impair any Option previously granted under this Plan without the
consent of the holder of such Option.
IX. FLAN COMPLIANCE WITH RULE 16B-3
With respect to persons subject to Section 16 of the 1934 Act,
transactions under this plan are intended to comply with all , applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Plan administrators fails so to comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Plan administrators.
13
X. Miscellaneous
A. CONSTRUCTION AND HEADINGS. The use of the masculine gender shall
also include within its meaning the feminine, and the singular may include the
plural and the plural may include the singular, unless the context clearly
indicates to the contrary, The headings of the Sections and subparts of the Plan
are for convenience of reading only and are not meant to be of substantive
significance and shall not add or detract from the meaning of such Section or
subpart.
B. GOVERNING LAW. The place of administration of the Plan shall be
conclusively deemed to be within the State of Minnesota, and the rights and
obligations of any and all persons having or claiming to have had an interest
under the Plan or under any agreements evidencing Options shall be governed by
and construed exclusively and solely in accordance with the laws of the State of
Minnesota without regard to the conflict of laws provisions of any jurisdiction.
All parties agree to submit to the jurisdiction of the state and federal courts
of Minnesota with respect to matters relating to the Plan and agree not to raise
or assert the defense that such forum is not convenient for such party.
C. SUCCESSORS AND ASSIGNS. This Plan shall be binding upon and inure to
the benefit of the successors and permitted assigns of the Company, including
without limitation, whether by way of merger, consolidation, operation of law,
assignment, purchase or other acquisition of substantially all of the assets or
business of the Company, and any and all such successors and assigns shall
absolutely and unconditionally assume all of the Company's obligations under the
Plan.
D. SURVIVAL OF PROVISIONS. The rights, remedies, agreements,
obligations and covenants contained in or made pursuant to the plan, any
agreement evidencing an Option and any other notices or agreements in connection
therewith, including, without limitation, any notice of exercise of an Option,
shall survive the execution and delivery of such notices and agreements and the
delivery and receipt of shares of Common stock and shall remain in full force
and effect.
XI. Copies of Plan
A copy of this Plan will be delivered to each Optionee at or before the
time he or she executes an Option Agreement.
14
[SPECIMEN FORM]
DYNECO INTERNATIONAL, INC.
1993 CORPORATE STOCK OPTION PLAN
Stock Option Agreement
Form DYNCASH
THIS AGREEMENT is made as of _________________________________________,
199__, between DynEco International, Inc., a Minnesota corporation (the
"Company"), and ______________________________________________ (the "Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. OPTION GRANT. The Company hereby grants to the Optionee an option
(the "Option") to purchase the number of shares of the Company's Common Stock
(the "Shares"), for an exercise price per share (the "Option Price") and based
upon a Grant Date, all as set forth below:
Shares under option: ___________________________________
Option Price per Share: $ ____________
Grant Date: _______________, 199_
The Option will be subject to all of the terms and conditions set forth herein
and in the Company's 1993 Corporate Stock Option Plan (the "Option Plan"), a
copy of which is attached hereto and incorporated by reference. The Option
granted hereunder will be a nonstatutory or nonqualified option for tax
purposes.
2. STOCKHOLDER RIGHTS. No rights or privileges of a stockholder in the
Company are conferred by reason of the granting of the Option. Optionee will not
become a stockholder in the Company with respect to the Shares unless and until
the Option has been properly exercised and the Option Price fully paid as to the
portion of the Option exercised.
3. TERMINATION. Subject to earlier termination as provided in the
Option Plan, this Option will expire, unless previously exercised in full, on
December ____________________________, 199_.
4. TERMS OF THE OPTION PLAN. The Optionee understands that the Option
Plan includes important terms and conditions that apply to this Option. Those
terms include (without limitation): important conditions to the right of the
Optionee to exercise the Option; important restrictions on the ability of the
Optionee to transfer the Option or to transfer Shares received upon exercise of
the Option; and early termination of the Option following the occurrence of
certain events, including the Optionee no longer
15
being an officer, director or employee to or of the Company or its subsidiaries.
The optionee acknowledges that he or she has read the option Plan, agrees to be
bound by its terms, and makes each of the representations required to be made by
the Optionee under it.
5. MISCELLANEOUS. This Agreement (together with the Option Plan) sets
forth the complete agreement of the parties concerning the subject matter
hereof, superseding all prior agreements, negotiations and understandings. This
Agreement will be governed by the substantive law of the State of Minnesota, and
may be executed in counterparts.
The parties hereby have entered into this Agreement as of the date set
forth above.
DYNECO INTERNATIONAL, INC.
By__________________________________
An Authorized Officer
OPTIONEE
Address:
Attachments: (l) Spousal Consent
(2) 1993 Corporate Stock Option Plan
16
SPOUSAL CONSENT
The undersigned is the spouse of the Optionee referred to in the
attached DynEco International, Inc. 1993 Corporate Stock Option Plan Agreement
(the "Agreement") . The undersigned acknowledges that he or she:
1. has received, reviewed and understands the terms of the Agreement
(including its attachments);
2. consents to the Agreement, and agrees to be bound by its terms to
the extent that he or she now has or may obtain any interest in the
Option or Shares covered by the Agreement; and
3. understands that the Company is relying upon this consent in
entering into the Agreement and in not taking further steps to protect
its interests.
Date: , 199
_______________________________
Print Name:
17
[SAMPLE FORM OF NOTICE to OPTIONEE]
MEMORANDUM
Date:_______________________
To: _________________________________
From: A.J. Ryden Chairman DynEco International, Inc.
Subject: 1993 CORPORATE STOCK OPTION PLAN
I am pleased to inform you that the Board of Directors recently awarded
you a non-statutory stock option to purchase _____________________ shares of the
Company's common stock at an exercise price of $_________________ per share.
This option was granted on ______________________, 199_ under the 1993 Corporate
Stock Option Plan and vests as of the grant date.
Please enter your address on the enclosed Stock Option Agreement, sign
the original copy of the Agreement and return it to me as soon as practicable.
Attached to the Agreement is a Spousal Consent which your spouse should sign and
date. A duplicate copy of the Agreement is included for your files. Attached to
your copy of the agreement as Exhibit A is a copy of the 1993 Corporate Stock
Option Plan.
If you desire to exercise a vested portion of your option, I will
assist you in arranging for the execution of the necessary papers. If you have
any questions regarding your option, please contact me. CONGRATULATIONS!
Enclosure
18
NOTICE OF EXERCISE OF OPTION
To: DynEco International, Inc.
Office of the Corporate Secretary
From: _________________________________
(Optionee)
Address:
_________________________________
_________________________________
_________________________________
Social Security Number: __________________________
1. EXERCISE OF OPTION. I am the holder of an option or options granted
under the 1993 Corporate Stock Option Plan (the "Plan") and that certain Stock
Option Agreement dated _________________, 199__. I hereby irrevocably elect to
exercise the purchase rights represented by such option, and to purchase
thereunder _________________________________ (______________) shares of Common
Stock of DynEco International, Inc. (the "Company") at $____________ per share,
for an aggregate exercise price of $________________, to be paid by me in one or
more of the following forms (indicate the amount for each form that applies):
[ ] $_____________________ by delivering herewith cash or a check
made payable to DynEco International, Inc.; or
[ ] $______________________ by the delivering herewith of
certificate(s) numbered ________________________ representing
shares of Common Stock of the Company with a fair market value
on the date hereof equal to $____________________ per share
(and, if such certificate represents shares in excess of the
number required to achieve the amount indicated in the left
margin, requesting that the Company or its transfer agent
deliver to me a certificate or certificates for the balance of
the shares represented thereby), together with a stock power
executed in blank; or
[ ] $_____________________ by delivering to ______________________
("Broker") an irrevocable direction (two copies of which I
have completed, executed and attached hereto), to sell that
number of shares of the stock to be acquired hereby and to
deliver the proceeds thereof to the Company in the amount
indicated in the left margin; or
[ ] $_____________________ by the delivering herewith of the Stock
Option Agreement dated _______________________________, 199__.
19
representing Options to purchase ______________________ shares
of Common Stock of the Company with the shares having a fair
market value on the date hereof equal to $______________ per
share (and, if such Stock Option Agreement represents shares
in excess of the number required to achieve the amount
indicated in the left margin, requesting that the Company or
its transfer agent deliver to me a Stock Option Agreement for
the balance of the Options represented thereby).
I request that certificate(s) for such shares be registered and issued in the
name set forth above. The certificate(s) issued upon exercise of the aforesaid
option should be mailed to my address indicated above via first class mail. I
acknowledge that the Option Exercise Date is the date upon which this notice and
the required payment are received in the Office of the Secretary of the Company.
2. OTHER ACKNOWLEDGEMENTS.
(a) I acknowledge receipt of copies of the Company's most recent
10K and/or Annual Report to Shareholders, and 10Q.
(b) I am aware that the Securities Act of 1933, as amended, and
the regulations and requirements of the Securities and
Exchange Commission thereunder, may impose limitations on the
resale of Company stock acquired pursuant to this option
exercise. I hereby certify that any resale of such stock will
be made in compliance with the Act and those regulations and
requirements.
(c) I hereby appoint ______________________________ as my agent to
accept delivery of the shares of Company stock being purchased
on my behalf pursuant to this option exercise, and request
_____________________________ to forward the certificates
representing those shares to me at the address shown above.
Dated: , 199
_______________________________
Optionee
20