EXHIBIT 4
INNOCAP, INC.
2004 NON-STATUTORY STOCK OPTION PLAN
1. Purpose of this Plan
This Non-Statutory Stock Option Plan (the "Plan") is intended as an employment
incentive, to aid in attracting and retaining in the employ or service of
Innocap, Inc. (the "Company"), a Nevada corporation, and any Affiliated
Corporation, persons of experience and ability and whose services are considered
valuable, to encourage the sense of proprietorship in such persons, and to
stimulate the active interest of such persons in the development and success of
the Company. This Plan provides for the issuance of non-statutory stock options
("NSOs" or "Options") which are not intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Administration of this Plan
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee (the "Committee") of the
Board which shall consist of at least three members of the Board. Until such
time as the Committee is duly constituted, the Board itself shall have and
fulfill the duties herein allocated to the Committee. The Committee shall have
full power and authority to designate Plan participants, to determine the
provisions and terms of respective NSOs (which need not be identical as to
number of shares covered by any NSO, the method of exercise as related to
exercise in whole or in installments, or otherwise), including the NSO price,
and to interpret the provisions and supervise the administration of this Plan.
The Committee may, in its discretion, provide that certain NSOs not vest (that
is, become exercisable) until expiration of a certain period after issuance or
until other conditions are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum. All
decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. If at any time the Board shall consist of seven or
more members, then the Board may amend this Plan to provide that the Committee
shall consist only of Board members who shall not have been eligible to
participate in this Plan (or similar stock or stock option plan) of the Company
or its affiliates at any time within one year prior to appointment to the
Committee.
All NSOs granted under this Plan are subject to, and may not be exercised
before, the approval of this Plan by the holders of a majority of the Company's
outstanding shares, and if such approval is not obtained, all NSOs previously
granted shall be void. Each NSO shall be evidenced by a written agreement
containing terms and conditions established by the Committee consistent with the
provisions of this Plan.
3. Designation of Participants
The persons eligible for participation in this Plan as recipients of NSOs shall
include full-time and part-time employees (as determined by the Committee) and
officers of the Company or of an Affiliated Corporation. In addition, directors
of the Company or any Affiliated Corporation who are not employees of the
Company or an Affiliated Corporation and any attorney, consultant or other
adviser to the Company or any Affiliated Corporation shall be eligible to
participate in this Plan. For all purposes of this Plan, any director who is not
also a common law employee and is granted an option under this Plan shall be
considered an "employee" until the effective date of the director's resignation
or removal from the Board of Directors, including removal due to death or
disability. The Committee shall have full power to designate, from among
eligible individuals, the persons to whom NSOs may be granted. A person who has
been granted an NSO hereunder may be granted an additional NSO or NSOs, if the
Committee shall so determine. The granting of an NSO shall not be construed as a
contract of employment or as entitling the recipient thereof to any rights of
continued employment.
4. Stock Reserved for this Plan
Subject to adjustment as provided in Paragraph 9 below, a total of 20,000,000
shares of Common Stock ("Stock"), of the Company shall be subject to this Plan.
The Stock subject to this Plan shall consist of un-issued shares or previously
issued shares reacquired and held by the Company or any Affiliated Corporation,
and such amount of shares shall be and is hereby reserved for sale for such
purpose. Any of such shares which may remain unsold and which are not subject to
outstanding NSOs at the termination of this Plan shall cease to be reserved for
the purpose of this Plan, but until termination of this Plan, the Company shall
at all times reserve a sufficient number of shares to meet the requirements of
this Plan. Should any NSO expire or be canceled prior to its exercise in full,
the unexercised shares theretofore subject to such NSO may again be subjected to
an NSO under this Plan.
5. Option Price
The purchase price of each share of Stock placed under NSO shall not be less
than ten percent (10%) of the fair market value of such share on the date the
NSO is granted. The fair market value of a share on a particular date shall be
deemed to be the average of either (i) the highest and lowest prices at which
shares were sold on the date of grant, if traded on a national securities
exchange, (ii) the high and low prices reported in the consolidated reporting
system, if traded on a "last sale reported" system, such as NASDAQ, or (iii) the
high bid and high asked price for over-the-counter securities. If no
transactions in the Stock occur on the date of grant, the fair market value
shall be determined as of the next earliest day for which reports or quotations
are available. If the common shares are not then quoted on any exchange or in
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any quotation medium at the time the option is granted, then the Board of
Directors or Committee will use its discretion in selecting a good faith value
believed to represent fair market value based on factors then known to them. The
cash proceeds from the sale of Stock are to be added to the general funds of the
Company.
6. Exercise Period
a) The NSO exercise period shall be a term of not more than ten (10) years
from the date of granting of each NSO and shall automatically
terminate:
1) Upon termination of the optionee's employment with the Company for
cause;
2) At the expiration of twelve (12) months from the date of termination
of the optionee's employment with the Company for any reason other
than death, without cause; provided, that if the optioned dies within
such twelve month period, subclause (iii) below shall apply; or
3) At the expiration of fifteen (15) months after the date of death of
the optioned.
b) "Employment with the Company" as used in this Plan shall include
employment with any Affiliated Corporation, and NSOs granted under this
Plan shall not be affected by an employee's transfer of employment
among the Company and any Parent or Subsidiary thereof. An optionee's
employment with the Company shall not be deemed interrupted or
terminated by a bona fide leave of absence (such as sabbatical leave or
employment by the Government) duly approved, military leave, maternity
leave or sick leave.
7. Exercise of Options
a) The Committee, in granting NSOs, shall have discretion to determine the
terms upon which NSOs shall be exercisable, subject to applicable
provisions of this Plan. Once available for purchase, un-purchased
shares of Stock shall remain subject to purchase until the NSO expires
or terminates in accordance with Paragraph 6 above. Unless otherwise
provided in the NSO, an NSO may be exercised in whole or in part, one
or more times, but no NSO may be exercised for a fractional share of
Stock.
b) NSOs may be exercised solely by the optioned during his lifetime, or
after his death (with respect to the number of shares which the
optioned could have purchased at the time of death) by the person or
persons entitled thereto under the decedent's will or the laws of
descent and distribution.
c) The purchase price of the shares of Stock as to which an NSO is
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exercised shall be paid in full at the time of exercise and no shares
of Stock shall be issued until full payment is made therefore. Payment
shall be made either (i) in cash, represented by bank or cashier's
check, certified check or money order or (ii) in lieu of payment for
bona fide services rendered, and such services were not in connection
with the offer or sale of securities in a capital raising transaction,
(iii) by delivering shares of the Company's Common Stock which have
been beneficially owned by the optioned, the optionee's spouse, or
both of them for a period of at least six (6) months prior to the time
of exercise (the "Delivered Stock") in a number equal to the number of
shares of Stock being purchased upon exercise of the NSO or (iv) by
delivery of shares of corporate stock which are freely tradable without
restriction and which are part of a class of securities which has been
listed for trading on the NASDAQ system or a national securities
exchange, with an aggregate fair market value equal to or greater than
the exercise price of the shares of Stock being purchased under the
NSO, or (v) a combination of cash, services, Delivered Stock or other
corporate shares. An NSO shall be deemed exercised when written notice
thereof, accompanied by the appropriate payment in full, is received by
the Company. No holder of an NSO shall be, or have any of the rights
and privileges of, a shareholder of the Company in respect of any
shares of Stock purchasable upon exercise of any part of an NSO unless
and until certificates representing such shares shall have been issued
by the Company to him or her.
8. Assignability
No NSO shall be assignable or otherwise transferable (by the optioned or
otherwise) except by will or the laws of descent and distribution or except as
permitted in accordance with SEC Release No.33-7646 as effective April 7, 1999
and in particular that portion thereof which expands upon transferability as is
contained in Article III entitled "Transferable Options and Proxy Reporting" as
indicated in Section A 1 through 4 inclusive and Section B thereof. No NSO shall
be pledged or hypothecated in any manner, whether by operation of law or
otherwise, nor be subject to execution, attachment or similar process.
9. Reorganizations and Recapitalizations of the Company
a) The existence of this Plan and NSOs granted hereunder shall not affect
in any way the right or power of the Company or its shareholders to
make or authorize any and all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or
its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead
of or affecting the Company's Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any sale, exchange or
transfer of all or any part of its assets or business, or the other
corporation act or proceeding, whether of a similar character or
otherwise.
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b) The shares of Stock with respect to which NSOs may be granted hereunder
are shares of the Common Stock of the Company as currently
constituted. If, and whenever, prior to delivery by the Company of all
of the shares of Stock which are subject to NSOs granted hereunder,
the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a Stock dividend, a stock
split, combination of shares (reverse stock split) or recapitalization
or other increase or reduction of the number of shares of the Common
Stock outstanding without receiving compensation therefore in money,
services or property, then the number of shares of Stock available
under this Plan and the number of shares of Stock with respect to
which NSOs granted hereunder may thereafter be exercised shall (i) in
the event of an increase in the number of outstanding shares, be
proportionately increased, and the cash consideration payable per
share shall be proportionately reduced; and (ii) in the event of a
reduction in the number of outstanding shares, be proportionately
reduced, and the cash consideration payable per share shall be
proportionately increased.
c) If the Company is reorganized, merged, consolidated or party to a plan
of exchange with another corporation pursuant to which shareholders of
the Company receive any shares of stock or other securities, there
shall be substituted for the shares of Stock subject to the
unexercised portions of outstanding NSOs an appropriate number of
shares of each class of stock or other securities which were
distributed to the shareholders of the Company in respect of such
shares of Stock in the case of a reorganization, merger, consolidation
or plan of exchange; provided, however, that all such NSOs may be
canceled by the Company as of the effective date of a reorganization,
merger, consolidation, plan of exchange, or any dissolution or
liquidation of the Company, by giving notice to each optioned or his
personal representative of its intention to do so and by permitting
the purchase of all the shares subject to such outstanding NSOs for a
period of not less than thirty (30) days during the sixty (60) days
next preceding such effective date.
d) Except as expressly provided above, the Company's issuance of shares of
Stock of any class, or securities convertible into shares of Stock of
any class, for cash or property, or for labor or services, either upon
direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into shares of Stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to NSOs granted hereunder or the
purchase price of such shares.
10. Purchase for Investment
Unless the shares of Stock covered by this Plan have been registered under the
Securities Act of 1933, as amended, each person exercising an NSO under this
Plan may be required by the Company to give a representation in writing that he
is acquiring such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof.
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11. Effective Date and Expiration of this Plan
This Plan shall be effective as of January 27, 2004 the date of its adoption by
the Board, subject to the approval of the Company's shareholders, and no NSO
shall be granted pursuant to this Plan after its expiration. This Plan shall
expire on January 26, 2014 except as to NSOs then outstanding, which shall
remain in effect until they have expired or been exercised.
12. Amendments or Termination
The Board may amend, alter or discontinue this Plan at any time in such respects
as it shall deem advisable in order to conform to any change in any other
applicable law, or in order to comply with the provisions of any rule or
regulation of the Securities and Exchange Commission required to exempt this
Plan or any NSOs granted thereunder from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or in any other
respect not inconsistent with Section 16(b) of the Exchange Act; provided, that
no amendment or alteration shall be made which would impair the rights of any
participant under any NSO theretofore granted, without his consent (unless made
solely to conform such NSO to, and necessary because of, changes in the
foregoing laws, rules or regulations), and except that no amendment or
alteration shall be made without the approval of shareholders which would:
a) Decrease the NSO price provided for in Paragraph 5 (except as provided
in Paragraph 9), or change the classes of persons eligible to
participate in this Plan as provided in Paragraph 3; or
b) Extend the NSO period provided for in Paragraph 6; or
c) Materially increase the benefits accruing to participants under this
Plan; or
d) Materially modify the requirements as to eligibility for participation
in this Plan; or
e) Extend the expiration date of this Plan as set forth in Paragraph 11.
13. Government Regulations
This Plan, and the granting and exercise of NSOs hereunder, and the obligation
of the Company to sell and deliver shares of Stock under such NSOs, shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
14. Liability
No member of the Board of Directors, the Committee or officers or employees of
the Company or any Affiliated Corporation shall be personally liable for any
action, omission or determination made in good faith in connection with this
Plan.
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15. Miscellaneous.
The term "Affiliated Corporation" used herein shall mean any Parent or
Subsidiary.
a) The term "Parent" used herein shall mean any corporation owning 50
percent or more of the total combined voting stock of all classes of
the Company or of another corporation qualifying as a Parent within
this definition.
b) The term "Subsidiary" used herein shall mean any corporation more than
50 percent of whose total combined voting stock of all classes is held
by the Company or by another corporation qualifying as a Subsidiary
within this definition.
16. Options in Substitution for Other Options
The Committee may, in its sole discretion, at any time during the term of this
Plan, grant new options to an employee under this Plan or any other stock option
plan of the Company on the condition that such employee shall surrender for
cancellation one or more outstanding options which represent the right to
purchase (after giving effect to any previous partial exercise thereof) a number
of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Option may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Corporation, or the merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the Company or an Affiliated Corporation of the assets of the employing
corporation, or the acquisition by the Company or an Affiliated Corporation of
stock of the employing corporation as the result of which it becomes an
Affiliated Corporation.
17. Withholding Taxes
Pursuant to applicable federal and state laws, the Company may be required to
collect withholding taxes upon the exercise of a NSO. The Company may require,
as a condition to the exercise of a NSO, that the optioned concurrently pay to
the Company the entire amount or a portion of any taxes which the Company is
required to withhold by reason of such exercise, in such amount as the Committee
or the Company in its discretion may determine. In lieu of part or all of any
such payment, the optioned may elect to have the Company withhold from the
shares to be issued upon exercise of the option that number of shares having a
Fair Market Value equal to the amount which the Company is required to withhold.
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18. Transferability in accordance With SEC Release No. 33-7646 entitled
"Registration of Securities on Form S-8" as effective April 7, 1999
Notwithstanding anything to the contrary as may be contained in this Plan
regarding rights as to transferability or lack thereof, all options granted
hereunder may and shall be transferable to the extent permitted in accordance
with SEC Release No. 33-7646 entitled "Registration of Securities on Form S-8"
as effective April 7, 1999 and in particular in accordance with that portion of
such Release which expands Form S-8 to include stock option exercise by family
members so that the rules governing the use of Form S-8 (a) do not impede
legitimate intra family transfer of options and (b) may facilitate transfer for
estate planning purposes - all as more specifically defined in Article III,
Sections A and B thereto, the contents of which are herewith incorporated by
reference.
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CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that the
foregoing Innocap, Inc. Non-Statutory Stock Option Plan was duly approved by the
requisite number of holders of the issued and outstanding Common Stock of this
corporation as of January 27, 2004.
/s/ B. Alva Schoomer
By:
President and Chief Financial Officer
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