- Definitions.
Each of the following terms shall have the respective meanings set forth below for purposes of this Plan, whether employed
in the singular or plural unless the particular context in which said term is used clearly indicates otherwise:
- "Option" shall mean the right to purchase a specified number shares of the Common Stock pursuant to the
terms and conditions set forth in this Plan.
- "Optionee" shall mean the recipient of Options hereunder. Any reference herein to the employment or
consultancy of an Optionee by the Company shall include Optionee's employment or consultancy by the
Company or its subsidiaries, if any.
- "Effective Date" shall mean as of June 30, 1999.
- "Plan Termination Date" shall mean the date upon which this Plan terminates.
- Purpose.
The purpose of the Synergy Technologies Corporation 1999 Directors and Employees Stock Option and Stock Award Plan
(this "Plan") is to maintain the ability of Synergy Technologies Corporation (the "Company") and its subsidiaries to attract
and retain highly qualified and experienced directors, employees and consultants and to give such directors, employees and
consultants a continued proprietary interest in the success of the Company and its subsidiaries. Pursuant to this Plan, eligible
employees and consultants will be provided the opportunity to participate in the enhancement of shareholder value through
the grants of options, stock appreciation rights, awards of restricted stock, bonuses and/or fees payable in stock, or any
combination thereof. Eligible directors will participate through awards of restricted stock as set forth in Section 9.
Employees, consultants and directors who participate or become eligible to participate in this Plan from time to time are
referred to collectively herein as "Participants". The term "subsidiary" as used in this Plan shall mean any present or future
corporation which is or would be a "subsidiary corporation" of the Company as the term is defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended from time to time (the "Code").
- Administrator of this Plan.
- Subject to the provisions of Section 5, this Plan shall be administered by the Board or by a Administrator of
the Board (in either case, hereinafter referred to as the "Administrator"). The Administrator, if so appointed,
may adopt such rules and regulations as he or she shall deem appropriate concerning this Plan, the Options
and the stock awards, and make all other determinations necessary or advisable for administering this Plan,
including, but not limited to, the persons to whom, and the time or times at which, grants shall be made, the
number of Options to be included in the grants, the length of time the Options are exercisable, the number of
Options which shall be treated as incentive stock options, the Option exercise price, and any vesting schedule
with respect to the Options. All determinations and interpretations by the Administrator shall be binding and
conclusive upon all parties.
- Each grant or award made pursuant to this Plan shall be evidenced by an Option Agreement or Award
Agreement (the "Agreement"). No person shall have any rights under any option, restricted stock or other
award granted under this Plan unless and until the person to whom such
- option, restricted stock or other award shall be granted shall have executed and delivered an Agreement to
the Company. The Administrator shall prescribe the form of all Agreements. A fully executed counterpart of
the Agreement shall be provided to both the Company and the recipient of the grant or award.
- The Company shall indemnify and hold harmless the Directors and the Administrator from and against any
and all liabilities, costs and expenses incurred by such persons as a result of any act, or omission to act, in
connection with the performance of such persons' duties, responsibilities, and obligations under this Plan,
other than such liabilities, costs and expenses as may result from the gross negligence, bad faith, willful
misconduct, and/or criminal acts of such persons.
- Shares of Stock Subject to this Plan.
The maximum number of shares of the voting common stock of the Company, $0.002 par value (the "Common Stock"), that
may be optioned or awarded under this Plan is 1,000,000 shares, subject to adjustment as provided in Section 15 hereof. No
Participant shall receive, over the term of this Plan, awards of restricted stock, awards in the form of stock appreciation
rights or options, whether incentive stock options or options other than incentive stock options, to purchase more than 20
percent of the total shares of Common Stock authorized for issuance under this Plan. Any shares subject to an Option which
for any reason expires or is terminated unexercised and any restricted stock which is forfeited may again be optioned or
awarded under this Plan; provided, however, that forfeited shares shall not be available for further awards if the Participant
has realized the benefits of ownership from such shares. Shares subject to this Plan may be either authorized and unissued
shares or issued shares repurchased or otherwise acquired by the Company or its subsidiaries.
- Grant of Options.
- The Administrator shall have the authority and responsibility, within the limitations of this Plan, to determine
the directors, employees and consultants to whom and the times at which Options are to be granted, the
number of shares of Common Stock which may be purchased under each Option, the provisions of the
respective Option Agreements (which need not be identical) including provisions concerning the time or times
when, and the extent to which, the Options may be exercised, and the Option exercise price. All Options
pursuant to this Plan shall be granted on or before the Plan Termination Date.
- In determining the directors, employees and consultants to whom Options shall be granted, the number of
shares of Common Stock to be covered by each such Option, and the provisions of the respective Option
Agreements, the Administrator shall take into consideration the director's, employee's or consultant's present
and potential contribution to the success of the Company and such other factors as the Administrator may
deem proper and relevant.
- The aggregate fair market value (determined as of the date upon which an Option is granted) of the Common
Stock for which any Optionee may exercise incentive stock options for the first time in any calendar year
(under all plans of the Company and any parent or subsidiary of the Company which plans provide for
granting of incentive stock options within the meaning of Section 422(b) of the Code) shall not exceed
$100,000.
- Eligibility.
Directors, employees, including officers, of the Company and its divisions and subsidiaries, and consultants who provide
bonafide services to the Company are eligible to be granted options, restricted stock and other awards under this Plan and to
have their bonuses and/or consulting fees payable in restricted stock and other awards. The directors, employees, and
consultants who shall receive awards or options under this Plan, and the criteria to be used in determining the award to be
made, shall be determined from time to time by the Administrator, in its sole discretion, from among those eligible, which
may be based upon information furnished to the Administrator by the Company's management; and the Administrator shall
determine, in its sole discretion, the number of shares to be covered by each award and option granted to each director,
employee, or consultant selected.
- Duration of this Plan.
No award or option may be granted under this Plan after more than ten (10) years from the earlier of the date this Plan is
adopted by the Board or the date this Plan is approved by the shareholders of the Company.
- Terms and Conditions of Stock Options.
Options granted under this Plan may be either incentive stock options, as defined in Section 422 of the Code, or Options
other than incentive stock options. Each Option shall be subject to all the applicable provisions of this Plan, including the
following terms and conditions, and to such other terms and conditions not inconsistent therewith as the Administrator shall
determine:
- The option price per share is $1.00, which has been approved by the holders of a majority of the outstanding
shares of the Company's common stock on June 29, 1999.
- The exercise of certain options granted under this Plan shall be subject to the attainment of such performance
goals, and/or during such period ending not later than ten years from the date it was granted, as may be
determined by the Administrator and stated in the Agreement. In no event may an option be exercised more
than 10 years from the date the Option was granted.
- An Option shall not be exercisable with respect to a fractional share of Common Stock or with respect to the
lesser of fifty (50) shares or the full number of shares then subject to the Option. No fractional shares of
Common Stock shall be issued upon the exercise of an Option. If a fractional share of Common Stock shall
become subject to an Option by reason of a stock dividend or otherwise, the Optionee shall not be entitled to
exercise the Option with respect to such fractional share.
- Each Option shall state whether it will or will not be treated as an incentive stock option.
- Each Option will be deemed exercised on the day written notice specifying the number of shares to be
purchased, accompanied by payment in full including, if required by law, applicable taxes, is received by the
Company. Payment, except as provided in the Agreement shall be:
- in United States dollars by check or bank draft, or
- by tendering to the Company shares of Common Stock already owned for at least six months by the
person exercising the Option, which may include shares received as the result of a prior exercise of an
Option, and having a fair market value, on the date on which the Option is exercised equal to the cash
exercise price applicable to such Option, or
- by a combination of United States dollars and shares of Common Stock valued as aforesaid.
For purposes of this Plan, fair market value shall be the mean between the highest and lowest prices at which the Common
Stock is traded on a national securities exchange or an automated securities quotation exchange on the relevant date,
provided however, if there is no sale of the Common Stock on such exchange on such date, fair market value shall be the
mean between the bid and asked prices on such exchange at the close of the market on such date. No Optionee shall have
any rights to dividends or other right of a shareholder with respect to shares of Common Stock subject to his or her option
until he or she has given written notice of exercise of such Option and paid in full for such shares.
- Notwithstanding the foregoing, the Administrator may, in its sole discretion, include in the grant of an Option
the right of a grantee (hereinafter referred to as a "stock appreciation right") to elect, in the manner described
below, in lieu of exercising his or her Option for all or a portion of the shares of Common Stock covered by
such Option, to relinquish his or her Option with respect to any or all of such shares and to receive from the
Company a payment equal in value to (x) the fair market value, as determined in accordance with Section
8(e), of a share of Common Stock on the date of such election, multiplied by the number of shares as to
which the grantee shall have made such election, less (y) the exercise price for that number of shares of
Common Stock for which the grantee shall have made such election under the terms of such Option. A stock
appreciation right shall be exercisable at the time the tandem option is exercisable, and the "expiration date"
for the stock appreciation right shall be the expiration date for the tandem option. A grantee who makes such
an election shall receive payment in the nearest whole number of shares of Common Stock having an
aggregate fair market value, as determined in accordance with Section 8(e) as of the date of election, which is
not greater than the cash amount calculated in (ii) above. A stock appreciation right may be exercised only
when the amount described in (x) above exceeds the amount described in (y) above. An election to exercise
stock appreciation rights shall be deemed to have been made on the day written notice of such election,
addressed to the Administrator, is received by the Company. An Option or any portion thereof with respect
to which a grantee has elected to exercise a stock appreciation right shall be surrendered to the Company and
such Option shall thereafter remain exercisable according to its terms only with respect to the number of
shares as to which it would otherwise be exercisable, less the number of shares with respect to which stock
appreciation rights have been exercised. The grant of a stock appreciation right shall be evidenced by an
Agreement. The Agreement evidencing stock appreciation rights shall be personal and will provide that the
stock appreciation rights will not be transferable by the grantee otherwise than by will or the laws of descent
and distribution and that they will be exercisable, during the lifetime of the grantee, only by him or her.
- Except as provided in the applicable Agreement, an Option may be exercised only if at all times during the
period beginning with the date of the granting of the Option and ending on the date of such exercise, the
grantee was a director, consultant or employee of either the Company (or of a division) or subsidiary of the
Company or of another corporation referred to in Section 421(a)(2) of the Code. The Agreement shall
provide whether, and to what extent, an Option may be exercised after termination of continuous
employment, but any such exercise shall in no event be later than the termination date of the Option. If the
grantee should die, or become permanently disabled as determined by the Administrator at any time when the
Option, or any portion thereof, shall be exercisable, the Option will be exercisable within a period provided
for in the Agreement, by the Optionee or person or persons to whom his or her rights under the Option shall
have passed by will or by the laws of descent and distribution, but in no event at a date later than the
termination of the Option. The Administrator may require medical evidence of permanent disability, including
medical examinations by physicians selected by it.
- Each Option by its terms shall be personal and shall not be transferable by the Optionee otherwise than by will
or by the laws of descent and distribution as provided in Section 8(g) above. During the lifetime of an
Optionee, the Option shall be exercisable only by the Optionee. In the event any Option is exercised by the
executors, administrators, heirs or distributees of the estate of a deceased Optionee as provided in Section
8(g) above, the Company shall be under no obligation to issue Common Stock thereunder unless and until the
Company is satisfied that the person or persons exercising the Option are the duly appointed legal
representatives of the deceased Optionee's estate or the proper legatees or distributees thereof.
- No incentive stock Option shall be granted to an employee who owns or would be treated as owning by
attribution under Code Section 424(d) immediately before the grant of such Option, directly or indirectly,
stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.
This restriction shall not apply if, (i) at the time such incentive stock Option is granted, the Option price is at
least 110% of the fair market value of the shares of Common Stock subject to the Option, as determined in
accordance with Section 8(a) on the date of grant, and (ii) the incentive stock Option by its terms is not
exercisable after the expiration of five years from the date of its grant.
- An Option and any Common Stock received upon the exercise of an Option shall be subject to such other
transfer restriction and/or legending requirements as are specified in the applicable Agreement.
- Terms and Conditions of Restricted Stock Awards.
Awards of restricted stock under this Plan shall be subject to all the applicable provisions of this Plan, including the following
terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Administrator shall
determine:
- Awards of restricted stock may be in addition to or in lieu of Option grants.
- Awards may be conditioned on the attainment of particular performance goals based on criteria established by
the Administrator at the time of each award of restricted stock. During a period set forth in the Agreement
(the "Restriction Period"), the recipient shall not be permitted to sell, transfer, pledge, or otherwise encumber
the shares of restricted stock; except that such shares may be used, if the Agreement permits, to pay the
Option price pursuant to any Option granted under this Plan, provided an equal number of shares delivered to
the Optionee shall carry the same restrictions as the shares so used.
- Shares of restricted stock shall become free of all restrictions if during the Restriction Period, (i) the recipient
dies, (ii) the recipient's directorship, employment, or consultancy terminates by reason of permanent disability,
as determined by the Administrator, (iii) the recipient retires after attaining both 59 1/2 years of age and five
years of continuous service with the Company and/or a division or subsidiary, or (iv) if provided in the
Agreement, there is a "change in control" of the Company (as defined in such Agreement). The
Administrator may require medical evidence of permanent disability, including medical examinations by
physicians selected by it.
- Unless and to the extent otherwise provided in the Agreement, shares of restricted stock shall be forfeited and
revert to the Company upon the recipient's termination of directorship, employment or consultancy during the
Restriction Period for any reason other than death, permanent disability, as determined by the Administrator,
retirement after attaining both 59 1/2 years of age and five years of continuous service with the Company
and/or a subsidiary or division, or, to the extent provided in the Agreement, a "change in control" of the
Company (as defined in such Agreement), except to the extent the Administrator, in its sole discretion, finds
that such forfeiture might not be in the best interests of the Company and, therefore, waives all or part of the
application of this provision to the restricted stock held by such recipient.
- Stock certificates for restricted stock shall be registered in the name of the recipient but shall be appropriately
legended and returned to the Company by the recipient, together with a stock power endorsed in blank by the
recipient. The recipient shall be entitled to vote shares of restricted stock and shall be entitled to all dividends
paid thereon, except that dividends paid in Common Stock or other property shall also be subject to the same
restrictions.
- Restricted Stock shall become free of the foregoing restrictions upon expiration of the applicable Restriction
Period and the Company shall then deliver to the recipient Common Stock certificates evidencing such stock.
- Restricted stock and any Common Stock received upon the expiration of the restriction period shall be
subject to such other transfer restrictions and/or legending requirements as are specified in the applicable
Agreement.
- Bonuses and Past Salaries and Fees Payable in Stock.
- In lieu of cash bonuses otherwise payable under the Company's or applicable division's or subsidiary's
compensation practices to employees and consultants eligible to participate in this Plan, the Administrator, in
its sole discretion, may determine that such bonuses shall be payable in Common Stock or partly in Common
Stock and partly in cash. Such bonuses shall be in consideration of services previously performed and as an
incentive toward future services and shall consist of shares of Common Stock subject to such terms as the
Administrator may determine in its sole discretion. The number of shares of Common Stock payable in lieu of
a bonus otherwise payable shall be determined by dividing such bonus amount by the fair market value of one
share of Common Stock on the date the bonus is payable, with fair market value determined as of such date in
accordance with Section 8(e).
- In lieu of salaries and fees otherwise payable by the Company's to employees and consultants eligible to
participate in this Plan that were incurred for services rendered during the years of 1997and/or, the
Administrator, in its sole discretion, may determine that such unpaid salaries and fees shall be payable in
Common Stock or partly in Common Stock and partly in cash. Such awards shall be in consideration of
services previously performed and as an incentive toward future services and shall consist of shares of
Common Stock subject to such terms as the Administrator may determine in its sole discretion. The number
of shares of Common Stock payable in lieu of a salaries and fees otherwise payable shall be determined by
dividing each calendar month's of unpaid salary or fee amount by the average trading value of the Common
Stock for the calendar month during which the subject services were provided.
- Change in Control.
Each Agreement may, in the sole discretion of the Administrator, provide that any or all of the following actions may be
taken upon the occurrence of a change in control (as defined in the Agreement) with respect to the Company:
- acceleration of time periods for purposes of vesting in, or realizing gain from, or exercise of any outstanding
Option or stock appreciation right or shares of restricted stock awarded pursuant to this Plan;
- offering to purchase any outstanding option or stock appreciation right or shares of restricted stock made
pursuant to this Plan from the holder for its equivalent cash value, as determined by the Administrator, as of
the date of the change in control; or
- making adjustments or modifications to outstanding options or stock appreciation rights or with respect to
restricted stock as the Administrator deems appropriate to maintain and protect the rights and interests of the
Participants following such change in control, provided, however, that the exercise period of any option may
not be extended beyond 10 years from the date of grant.
- Transfer, Leave of Absence.
For purposes of this Plan:
- transfer of an employee from the Company the division or subsidiary of the Company, whether or not
incorporated, or vice versa, or from one division or subsidiary of the Company to another, and
- a leave of absence, duly authorized in writing by the Company or a subsidiary or division of the Company,
shall not be deemed a termination of employment.
- Rights of Directors, Employees and Consultants.
- No person shall have any rights or claims under this Plan except in accordance with the provisions of this Plan
and each Agreement.
- Nothing contained in this Plan and Agreement shall be deemed to give any employee or consultant the right to
continued employment by the Company or its divisions or subsidiaries.
- Withholding Taxes.
The Company shall require a payment from a Participant to cover applicable withholding for income and employment taxes
upon the happening of any event pursuant to this Plan which requires such withholding. The Company reserves the right to
offset such tax payment from any funds which may be due the Participant from the Company or its subsidiaries or divisions
or, in its discretion, to the extent permitted by applicable law, to accept such tax payment through the delivery of shares of
Common Stock owned by the Participant or by utilizing shares of the Common Stock which were to be delivered to the
Participant pursuant to this Plan, having an aggregate fair market value, determined as of the date of payment, equal to the
amount of the payment due.
- Adjustments.
In the event of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations, exchanges of shares,
spin-offs, liquidations, reclassifications or other similar changes in the capitalization of the Company, the number of shares of
Common Stock available for grant under this Plan shall be adjusted appropriately by the Board, and, where deemed
appropriate, the number of shares covered by outstanding stock options and stock appreciation rights outstanding and the
number of shares of restricted stock outstanding, and the option price of outstanding stock options, shall be similarly
adjusted. If another corporation or other business entity is acquired by the Company, and the Company has assumed
outstanding employee option grants under a prior existing plan of the acquired entity, similar adjustments are permitted at the
discretion of the Administrator. In the event of any other change affecting the shares of Common Stock available for awards
under this Plan, such adjustment, if any, as may be deemed equitable by the Administrator, shall be made to preserve the
intended benefits of this Plan giving proper effect to such event.
- Miscellaneous Provisions.
- This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or
to make any other segregation of assets to assure the issuance of shares or the payment of cash upon exercise
of any option or stock appreciation right under this Plan. The expenses of this Plan shall be borne by the
Company.
- The Administrator may, at any time and from time to time after the granting of an option or the award of
restricted stock or bonuses payable in Common Stock hereunder, specify such additional terms, conditions
and restrictions with respect to such option or stock as may be deemed necessary or appropriate to ensure
compliance with any and all applicable laws, including, but not limited to, the Code, federal and state
securities laws and methods of withholding or providing for the payment of required taxes.
- If at any time the Administrator shall determine in its discretion that the listing, registration or qualification of
shares of Common Stock upon any national securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the sale or purchase of shares of Common Stock hereunder, no option or stock appreciation
right may be exercised or restricted stock or stock bonus may be transferred in whole or in part unless and
until such listing registration, qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Administrator.
- By accepting any benefit under this Plan, each Participant and each person claiming under or through such
Participant shall be conclusively deemed to have indicated his acceptance and ratification, and consent to, any
action taken under this Plan by the Administrator, the Company or the Board.
- This Plan shall be governed by and construed in accordance with the laws of the State of Colorado.
- Administrator members exercising their functions under this Plan are serving as directors of the Company and
they shall therefore be entitled to all rights of indemnification and advancement of expenses accorded
directors of the Company.
- Limits of Liability.
- Any liability of the Company or a subsidiary of the Company to any Participant with respect to any option or
award shall be based solely upon contractual obligations created by this Plan and Agreement.
- Neither the Company nor a division or subsidiary of the Company, nor any member of the Administrator or
the Board, nor any other person participating in any determination of any question under this Plan, or in the
interpretation, administration or application of this Plan, shall have any liability to any party for any action
taken or not taken in connection with this Plan, except as may expressly be provided by statute.
- Amendments and Termination.
The Board may, at any time, amend, alter or discontinue this Plan; provided, however, no amendment, alteration or
discontinuation shall be made which would impair the rights of any holder of an award of restricted stock, option, stock
appreciation rights or stock bonus theretofore granted, without his or her written consent, or which, without the approval of
the shareholders would:
- except as provided in Section 15, increase the maximum number of shares of Common Stock which may be
issued under this Plan;
- except as provided in Section 15, decrease the option price of an Option (and related stock appreciation
rights, if any) to less than 100% of the fair market value (as determined in accordance with Section 8(e)) of a
share of Common Stock on the date of the granting of the Option (and related stock appreciation rights, if
any);
- materially change the class of persons eligible to receive an award of restricted stock or options or stock
appreciation rights under this Plan;
- extend the duration of this Plan; or
- materially increase in any other way the benefits accruing to Participants.
- Duration.
This Plan shall be adopted by the Board and approved by the Company's shareholders and such regulatory bodies as may be
necessary, which approvals must occur within the period ending twelve months after the date this Plan is adopted. Subject to
such approvals, grants and awards may be made under this Plan between the date of its adoption and receipt of such
approvals. This Plan shall terminate upon the earlier of the following dates or events to occur:
- upon the adoption of a resolution of the Board terminating this Plan;
- the date all shares of Common Stock subject to this Plan are purchased according to this Plan's provisions; or
- ten years from the date of adoption of this Plan by the Board.
No such termination of this Plan shall adversely affect the rights of any Participant hereunder and all options or stock
appreciation rights previously granted and restricted stock and stock bonuses awarded hereunder shall continue in force and
in operation after the termination of this Plan, except as they may be otherwise terminated in accordance with the terms of
this Plan.
- Other Compensation Plans.
This Plan shall not be deemed to preclude the implementation by the Company or its divisions or subsidiaries of other
compensation plans which may be in effect from time to time, nor adversely affect any rights of Participants under any other
compensation plans of the Company or its divisions or subsidiaries.
- Non-Transferability.
No right or interest in any award granted under this Plan shall be assignable or transferable, except as set forth in this Plan
and required by law, and no right or interest of any participant in any award shall be liable for, or subject to, any lien,
obligation or liability except as set forth in this Plan or as required by law.