CENTREX, INC.
1998 INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan. The CENTREX, INC. 1998 Incentive Stock Option Plan
(the "Plan") is intended to advance the interests of CENTREX, INC. ("Company")
by providing its directors, officers, key employees and key advisors who have
substantial responsibility for the direction and management of the Company with
incentive for them to promote the success of the Company, to establish and
encourage them to increase their proprietary interest in the Company, and to
encourage them to remain in its service. These aims will be achieved through the
granting of incentive stock options to purchase shares of the common stock of
the Company, par value $.001 per share ("Common Stock"). It is intended that
options granted under the Plan and designated by the Committee under Paragraph 2
will qualify as Incentive Stock Options ("Options") under Section 422A of the
Internal Revenue Code of 1954, as amended, (the "Code"), and the terms of the
Plan shall be interpreted in accordance with this intention. Notwithstanding
anything herein to the contrary, all actions taken shall be in accordance with
the Code and with this Plan.
2. Administration of the Plan. The Board of Directors shall appoint a
Committee or the Board of Directors may act as the Committee to administer this
Plan. The Board may from time to time appoint members to the Committee in
substitution for members previously appointed and may fill vacancies, however
caused, in the Committee. The Committee shall select one of its members as its
Chairman and shall hold its meetings at such times and places as it shall deem
advisable. All action of the Committee shall be taken by majority vote of its
members. Any action may be taken by a written instrument signed by all the
members of the Committee, and action so taken shall be as effective as if that
action had been taken by a majority vote of the Committee members at a meeting
duly called and held. The Committee may appoint a secretary to keep minutes of
its meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable. The Committee may take any action by
written consent of a majority of the members of the Committee, taken either
before or after such action.
3. Grant of Options. Subject to any applicable limitation in federal tax
laws from time to time, the Committee shall have complete and full authority in
its discretion: (i) to determine and designate persons entitled to participate
from the Company and its subsidiaries who are to receive Options, (ii) to
authorize the granting of Options, (iii) to establish the number of shares to be
covered by such Options including the terms thereof; and (iv) to interpret the
Plan and to prescribe, amend, and rescind rules and regulations relating to it.
All decisions of the Committee shall be final and binding.
4. Stock Subject to the Plan. The aggregate number of shares which may be
issued under Options granted under the Plan shall not exceed 3,000,000 shares of
Common Stock. Such shares may consist of authorized but unissued shares of
Common stock or previously issued shares of Common Stock reacquired by the
Company. Any shares subject to an Option under the Plan which remain unissued
upon the termination of the Option and which are not subject to outstanding
Options at the termination of the Plan, shall cease to be subject to the Plan,
but until termination of the Plan, the Company shall at all times make available
sufficient shares to meet the requirements
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of the Plan. Should any Option hereunder expire or terminate prior to its
exercise in full, the shares theretofore subject to such Option may again be
subject to a new Option granted under the Plan. The aggregate number of shares
which may be issued under the Plan shall be subject to adjustments as provided
in Paragraph 6(j) hereof.
5. Eligibility. The persons eligible to participate in the Plan as
recipients of Options shall include only directors, officers, key employees and
key advisers of the Company and its subsidiaries. The term "key employee" shall
include directors, officers, executives, and supervisory personnel, as well as
other employees and principal advisors of the Company or a subsidiary
corporation of the Company. The term "subsidiary corporation" shall for the
purpose of this Plan be defined in the same manner as such term is defined in
Section 425(f) of the Code. A person who has been granted Options hereunder
shall remain eligible to receive an additional Option or Options, if the
Committee shall so determines. Options granted to different recipients and at
different times need not contain similar provisions.
6. Terms and Conditions. Each Option granted under the Plan shall be
evidenced by a written Incentive Stock Option Agreement ("Option Agreement"), in
a form approved by the Committee, which shall be subject to the following
express terms and conditions and to such other terms and conditions as the
Committee may deem appropriate.
(a) Option Period. Each Option Agreement shall specify the period for
which the Option thereunder is granted (which in no event shall exceed ten
years from the date of grant) and shall provide that the Option shall
expire at the end of such period. However, in the case of an Option granted
to an individual who, at the time of grant, owns more than ten percent of
the total combined voting power of all classes of Common Stock of the
Company ("Ten Percent Stockholder") on the date the Option is granted to
him, the Option period shall not exceed five years from the date of grant.
(b) Option Price. The purchase price under each Option issued shall be
determined by the Committee at the time the Option is granted, but in no
event shall such purchase price be less than 100 percent of the fair market
value of the Company's Common Stock. In the case of an Option granted to a
Ten Percent Stockholder, the Option price shall not be less than 110
percent of the fair market value of the Common Stock subject to the Option,
on the date the Option is granted.
(c) Exercise Period. Each Option Agreement shall provide that the
Option therein granted may be exercised in whole or in part at any time
after the Option grant or vested in such installments as the Committee or
Board of Directors may specify. However, no portion of any Option may be
exercisable prior to the approval of the Plan by the shareholders of the
Company.
(d) Procedure for Exercise. Options shall be exercised by the delivery
of written notice to the Company setting forth the number of shares with
respect to which the Option
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is to be exercised. Such notice shall be accompanied by cash or certified
check, bank draft, and specifying the address to which the certificates for
such shares are to be mailed. As promptly as practicable after receipt of
such written notification and payment, the Company shall deliver to the
Optionee, certificates for the number of shares with respect to which such
Option has been so exercised, issued in the optionee's name; provided,
however, that such delivery shall be deemed effected for all purposes when
a stock transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the Optionee, at the
address specified pursuant to this paragraph 6(d).
(e) Termination of Employment. If a person to whom an Option has been
granted ceases to be employed by the Company or any one of its subsidiaries
for any reason other than death or disability or ceases to be an advisor to
the Company, the Options theretofore granted to such a person under this
Plan to the extent not theretofore exercised, shall forthwith terminate.
Any Options which are exercisable on the date of such termination of
employment may be exercised during a three month period beginning on such
date; provided, however, if an Optionee's employment is terminated because
of the Optionee's dishonesty, theft, embezzlement from the Company,
disclosing trade secrets of the Company, or willful misconduct while in the
employment of the Company, then any Option or unexercised portion thereof
granted to said Optionee shall expire upon such termination of employment.
(f) Disability or Death of Optionee. In the event of the disability or
death of an Option holder under the Plan while, the Options previously
granted may be exercised (to the extent he would have been entitled to do
so at the date of his disability or death) at any time and from time to
time, within a period of one year after Optionee's disability or death, by
the executor or administrator of Optionee's estate, by the person or
persons to whom Optionee's rights under the Option shall pass by will or
the laws of descent and distribution, but in no event may the Option be
exercised after its stated expiration. An Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, the
Optionee is incapable of performing services for the Company or any of its
subsidiaries by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long,
continued and indefinite duration.
(g) Transferability. Any Option granted hereunder may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution and shall be
exercisable, during the Optionee's lifetime, only by him.
(h) Rights as a Stockholder. An Optionee or a transferee of an Option
under the Plan has no rights as a stockholder with respect to shares
covered by an Option until the date he validly exercises the Option in
accordance herewith including full payment for the exercised Option shares;
except as provided in paragraph 6(j), no adjustment for dividends, or
otherwise shall be made if the record date therefor is prior to the date on
which he became or becomes the holder of record thereof.
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(i) Extraordinary Corporate Transactions. In the event of (i) the
dissolution or liquidation of the Company, or similar occurrence, (ii) any
merger, consolidation, acquisition, separation, reorganization, or similar
occurrence, where the Company will not be a surviving entity or (iii) a
transfer of substantially all of the assets of the Company or more than 80%
of the outstanding Common Stock, the Option rights granted hereunder shall
terminate and thereupon become null and void; provided, however, that each
Optionee shall have the right immediately prior to or concurrently with
such dissolution, liquidation, merger, consolidation, acquisition,
separation, reorganization or similar occurrence, to exercise any Option
rights granted hereunder, without regard to an option period or of any
limitations thereunder.
(j) Changes in Company's Capital Structure. The existence of the Plan
and outstanding Options granted hereunder shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any
or 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 issuance of bonds, debentures,
preferred or prior preference stock senior to or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or
otherwise; provided, however, if the outstanding shares of Common Stock of
the Company shall at any time be changed or exchanged by declaration of a
stock dividend, stock split, combination of shares, or recapitalization,
the number and kind of shares subject to the Plan or subject to any Options
theretofore granted, and the Option prices, shall be appropriately and
equitably adjusted so as to maintain the proportionate number of shares
without changing the aggregate Option price.
(k) Investment Representation. Shares of Common Stock shall not be
issued and delivered with respect to an Option granted under the Plan
unless issuance of such shares (i) complies with all relevant provisions of
law including, without limitation the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, or (ii) the Committee has received evidence
satisfactory to it to the effect that an exemption from registration under
the Securities Act and any applicable state securities laws is available
for the sale and issuance contemplated. Each Option Agreement shall contain
an agreement that upon demand by the Committee for such a representation,
the optionee (or any person acting under paragraph 6(f)) shall deliver to
the Committee at the time of any exercise of an Option a written
representation that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation
prior to the delivery of any shares issued upon exercise of an Option and
prior to the expiration of the Option period shall be a condition precedent
to the right of the optionee or such other person to purchase any shares.
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(l) Option Agreement. Each Option Agreement which provides for the
grant of an Option to a key employee shall contain such terms and
provisions as the Committee may determine to be necessary or desirable in
order to qualify such Option under Section 422A of the Code.
7. Amendments or Termination. The Board of Directors may at any time and
from time to time amend, alter or terminate the Plan, but no amendment or
alteration shall be made which would impair the rights of any optionee under any
Option theretofore granted without his consent, or which, without the approval
of the holders of at least a majority of the shares of Common Stock at the time
outstanding, would: (i) except as is provided in paragraph 6(j) of the Plan,
increase the minimum number of shares reserved for the purposes of the Plan or
reduce the Option price provided for in paragraph 6(b) of the Plan, (ii) change
the class of persons eligible to participate in the Plan as provided in
paragraph 4 of the Plan, (iii) extend the Option period provided for in
paragraph 6(a) of the Plan, or (iv) extend the expiration date of this Plan set
forth in paragraph 9 of the Plan.
8. Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver shares under such Options shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any governmental or
regulatory agency or national securities exchange as may be required, and shall
be further subject to counsel for the Company with respect to such compliance.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of such shares under any federal or state law or any ruling or
regulation of any government body or national securities exchange which the
Company shall, in its sole discretion, determine to be necessary or advisable
and the Company shall have no obligation to effect any such registration or
qualification.
9. Effectiveness and Expiration of Plan. The Plan shall be effective on the
date the Board of Directors of the Company adopts the Plan. If the holders of at
least a majority of the shares of Common Stock at the time outstanding fail to
approve the Plan within twelve months after the date the Board of Directors
approved the Plan, the Plan shall thereupon terminate and all Options previously
granted under the Plan shall immediately become null and void. The Plan shall
expire ten years after the effective date of the Plan and thereafter no Option
shall be granted pursuant to the Plan.
10. Liability of Company. The Company, its parent or any subsidiary which
is in existence or thereafter comes into existence shall not be liable to an
optionee or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of shares as
to which the Company has been unable to obtain from any regulatory body
having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares hereunder; and
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(b) Tax Consequences. Any tax consequence expected, but not realized,
by any Optionee or other person due to the exercise of any Option granted
hereunder.
11. Use of Proceeds. The proceeds received by the Company from the sale of
Common Stock pursuant to the exercise of Options granted under the Plan shall be
added to the general funds and used for general corporate purposes.
12. Governing Law. This Plan shall be interpreted and construed in
accordance with the laws of the State of Oklahoma.
13. Incorporated by Reference. The Plan hereby granted includes all
technical corrections, modifications, alterations and amendments to the Internal
Revenue Code 1986 applicable to incentive stock option plans generally, and all
regulations, administrative pronouncements and interpretations thereof are
hereby incorporated herein automatically effective immediately upon the
effective date thereof. All options granted under the Plan and all Option
Agreements executed pursuant to the terms of the Plan hereby incorporate all
applicable provisions of all amendments, revisions, modifications and
alterations as hereby and as hereafter adopted to the extent permitted by law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing, CENTREX, INC. has caused these presents to be duly executed in its
name and behalf by its proper officers thereunto duly authorized, and its
corporate seal to be affixed hereto this 1st day of November, 1998.
CENTREX, INC.
By: _____________________________
Gifford Mabie, President
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