(Exhibit 4.1)
EXTEN INDUSTRIES, INC.
2000 EMPLOYEE BENEFIT PLAN
"This document constitutes part of the prospectus covering securities
that have been registered under the Securities Act of 1933"
1. PURPOSE
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The Plan is intended to provide incentive to key employees, officers and
directors of, and key consultants, vendors, customers, and others who provide
significant services to, the Corporation, to encourage proprietary interest in
the Corporation, to encourage such key employees to remain in the employ of the
Corporation and its Subsidiaries, to attract new employees with outstanding
qualifications, and to afford additional incentive to consultants, vendors,
customers, and others to increase their efforts in providing significant
services to the Corporation.
2. DEFINITIONS
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a. "Award" shall mean a Performance Award or a Stock Payment granted
pursuant to the Plan.
b. "Board" shall mean the Board of Directors of the Corporation.
c. "Code" shall mean the Internal Revenue Code of 1986, as amended.
d. "Committee" shall mean the committee, if any, appointed by the
Board in accordance with Section 4 of the Plan; provided,
however, that the Committee shall be reconstituted to include
only Non-Employee Directors if any Award is to be made to a
Director or Officer, except that the committee may consist of a
single Non-Employee Director in the event that an Award is to be
made to any other Non-Employee Director. No Non-Employee
Director will vote on an Award to himself or herself.
e. "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Corporation.
f. "Corporation" shall mean Exten Industries, Inc., a Delaware
corporation.
g. "Eligible Person" shall mean any of the following:
i. an individual who is employed (within the meaning of the
Code Section 3401 and the regulations thereunder) by the
Corporation;
ii. a service provider, consultant, customer or vendor to the
Corporation; and
iii. a non-employee director of the Corporation .
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h. "Event" shall mean any of the following:
i. Any person or entity (or group of affiliated persons or
entities) acquired in one or more transactions, whether
before or after the effective date of the Plan, ownership of
more than 50 percent of the outstanding shares of stock
entitled to vote in the election of directors of the
Corporation;
ii. The dissolution or liquidation of the Corporation or a
reorganization, merger or consolidation of the Corporation
with one or more entities, as a result of which the
Corporation is not the surviving entity, or a sale of all or
substantially all of the assets of the Corporation as an
entirety to another entity; or
iii. For purposes of this definition, ownership does not
include ownership (1) by a person owning such shares merely
of record (such as a member of a securities exchange, a
nominee or a securities depositary system), (2) by a person
as a bona fide pledgee of shares prior to a default and
determination to exercise powers as an owner of the shares,
(3) by a person who is not required to file statements on
Schedule 13D by virtue of Rule 13d-1(b) of the Securities
and Exchange Commission under the Exchange Act, or (4) by a
person who owns or holds shares as an underwriter acquired
in connection with an underwritten offering pending and for
purposes of resale.
i. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
j. "Fair Market Value" shall mean the value of one (1) Share of
Common Stock, determined as follows:
i. If the Shares are traded on an exchange, the price at which
Shares traded at the close of business on the date of
valuation;
ii. If the Shares are traded over-the-counter on the NASDAQ
System, the closing price if one is available, or the mean
between the bid and asked prices on said System at the close
of business on the date of valuation; and
iii. If neither (i) nor (ii) applies, the fair market value as
determined by the Board or the Committee in good faith.
Such determination shall be conclusive and binding on all
persons.
k. "Non-Employee Director" shall have the meaning ascribed to that
term in Rule 16b-3(b)(3). (17 C.F.R. 240.16b-3(b)(3).)
l. "Participant" shall mean an Eligible Person who has received an
Award under the Plan.
m. "Performance Award" shall have the meaning ascribed to such term
in Article 7.
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n. "Plan" shall mean the Exten Industries, Inc. 2000 Employee
Benefit Plan, as it may be amended from time to time.
o. "Share" shall mean one (1) share of Common Stock, adjusted in
accordance with Section 9(d) of the Plan (if applicable).
p. "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
q. "Stock Payment" shall mean a payment in the form of Shares made
in lieu of or in addition to all or any portion of the
compensation.
3. EFFECTIVE DATE
--------------
The Plan was adopted by the Board on February 15, 2000. The effective
date of the Plan shall be February 15, 2000. 35,000,000 Shares of common stock
have been reserved for issuance under the Plan.
4. ADMINISTRATION
--------------
a. The Plan shall be administered by the Board in compliance with
Rule 16b-3 of the Exchange Act ("Rule 16b-3"), or by the
Committee appointed by the Board, which Committee shall be
constituted to permit the Plan to comply with Rule 16b-3, and
which shall consist of not less than two (2) members who shall
act as managers of the Plan. The Plan is not subject to the
Employee Retirement Income Security Act of 1974 ("ERISA"). The
initial members of the Committee shall serve as the managers of
the Plan until removed by a majority vote of the Board.
b. The Board shall appoint one of the members of the Committee, if
there be one, as Chairman of the Committee.
c. If a Committee has been appointed, the Committee shall hold
meetings at such times and places as it may determine. Acts of a
majority of the Committee at which a quorum is present, or acts
reduced to or approved in writing by a majority of the members of
the Committee, shall be the valid acts of the Committee.
d. The Board, or the Committee if there be one, shall from time to
time at its discretion select the Eligible Persons who are to be
granted Awards and determine the number of Shares to be
applicable to such Award.
e. The interpretation and construction by the Board, or by the
Committee if there be one, of any provision of the Plan or of any
Award granted thereunder shall be final.
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f. No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to
the Plan or any Award granted thereunder.
g. In addition to any right of indemnification provided by the
Certificate of Incorporation or Bylaws of the Corporation, such
person shall be indemnified and held harmless by the Corporation
from any loss, cost, liability or expense that may be imposed
upon or reasonably incurred by him in connection with any claim,
suit, action or proceeding to which he may be a party by reason
of any action or omission under the Plan.
h. In the case of an award to an Eligible Person who is not an
employee of the Corporation, a majority of the Committee shall
determine that the value of the services to be rendered to the
Corporation by such non-employee director or service provider is
at least equal to the value of the Award granted.
i. Additional information regarding the Plan and its administrators,
and copies of the Corporation's Annual Report on Form 10-KSB for
the year ended November 30, 1999 and Quarterly Report on
Form 10-QSB for the period ended February 28, 2000, may be
obtained from the Corporation at 9620 Chesapeake Drive,
Suite 201, San Diego, California 92123, (858) 496-0174, without
change upon written or oral request. The Annual Report and
Quarterly Report are incorporated herein by reference.
5. PARTICIPATION AND WITHDRAWAL
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The Awards may be granted to such Eligible Persons as the Board or the
Committee may select. Eligible Persons may withdraw from participation in the
Plan at any time.
6. STOCK SUBJECT TO THE PLAN
-------------------------
a. The stock subject to Awards granted under the Plan shall be
Shares of the Corporation's authorized but unissued or reacquired
Common Stock. The aggregate number of Shares which may be issued
as Awards under the Plan shall not exceed 35,000,000 Shares.
b. Any Shares withheld by the Corporation pursuant to Section 10(c)
shall not be deemed to be issued. The number of withheld Shares
shall be deducted from the applicable Award and shall not entitle
the Participant to receive additional Shares.
c. The limitations established by this Article 6 shall be subject to
adjustment in the manner provided in Section 9(d) hereof upon the
occurrence of an event specified therein.
7. PERFORMANCE AWARDS
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One or more Performance Awards may be granted to any Eligible Person
providing services to or for the Corporation. The value of such Awards may be
linked to the market value, book value or other measure of the value of the
Common Stock or other specific performance criteria determined appropriate by
the Board or the Committee, in each case on a specified date or over any period
determined by the Board or the Committee, or may be based upon the appreciation
in the market value, book value or other measure of the value of a specified
number of shares of Common stock over a fixed period determined by the Board or
the Committee. In making such determinations, the Board or the Committee shall
consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other
compensation of the Award recipient.
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8. STOCK PAYMENTS
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The Board or the Committee may approve Stock Payments to Eligible Persons
who elect to receive such payments in the manner determined from time to time
by the Board or the Committee. The number of shares shall be determined by the
Board or the Committee and may be based upon the Fair Market Value, book value
or other measure of the value of such shares on the Award Date or on any date
thereafter.
9. RIGHTS OF ELIGIBLE PERSONS AND BENEFICIARIES
--------------------------------------------
a. EMPLOYEE STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Award will be made under the
Plan to an Eligible Employee or to Eligible Employees generally.
b. NO EMPLOYMENT CONTRACT. Nothing contained in the Plan (or in the
Award Agreements or in any other documents related to the Plan or
to Awards) shall confer upon any Eligible Person any right to
join or continue in the employ of the Corporation or constitute
any contract or agreement of employment, or interfere in any way
with the right of the Corporation to reduce such person's
compensation or to terminate the employment or other contract or
arrangement of such Eligible Person, with or without cause, but
nothing contained in the plan or any document related thereto
shall affect any other contractual right of any Participant.
Nothing contained in the Plan (or in the Award Agreements or in
any other documents related to the Plan or the Awards) shall
confer upon any director of the Corporation any right to continue
as a director of the Corporation.
c. PLAN NOT FUNDED. No Eligible Person or other person shall have
any right, title or interest in any fund or in any specific asset
(including shares of Common Stock) of the Corporation by reason
of any Award granted hereunder. There shall be no funding of any
benefits which may become payable hereunder. Neither the
provisions of the Plan (or of any documents related hereto), nor
the creation or adoption of the Plan, nor any action taken
pursuant to the provisions of the Plan shall create, or be
construed to create, a trust of any kind or a fiduciary
relationship between the Corporation and any Eligible Person. To
the extent that an Eligible Person acquires a right to receive an
Award hereunder, such recipient shall have no greater rights than
the right of any unsecured general creditor of the Corporation.
Awards payable under the Plan shall be paid in shares of Common
Stock and no special or separate fund or deposit shall be
established and no segregation of shares shall be made to assure
payment of such Awards. The Plan is not qualified under
Section 401(a) of the Code.
d. ADJUSTMENT UPON RECAPITALIZATIONS AND CORPORATE CHANGES. If the
outstanding shares of Common Stock are changed into or exchanged
for cash or a different number or kind of shares or securities of
the Corporation, or if the outstanding shares of the Common Stock
are increased, decreased, exchanged for, or otherwise changed, or
if additional shares or new or different shares or securities are
distributed with respect to the outstanding shares of the Common
Stock, through a reorganization or merger in which the
Corporation is the surviving entity or through a combination,
consolidation, recapitalization, reclassification, stock split,
stock dividend, reverse stock split, stock consolidation or other
capital change or adjustment, an appropriate adjustment shall be
made in the number and kind of shares of other consideration that
is subject to or may be delivered under the Plan and pursuant to
outstanding Awards that have been announced but not yet delivered
to the recipient Eligible Person pursuant to section 9(f).
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e. RIGHTS AS A STOCKHOLDER. A Eligible Person, or a transferee of a
Eligible Person, shall have no rights as a stockholder with
respect to any Shares covered by his or her Award until the date
of the issuance of a stock certificate for such Shares. No
adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior
to the date such stock certificate is issued, except as provided
in Section 9(d) hereof.
f. DEFERRAL OF PAYMENTS. The Board or the Committee may approve the
deferral of any payments that may become due under the Plan.
Such deferrals shall be subject to any conditions, restrictions
or requirements as the Board or the Committee may determine.
g. ACCELERATION OF AWARDS. Immediately prior to the occurrence of
an Event, each Award outstanding under the Plan shall be fully
vested or exercisable, unless, prior to the Event, the Board or
the Committee otherwise determines that there shall be no such
acceleration or vesting of an Award or otherwise determines those
Awards which shall be accelerated or vested and to the extent to
which they shall be accelerated or vested, or that an Award shall
terminate, or unless in connection with such Event the Board
provides (i) for the assumption of such Awards theretofore
granted, or (ii) for the substitution for such Awards of new
awards covering securities or obligations (or any combination
thereof) of a successor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to number and kind of
shares and prices, or (iii) for the payment of the Fair Market
Value of the then outstanding Awards. In addition, the Board or
the Committee may grant such additional rights in the foregoing
circumstances as the Board or the Committee deems to be in the
best interest of the recipient and the Corporation in order to
preserve for the recipient the benefits of an Award. For
purposes of this Section 9(g) only, Board shall mean the Board of
Directors of the Corporation as constituted immediately prior to
the Event. In addition, the Board may in its sole discretion
accelerate vesting of any or all Awards outstanding under the
Plan in circumstances under which the Board or the Committee
determines such acceleration appropriate.
10. MISCELLANEOUS
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a. TERMINATION, SUSPENSION, ASSIGNMENT AND AMENDMENT. The Board
may, at any time, suspend, amend, modify or terminate the Plan
(or any part thereof) and may, with the consent of an Award
recipient, authorize such modifications of the terms and
conditions of such recipient's Award as it shall deem advisable.
Awards under the Plan are not assignable other than to (i) a
revocable trust for benefit of the recipient or (ii) an immediate
family member (as defined in Rule 16a-1). The Award is not an
Incentive Stock Option.
i. No Awards under the Plan may be granted or amended during
any suspension of the Plan or after its termination. The
amendment, suspension or termination of the Plan shall not,
without the consent of the Award recipient, alter or impair
any rights or obligations pertaining to any Awards granted
under the Plan prior to such amendment, suspension or
termination.
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ii. Neither adoption of the Plan nor the provisions hereof shall
limit the authority of the Board to adopt other plans or to
authorize other payments of compensation and benefits under
applicable law.
b. NO FRACTIONAL SHARES. No Award or installment thereof shall be
exercisable except in respect of whole shares, and fractional
share interests shall be disregarded.
c. TAX WITHHOLDING AND TAX BONUSES.
i. Federal, state or local taxes that are subject to the
withholding of tax at the source shall be withheld by the
Corporation so required by applicable law, but shall not
constitute a lien.
ii. The Corporation is entitled to require deduction from other
compensation, if any, payable to each Eligible Person or, in
the alternative:
(1) The Corporation may require the Participant to advance
such sums; or
(2) If a Participant elects, the Corporation may withhold
(or require the return of) Shares having the Fair
Market Value equal to the sums required to be withheld.
The Shares withheld will be sold by the Company for the
account of the Participant, and the proceeds of such
sale will be used to satisfy the withholding
requirement. If the Participant elects to advance such
sums directly, written notice of that election shall be
delivered prior to the Award and whether pursuant to
such election or pursuant to a requirement imposed by
the Corporation, payment in cash or by check of such
sums for taxes shall be delivered within 10 days after
the Award date.
iii. If the Participant elects to have the Corporation withhold
Shares (or be entitled to the return of Shares) having a
Fair Market Value equal to the sums required to be withheld,
the value of the Shares to be withheld (or returned) will be
equal to the Fair Market Value on the date the amount of tax
to be withheld (or subject to return) is to be determined.
Elections by Eligible Persons to have Shares withheld (or
subject to return) for this purpose will be subject to the
following restrictions:
(1) the election must be made prior to the Tax Date;
(2) the election must be irrevocable;
(3) the election will be subject to the Board's
disapproval; and
(4) if the Participant is an "officer" within the meaning
of Section 16 of the Exchange Act, the election shall
be subject to such additional restrictions as the Board
or the Committee may impose in an effort to secure the
benefits of any regulations thereunder.
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iv. The Corporation shall not be obligated to issue shares to
the Participant upon any Award exercise until such payment
has been received or Shares have been withheld, unless
withholding (or offset against a cash payment) as of or
prior to the exercise date is sufficient to cover all such
sums due or which may be due with respect to such exercise.
d. COMPLIANCE WITH LAWS.
i. The granting of Awards under the Plan is subject to such
additional requirements as the Board or the Committee may
impose to assure or facilitate compliance with all
applicable federal and state laws, rules and regulations
(including, without limitation, securities laws and margin
requirements) and to such approvals by any regulatory or
governmental agency which may be necessary or advisable in
connection therewith.
ii. In connection with the administration of the Plan or the
grant of any Award, the Board or the Committee may impose
such further limitations or conditions as in its opinion may
be required or advisable to satisfy, or secure the benefits
of, applicable regulatory requirements (including those
rules that facilitate exemption from or compliance with the
Securities Act or the Exchange Act), the requirements of any
stock exchange upon which such shares or shares of the same
class are then listed, and any blue sky or other securities
laws applicable to such shares.
e. GOVERNING LAWS. The Plan and all Awards granted under the Plan
and the documents evidencing Awards shall be governed by, and
construed in accordance with, the laws of the State of
California, except as to those matters governed by the laws of
the State of Delaware as the state of incorporation of the
Corporation.
f. SECURITIES LAW REQUIREMENTS.
i. LEGALITY OF ISSUANCE. The issuance of any Shares upon the
granting of any Award shall be contingent upon the
following:
(1) the Corporation and the Participant shall have taken
all action required to register the Shares under the
Securities Act of 1933, as amended (the "Act"), and to
qualify the Shares under any and all applicable state
securities or "blue sky" laws or regulations, or to
perfect an exemption from the respective registration
and qualification requirements thereof;
(2) any applicable listing requirement of any stock
exchange on which the Common Stock is listed shall have
been satisfied; and
(3) any other applicable provision of state or federal
law shall have been satisfied.
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ii. RESTRICTIONS ON TRANSFER. Regardless of whether the
offering and sale of Shares under the Plan has been
registered under the Securities Act or has been registered
or qualified under the securities laws of any state, the
Corporation may impose restrictions on the sale, pledge or
other transfer of such Shares (including the placement of
appropriate legends on stock certificates) if, in the
judgment of the Corporation and its counsel, such
restrictions are necessary or desirable in order to achieve
compliance with the provisions of the Securities Act, the
securities laws of any state or any other law, or as a
condition of making the Award. In the event that the sale
of Shares under the Plan is not registered under the
Securities Act but an exemption is available which required
and investment representation or other representation, each
Participant shall be required to represent that such Shares
are being acquired for investment, and not with a view to
the sale or distribution thereof, and to make such other
representations as are deemed necessary or appropriate by
the Corporation and its counsel. Any determination by the
Corporation and its counsel connection with any of the
matters set forth in this Section 10(f)(ii) shall be
conclusive and binding on all persons. Stock certificates
evidencing Shares acquired under the Plan pursuant to an
unregistered transaction shall bear the following
restrictive legend and such other restrictive legends as are
required or deemed advisable under the provisions of any
applicable law.
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE
ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY
WITH THE SECURITIES ACT."
iii. REGISTRATION OR QUALIFICATION OF SECURITIES. The
Corporation may, but shall not be obligated to register or
qualify the issuance of Awards and/or the sale of Shares
under the Securities Act or any other applicable law. The
Corporation shall not be obligated to take any affirmative
action in order to cause the issuance of Awards or the sale
of Shares under the plan to comply with any law.
iv. EXCHANGE OF CERTIFICATES. If, in the opinion of the
Corporation and its counsel, any legend placed on a stock
certificate representing shares issued under the Plan is no
longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate
representing the same number of Shares but lacking such
legend.
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g. EXECUTION. To record the adoption of the Plan in the form set
forth above by the Board effective as of February 15, 2000, the
Corporation has caused this Plan to be executed in the name and
on behalf of the Corporation where provided below by an officer
of the Corporation thereunto duly authorized.
EXTEN INDUSTRIES, INC.
By: /s/ Jerry G. Simek
-------------------------
Jerry G. Simek, President
ATTEST:
/s/ W. Gerald Newmin
---------------------------------
W. Gerald Newmin, Chief Executive
Officer and Secretary
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