EXHIBIT 99.02
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NANOPIERCE TECHNOLOGIES, INC.
2000 COMPENSATORY STOCK OPTION PLAN
Adopted as of October 31, 2000
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NANOPIERCE TECHNOLOGIES, INC.
2000 COMPENSATORY STOCK OPTION PLAN
Nanopierce Technologies, Inc., a Nevada corporation (the "Company"), has
adopted this 2000 Compensatory Stock Option Plan (the "Plan"), effective as of
October 31, 2000, for the benefit of its eligible Employees.
The purposes of this Plan are as follows:
(a) to provide increased incentive for key Employees and other persons
associated with the Company to further the growth, development and
financial success of the Company by personally benefiting through the
ownership of Company stock rights which recognize such growth, development
and financial success; and
(b) to enable the Company to obtain and retain the services of key
Employees and other persons associated with the Company considered
essential to the long-range success of the Company by offering them an
opportunity to own stock in the Company and/or rights which will reflect
the growth, development and financial success of the Company.
ARTICLE I
DEFINITIONS
Section 1.01. General. Wherever the following terms are used in this Plan
they shall have the meaning specified below, unless the context clearly
indicates otherwise.
"Articles of Incorporation" shall mean the Company's Articles of
Incorporation on file with the Nevada Secretary of State.
"Beneficiary" shall mean the person or persons properly designated by the
Optionee, including his spouse or heirs at law, to exercise such Optionee's
rights under this Plan in the event of the Optionee's death, or if the Optionee
has not designated such person or persons, or such person or persons shall have
pre-deceased the Optionee, the executor or administrator of the Optionee's
estate. Designation, revocation and redesignation of Beneficiaries must be made
in writing in accordance with the rules established by the Committee and shall
be effective upon delivery to the Committee.
"Board" shall mean the Board of Directors of the Company.
"Bylaws" shall mean the Bylaws of the Company, as amended from time to
time.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a compensation committee of the Board, appointed as
provided in Section 2.01.
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"Common Stock" shall mean the common stock of the Company, par value
$0.0001 per share.
"Company" shall mean Nanopierce Technologies, Inc., a Nevada corporation,
or any parent or subsidiary of Nanopierce Technologies, Inc. as described in
Section 424(e) or Section 424(f) of the Code.
"Director" shall mean a member of the Board.
"Employee" shall mean any officer, director, or other employee (as defined
in accordance with Section 3401(c) of the Code) of the Company and, to the
extent permitted by applicable law, any persons associated with the Company.
"Expiration Date" shall mean the last day of the term of the Option as
established in Section 5.03.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" of a share of Common Stock as of a given date shall be
the average of the daily market price for the 10 consecutive trading days
immediately preceding the valuation date. The market price for each such trading
day shall be: (a) if the shares of Common Stock are listed or admitted to
trading on any securities exchange or the NASDAQ-National Market System, the
closing price, regular way, on such day, or if no such sale takes place on such
day, the average of the closing bid and asked prices on such day, (b) if the
shares of Common Stock are not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System, the last reported sale price on
such day or, if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reliable quotation source
designated by the Company, or (c) if the shares of Common Stock are not listed
or admitted to trading on any securities exchange or the NASDAQ-National Market
System and no such last reported sale price or closing bid and asked prices are
available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the Company, or if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 10
days prior to the date in question) for which prices have been so reported;
provided (d) that if there are no bid and asked prices reported during the 10
days prior to the date in question, the Fair Market Value of the shares of
Common Stock shall be determined by the Committee acting in good faith on the
basis of such quotations and other information as it considers, in its absolute
discretion appropriate
"Incentive Stock Option" shall mean an option which conforms to the
applicable provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.
"Non-Qualified Stock Option" shall mean an Option which is intended to be
an Option, but does not qualify as an Incentive Stock Option or which is not
designated as such by the Committee.
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"Option" shall mean a stock option granted pursuant to this Plan. An option
granted under this Plan shall be either a Non-Qualified Stock Option or an
Incentive Stock Option.
"Option Agreement" shall mean the agreement between the Company and the
Optionee pursuant to which Options are issued.
"Optionee" shall mean an Employee or person associated with the Company and
who is granted an Option under this Plan.
"Plan" shall mean this Nanopierce Technologies, Inc., 2000 Compensatory
Stock Option Plan.
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
"Stock Option Agreement" has the meaning specified in Section 5.01.
"Tax Date" has the meaning specified in Section 7.06.
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company is terminated for any reason,
including, but not by way of limitation, a termination by resignation,
discharge, death, permanent and total disability or retirement; but excluding
(a) terminations where there is a simultaneous reemployment or continuing
employment of an Optionee by the Company and (b) at the discretion of the
Committee, terminations which result in a temporary severance of the
employee-employer relationship that do not exceed one year. The Committee, in
its absolute discretion, shall determine the effect of all other matters and
questions relating to Termination of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment resulted from a
discharge for good cause, and all questions of whether particular leaves of
absence constitute Terminations of Employment, provided, however, that, with
respect to Incentive Stock Options, a leave of absence shall constitute a
Termination of Employment if, and to the extent that, such leave of absence
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, the Company has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided in writing.
Section 1.02. Gender and Number. Wherever the masculine gender is used it
shall include the feminine and neuter, and wherever a singular pronoun is used
it shall include the plural, unless the context clearly indicates otherwise.
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ARTICLE II
ADMINISTRATION
Section 2.01. Compensation Committee. This Plan shall be administered by
the Committee, unless the Board otherwise determines that it shall administer
this Plan. If the Board otherwise so determines, all references herein to the
Committee shall then be deemed to refer to the Board. The Committee shall
consist of two or more Directors who are "outside directors" as defined under
Section 162(m) of the Code and the regulations promulgated thereunder, appointed
by and holding office at the pleasure of the Board, each of whom is not then an
officer of the Company and each of whom is a "disinterested person" as defined
by Rule 16b-3. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be filled
by the Board.
Section 2.02. Duties and Powers of the Committee. It shall be the duty of
the Committee to conduct the general administration of this Plan in accordance
with its provisions. The Committee shall have the power to interpret this Plan
and the Options, and the agreements pursuant to which the Options are granted or
awarded, and to adopt such rules for the administration, interpretation and
application of this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such grant or award under this Plan need not be the
same with respect to each Optionee. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code. In its absolute discretion, the Board may at any time
and from time to time exercise any and all rights and duties of the Committee
under this Plan except with respect to matters which under Rule 16b-3 are
required to be determined in the sole discretion of the Committee.
Section 2.03. Majority Rule. The Committee shall act by a majority of its
members in attendance at a meeting, or to the extent permitted by law and the
Bylaws, by telephonic meeting, at which a quorum is present or by a memorandum
or other written instrument signed by all members of the Committee.
Section 2.04. Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may
employ, with the approval of the Board, attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Options, Optionees, the Company and all other
interested persons. No members of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Plan or any Option,
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and all members of the Committee shall be fully protected by the Company in
respect of any such action, determination or interpretation.
Section 2.05. No Liability. No member of the Board or the Committee, or
Director, officer or employee of the Company shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such person so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.
Section 2.06. Indemnification. To the fullest extent permitted by law, each
of the members of the Board and the Committee and each of the Directors,
officers and employees of the Company shall be held harmless and be indemnified
by the Company for any liability, loss (including amounts paid in settlement),
damages or expenses (including reasonable attorneys' fees) suffered by virtue of
any determinations, acts or failures to act, or alleged acts or failures to act,
in connection with the administration of this Plan so long as such person is not
determined by a final adjudication to be guilty of willful misconduct with
respect to such determination, action or failure to act.
ARTICLE III
SHARES SUBJECT TO PLAN
Section 3.01. Shares Subject to Plan. The shares subject to Options shall
be shares of the Company's Common Stock, and the aggregate number of such shares
which may issued upon exercise of such options shall not exceed 5,000,000
shares. The shares of Common Stock issuable upon exercise or grant of an Option
may be either previously authorized but unissued shares or issued shares which
have been repurchased by the Company. In addition, any shares of Common Stock
subject to Option, which for any reason is terminated, unexercised or expires
shall again be available for issuance under the Plan.
ARTICLE IV
GRANTING OF OPTIONS
Section 4.01. Eligibility. Any Employee or person associated with the
Company and selected by the Committee pursuant to Section 4.04(a)(i) shall be
eligible to be granted an Option.
Section 4.02. Disqualification for Stock Ownership. No person may be
granted an Incentive Stock Option under this Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company unless
such Incentive Stock Option conforms to the applicable provisions of Section 422
of the Code. In particular, the term of such Incentive Stock Options shall not
exceed five years and shall satisfy the requirements of Section 5.04(c)
regarding sequential exercise.
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Section 4.03. Qualification of Incentive Stock Options. No Incentive Stock
Option shall be granted unless such Option, when granted, qualifies as an
"incentive stock option" under Section 422 of the Code.
Section 4.04. Granting of Options.
(a) The Committee shall from time to time, in its absolute discretion:
(i) determine which Employees or persons associated with the
Company are key Employees and select from among the key Employees or
such persons (including Employees or persons to whom Options have
previously been granted) such of them as in its opinion should be
granted Options;
(ii) determine the number of shares to be subject to such Options
granted to the selected key Employees or such persons;
(iii) determine whether such Options are to be Incentive Stock
Options or Non-Qualified Stock Options; and
(iv) determine the terms and conditions of such Options,
consistent with this Plan.
(b) Upon the selection of a key Employee or persons associated with
the Company to be granted an Option, the Committee shall instruct the
Secretary of the Company to issue the Option and may impose such conditions
on the grant of the Option as it deems appropriate. Without limiting the
generality of the preceding sentence, the Committee may, in its discretion
and on such terms as it deems appropriate, require as a condition on the
grant of an Option to an Employee that the Employee surrender for
cancellation some or all of the unexercised Options which have been
previously granted to him under this Plan. An Option, the grant of which is
conditioned upon such surrender, may have an option price lower (or higher)
than the exercise price of such surrendered Option, may cover the same (or
a lesser or greater) number of shares as such surrendered right, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered right
(c) Any Incentive Stock Option granted under this Plan may be modified
by the Committee to disqualify such option from treatment as an "incentive
stock option" under Section 422 of the Code. Any Option granted hereunder
that fails to meet the requirements of an Incentive Stock Option shall be
considered a Non-Qualified Stock Option.
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ARTICLE V
TERMS OF OPTIONS
Section 5.01. Option Agreement. Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan. Stock
Option Agreements evidencing Incentive Stock Options shall contain such terms
and conditions as may be necessary to meet the applicable provisions of Section
422 of the Code.
Section 5.02. Option Price. The price per share of the shares subject to
each Option shall be set by the Committee; provided, however, that such price
shall be no less than the par value of a share of Common Stock and in the case
of Incentive Stock Options such price shall not be less than 100% of the Fair
Market Value of a share of Common Stock as of the date the Option is granted;
provided further, that in the case of Incentive Stock Options such price shall
be no less than 110% of the Fair Market Value of a share of Common Stock as of
the date the Option is granted if such Option is granted to a person who owns
10% or more of the total combined voting power of all classes of stock of the
Company.
Section 5.03. Option Term. The term of an Option shall be set by the
Committee in its discretion; provided, however, that no such term shall exceed a
reasonable time period, and provided further that, in the case of Incentive
Stock Options, the term shall not be more than 10 years from the date the
Incentive Stock Option is granted. The last day of the term of the Option shall
be the Option's Expiration Date.
Section 5.04. Option Vesting.
(a) The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee, and the
Committee may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted; provided, however, that no
Option shall be exercisable by any Optionee who is then subject to Section
16 of the Exchange Act within the period ending six months after the date
the Option is granted. At any time after grant of an Option, the Committee
may, in its sole discretion and subject to whatever terms and conditions it
selects, accelerate the period during which an Option vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable; provided, however, that
provision may be made that such Option shall become exercisable, with the
consent of the Committee, in the event of a Termination of Employment
because of the Optionee's normal retirement or permanent and total
disability (each as determined by the Committee in accordance with Company
policies), death or early retirement.
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(c) To the extent that the aggregate Fair Market Value of stock with
respect to which Incentive Stock Options (determined without regard to
Section 422(d) of the Code) are exercisable for the first time by an
Optionee during any calendar year (under the Plan and all other incentive
stock option plans of the Company or any Company Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the
extent required by Section 422 of the Code. The rule set forth in the
preceding sentence shall be applied by taking Options into account in the
order in which they were granted. For purposes of this Section 5.04(c), the
Fair Market Value of stock shall be determined as of the time the Option,
with respect to such stock, is granted.
Section 5.05. Exercise of Option After Termination of Employment. For those
Participants who are Employees, an Option is exercisable by an Optionee only
while he is an Employee. The preceding notwithstanding, an Option may be
exercised subsequent to an Optionee's Termination of Employment, subject to the
following limitations:
(a) If the Optionee dies while an Option is exercisable under the
terms of this Plan, the Optionee's Beneficiary may exercise such rights, to
the extent the Optionee could have done so immediately preceding his death.
Any such Option must be exercised within 12 months after the Optionee's
death, and the Committee may in its discretion extend the Expiration Date
of such Option to accommodate such exercise; provided, however, that the
term of an Incentive Stock Option may not be extended beyond 10 years from
the date of grant.
(b) If the Optionee's employment is terminated due to his permanent
and total disability, as defined in Section 22(e)(3) of the Code, the
Optionee may exercise his Option, to the extent exercisable as of his
Termination of Employment, within 12 months after termination, but no later
than the Option's Expiration Date.
(c) Except as provided in Section 5.05(d), if the Optionee's
employment is terminated for any reason other than those set forth in
subsection (a) or (b) above, the Optionee may exercise his Option, to the
extent exercisable as of his Termination of Employment, within three months
after Termination of Employment, but not later than the Option's Expiration
Date.
(d) If the Optionee's employment is terminated for good cause, as
determined by the Company, in its sole discretion, Options granted under
the Plan shall expire on the date of the Termination of Employment.
ARTICLE VI
EXERCISE OF OPTIONS
Section 6.01. Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
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Section 6.02. Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon:
(a) Delivery of all of the following to the Secretary of the Company
or his office:
(i) a written notice complying with the applicable rules
established by the Committee or the Company stating that the Option,
or a portion thereof, is exercised. The notice shall be signed by the
Optionee or other person then entitled to exercise the Option or such
portion;
(ii) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance
with all applicable provisions of the Securities Act of 1933, as
amended, and any other federal or state securities laws or
regulations. The Committee may, in its absolute discretion, also take
whatever additional actions it deems appropriate to effect such
compliance, including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and
registrars; and
(iii) in the event that the Option shall be exercised pursuant to
Section 5.05(a) by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise
the Option; and
(b) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised.
However, at the discretion of the Committee, the terms of the Option may
(i) allow a delay in payment up to 30 days from the date the Option, or
portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock owned by the Optionee; (iii)
allow payment, in whole or in part, through the surrender of shares of
Common Stock then issuable upon exercise of the Option; or (iv) allow
payment, in whole or in part, through the delivery of property of any kind
which constitutes good and valuable consideration.
Section 6.03. Issuance of Shares. As soon as practicable after receipt by
the Company, pursuant to Section 6.02(b), of full cash payment for the shares
with respect to which an Option, or portion thereof, is exercised by an
Optionee, with respect to each such exercise, the Company shall transfer to the
Optionee the number of shares equal to the quotient of:
(a) the amount of the payment made by the Optionee to the Company
pursuant to Section 6.02(b); and
(b) the price per share of the shares subject to the Option as
determined pursuant to Section 5.02.
Section 6.04. Conditions to Issuance of Stock Certificates. The Company
shall not be required to issue or to deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
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(a) the admission of such shares to listing on all stock exchanges on
which such class of stock is then listed, if any;
(b) the completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee shall, in its absolute discretion, deem
necessary or advisable;
(c) obtaining any approval or other clearance from any state or
federal governmental agency which the Committee shall determine, in its
absolute discretion, to be necessary or advisable;
(d) the lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons
of administrative convenience; and
(e) the receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
Section 6.05. Rights as Stockholders. The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
Section 6.06. Transfer Restrictions. The Committee, in its absolute
discretion, may impose such additional restrictions on the transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares. The Committee
will require the Employee to give the Company prompt notice of any disposition
of shares of Common Stock acquired by exercise of an Incentive Stock Option
within (a) two years from the date of granting such Option to such Employee or
(b) one year after the transfer of such shares to such Employee. The Committee
may direct that the certificates evidencing shares acquired by exercise of an
Option refer to such requirement to give prompt notice of disposition.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Not Transferable. Options under this Plan may not be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution; provided, however, that an Optionee may designate a
Beneficiary to exercise his Option or other rights under this Plan after his
death. No Option or interest or right therein shall be liable for the debts,
contracts or engagements of the Optionee, or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect;
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provided, however, that nothing in this Section 7.01 shall prevent transfers by
will or by the applicable laws of descent and distribution. An Option shall be
exercised during the Optionee's lifetime only by the Optionee or his guardian or
legal representative.
Section 7.02. Amendment, Suspension or Termination of this Plan. This Plan
may be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board. However, without
approval of the Company's stockholders given within twelve months before or
after the action by the Board or the Committee, no action of the Committee or
Board, except as provided in Section 7.03, may increase the limits imposed in
Section 3.01 on the maximum number of shares which may be issued under this
Plan, and no action of the Committee or Board may be taken that would otherwise
require stockholder approval as a matter of applicable law, regulation or rule.
No amendment, suspension or termination of this Plan, without the consent of the
holder of an Option, shall alter or impair any rights or obligations under any
Option theretofore granted or awarded. No Option may be granted or awarded
during any period of suspension nor after termination of this Plan, and in no
event may any Incentive Stock Option be granted under this Plan after the first
to occur of the following events:
(a) the expiration of ten years from the date the Plan is adopted by
the Board; or
(b) the expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 7.05.
Section 7.03. Changes in Common Stock or Assets of the Company. In the
event that the outstanding shares of Common Stock are hereafter changed into or
exchanged for cash or a different number or kind of shares or other securities
of the Company, or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock splitup, stock dividend
or combination of shares, appropriate adjustments shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted, including adjustments of the limitation in Section 3.01 on the maximum
number and kind of shares which may be issued.
In the event of such a change or exchange, other than for shares or
securities of another corporation or by reason of reorganization, the Committee
shall also make an appropriate and equitable adjustment in the number and kind
of shares as to which all outstanding Options or Performance Awards, or portions
thereof then unexercised, shall be exercisable. Such adjustment shall be made
with the intent that after the change or exchange of shares, each Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in an outstanding Option may include a necessary or
appropriate corresponding adjustment in the Option exercise price, but shall be
made without change in the total price applicable to the Option, or the
unexercised portion thereof (except for any change in the aggregate price
resulting from rounding off of share quantities or prices).
Where an adjustment of the type described above is made to an Incentive
Stock Option under this Section, the adjustment will be made in a manner which
will not be considered a "modification" under the provisions of subsection
424(h)(3) of the Code.
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In the event of a "spin-off" or other substantial distribution of assets of
the Company which has a material diminutive effect upon the Fair Market Value of
the Company's Common Stock, the Committee may in its discretion make an
appropriate and equitable adjustment to the Option exercise price to reflect
such diminution.
Section 7.04. Merger of the Company. In the event of the merger or
consolidation of the Company with or into another corporation, the exchange of
all or substantially all of the assets of the Company for the securities of
another corporation, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company:
(a) Pursuant to the terms of the Option, all granted or awarded
Options will immediately vest in the Optionee, and for a specified period
of time prior to such event, such Option shall be exercisable as to all
shares covered thereby, notwithstanding anything to the contrary in (i)
Section 5.04 or (ii) the provisions of such Option.
Section 7.05. Approval of Plan by Stockholders. This Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. Options may be granted prior
to such stockholder approval; provided that such Options shall not be
exercisable prior to the time when this Plan is approved by the stockholders;
and provided further that if such approval has not been obtained at the end of
said twelve-month period, all Options previously granted under this Plan shall
thereupon be considered Non-Qualified Stock Options. The Company shall take such
actions with respect to the Plan as may be necessary to satisfy the requirements
of Rule 16b-3.
Section 7.06. Tax Withholding. The Company shall be entitled to require
payment or deduction from other compensation payable to each Optionee of any
sums required by federal, state or local tax law to be withheld with respect to
any Option. The Committee may in its discretion allow such Optionee to elect to
have the Company withhold shares of Common Stock (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld. If the Optionee elects to advance such sums directly, written notice
of that election shall be delivered on or prior to such exercise and, whether
pursuant to such election or pursuant to a requirement imposed by the Company
payment in cash or by check of such sums for taxes shall be delivered within two
days after the date of exercise. If, as allowed by the Committee, the Optionee
elects to have the Company withhold shares of Common Stock (or allow the return
of shares of Common Stock) having a Fair Market Value equal to the sums required
to be withheld, the value of the shares of Common Stock to be withheld (or
returned as the case may be) will be equal to the Fair Market Value of such
shares as of the date that the amount of tax to be withheld is to be determined
(the "Tax Date"). Elections by such persons to have shares of Common Stock
withheld for this purpose will be subject to the following restrictions: (a) the
election must be made on or prior to the Tax Date, (b) the election must be
irrevocable, (c) the election shall be subject to the disapproval of the
Committee, and (d) if the person is an officer of the Company within the meaning
of Section 16 of the Exchange Act, the election shall be subject to such
additional restrictions as the Committee may impose in an effort to secure the
benefits of any regulations thereunder. The Committee shall not be obligated to
issue shares and/or distribute cash to any person upon exercise of any right
until such payment has been received or shares have been so withheld, unless
withholding (or offset against a cash
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payment) as of or prior to the date of such exercise is sufficient to cover all
such sums due or which may be due with respect to such exercise.
Section 7.07. Limitations Applicable to Section 16 Persons.
(a) Notwithstanding any other provision of this Plan, any Option
granted to a key Employee who is then subject to Section 16 of the Exchange
Act is subject to the following additional limitations:
(i) the Option agreement may provide for the issuance of shares
of Common Stock as a stock bonus for no consideration other than
services rendered; and
(ii) in the event of an Option under which shares of Common Stock
are or in the future may be issued for any type of consideration other
than services rendered, the amount of such consideration shall be
equal to the minimum amount (such as the par value of such shares)
required to be received by the Company to comply with applicable state
law.
(b) Notwithstanding any other provision of this Plan, this Plan, and
any Option to a key Employee who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in
any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. Any such
additional limitation shall be set forth in an annex to this Plan, such
annex to be incorporated herein by this reference and made part of this
Plan.
(c) With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan, other than the issuance of Non-Qualified
Stock Options, are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the Exchange Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event the Plan does not
include a provision required by Rule 16b-3 to be stated therein, such
provision (other than one relating to eligibility requirements, or the
price and amount of awards) shall be deemed automatically to be
incorporated by reference into the Plan insofar as participants subject to
Section 16 are concerned.
Section 7.08. Plan Designation and Status. Notwithstanding the designation
of this document as a Plan for convenience of reference and to standardize
certain provisions applicable to all types of Options, each Option shall be
deemed to be a separate "plan" for purposes of Section 16 of the Exchange Act
and any applicable state securities laws.
Section 7.09. Release of Restrictions. Any or all of the foregoing
limitations in Sections 7.07 and 7.08 on Options granted to key Employees shall
be suspended if, to the extent, as to such persons, and for so long as the
Securities and Exchange Commission by regulation or official staff
interpretation or a no-action letter issued to the Company determines that such
limitation is not necessary to secure the benefits otherwise available with
respect to a "plan" or
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particular award, as the case may be, under any applicable exemptive rule under
Section 16 of the Exchange Act.
Section 7.10. Effect of Plan Upon Options and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Company Subsidiary. Nothing in this Plan shall
be construed to limit the right of the Company (a) to establish any other forms
of incentives or compensation for employees of the Company or any Company
Subsidiary or (b) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate or partnership purpose
including but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership,
firm or association or the performance of services for the benefit of the
Company.
Section 7.11. Compliance with Laws. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options granted hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan, or Options awarded hereunder, shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
Section 7.12. Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this Plan.
Section 7.13. Governing Law. This Plan and any agreements hereunder shall
be administered, interpreted and enforced under the internal laws of the State
of Nevada without regard to conflicts of laws thereof.
Section 7.14. Continued Employment. Nothing in the Plan or in any Option
Agreement shall confer upon any Participant the right to continue in the
employment of the Company or affect any right which the Company may have to
terminate the employment of such participant.
Section 7.15. Severability. If any portion of this Plan is declared by a
court of competent jurisdiction to be invalid or unenforceable after all appeals
have either been exhausted or the time for any appeals to be taken has expired,
the remainder of the terms, provisions, covenants and restrictions of this Plan
shall remain in full force and effect and in no way be affected, impaired or
invalidated.
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CERTIFICATION
The undersigned, being the duly appointed and acting Secretary of the
Company, hereby certifies that the foregoing 2000 Compensatory Stock Option Plan
was adopted by the Company's Board of Directors on October 31, 2000, and
approved by the Company's shareholders on ____________, 2000.
NANOPIERCE TECHNOLOGIES, INC.
By_______________________________________
Kristi J. Kampmann, Secretary
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