AMERICAN NORTEL COMMUNICATIONS, INC.
STOCK OPTION PLAN
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TABLE OF CONTENTS
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Section 1 PURPOSE 1
Section 2. DEFINITIONS 1
Section 3. SHARES SUBJECT TO OPTIONS 3
Section 4. EFFECTIVE DATE 3
Section 5. COMMITTEE 3
Section 6. ELIGIBILITY 4
Section 7. GRANT OF OPTIONS 4
Section 8. OPTION PRICE 4
Section 9. EXERCISE PERIOD 5
Section 10. TRANSFERABILLTY 5
Section 11. SECURITIES REGISTRATION AND RESTRICTIONS 6
Section 12. LIFE OF PLAN 7
Section 13. ADJUSTMENT 7
Section 14. SALE OR MERGER OF THE COMPANY 8
Section 15. AMENDMENT OR TERMINATION 8
Section 16. MISCELLANEOUS 9
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AMERICAN NORTEL COMMUNICATIONS, INC.
STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of this Plan is to promote the interests of American Nortel
Communications, Inc. (the "Company") by granting Options to purchase Stock to
Key Employees and Outside Directors in order to (a) attract and retain Key
Employees and Outside Directors; (b) provide an additional incentive to each Key
Employee and Key Consultant to work to increase the value of the Stock; and (c)
provide each such Key Employee and Outside Director with a stake in the future
of the Company which corresponds to the stake of each of the Company's
stockholders.
SECTION 2. DEFINITIONS
Each term set forth in this Section 2 shall have the meaning set forth
opposite such term for purposes of this Plan and for any Option granted under
this Plan. For purposes of such definitions, the singular shall include the
plural and the plural shall include the singular. Unless otherwise expressly
indicated, all Section references herein shall be construed to mean references
to a particular Section of this Plan.
2.1 BOARD means the Board of Directors of the Company.
2.2 CODE means the Internal Revenue Code of 1986, as amended.
2.3 COMMITTEE means the committee of Non-Employee Directors
appointed by the Board to administer this Plan as contemplated by Section 5; in
the absence of such a committee, the term means the Board.
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2.4 COMPANY means American Nortel Communications, Inc, a Wyoming
corporation, and any successor to such corporation.
2.5 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.6 DESIGNATED COMMITTEE means a committee appointed by the Committee
in accordance with Section 5.
2.7 FAIR MARKET VALUE means the average of the closing bid and asked
prices for the Stock as reported on the OTC Bulletin Board or, if it is
available, the quoted selling price for Stock on the relevant date, as reported
in the Wall Street Journal or a similar publication selected by the Committee.
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2.8 INSIDER shall mean an employee who is, at the time of an award made
under this Plan, an insider pursuant to Section 16 of the Exchange Act.
2.9 KEY EMPLOYEE means any employee of the Company or a Subsidiary,
who, in the judgment of the Committee acting in its absolute discretion, is a
key to the success of the Company or a Subsidiary.
2.10 NON-EMPLOYEE DIRECTOR means any member of the Board of Directors
of the Company qualified as such under SEC Rule 16b-3(b)(3)(1) under the
Exchange Act, or any successor rule.
2.11 NON-ISO means any option granted under this Plan to purchase stock
which fails to satisfy the requirements of Section 422 of the Code or has been
specifically denominated as a non-ISO by the Committee as of the time the option
is granted.
2.12 OPTION means a Non-ISO.
2.13 OPTION AGREEMENT means the written agreement or instrument which
sets forth the terms of an Option granted under this Plan.
2.14 OPTION PRICE means the price which shall be paid to purchase one
share of stock upon the exercise of an Option granted under this Plan.
2.15 OUTSIDE DIRECTOR means any member of the Board of Directors of the
Company who is not employed by the Company, regardless of whether such person
qualifies as a Non-Employee Director.
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2.16 PARENT CORPORATION means any corporation which is a parent
corporation of the Company within the meaning of Section 424(e) of the Code.
2.17 PLAN means the American Nortel Communications, Inc. Stock Option
Plan, as amended from time to time.
2.18 SECURITIES ACT means the Securities Act of 1933, as amended.
2.19 SEC means the Securities Exchange Commission.
2.20 STOCK means the Common Stock of the Company.
2.21 SUBSIDIARY means any corporation which is a subsidiary
corporation of the
Company within the meaning of Section 424(f) of the Code.
SECTION 3. SHARES SUBJECT TO OPTIONS
There shall be 1,750,000 shares of Stock reserved for issuance in
connection with Options granted under this Plan. Such shares of Stock shall be
reserved to the extent that the Company deems appropriate from authorized but
unissued shares of Stock and from shares of Stock which have been reacquired by
the Company. Any shares of Stock subject to an Option which remain after the
cancellation, expiration or exchange of such Option for another Option
thereafter shall again become available for use under this Plan. All Options
granted under this Plan shall be Non-ISOs.
SECTION 4. EFFECTIVE DATE
The effective date of this Plan shall be July 8, 2000.
SECTION 5. COMMITTEE
If the Board includes at least two Non-Employee Directors, this Plan shall
be administered by a Committee consisting solely of not less than two (2)
Non-Employee Directors; otherwise, as Plan shall be administered by the Board.
The Committee acting in its absolute discretion shall exercise such powers and
take such action as expressly called for under this Plan. Furthermore, the
Committee shall have the power to interpret this Plan and to take such other
action in the administration and operation of this Plan as the Committee deems
equitable under the circumstances, which action shall be binding on the Company,
on each affected Key Employee or Outside Director and on each other person
directly or indirectly affected by such action.
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SECTION 6. ELIGIBILITY
Only Key Employees and Non-Employee Directors shall be eligible for the
grant of Options under this Plan.
SECTION 7. GRANT OF OPTIONS
7.1 COMMITTEE ACTION. The Committee acting in its absolute discretion
shall grant Options to Key Employees under this Plan from time to time to
purchase shares of Stock and, further, shall have the right to grant new Options
in exchange for outstanding Options. Options shall be granted to Non-Employee
Directors as provided in Section 7.3 of this Plan. Each grant of an Option
shall be evidenced by an Option Agreement, and each Option Agreement shall
incorporate such other terms and conditions as the Committee acting in its
absolute discretion deems consistent with the terms of this Plan, including,
without limitation, a limitation on the number of shares subject to the Option
which first became exercisable or subject to surrender during any particular
period.
7.2 GRANTS OF NON-ISOS TO OUTSIDE DIRECTORS. (a) On the last business
day of each September during the term of this Plan each then Outside Director
shall be granted, without any further action on the part of the Committee, a
Non-ISO hereunder to purchase 10,000 shares of Stock at the Fair Market Value of
such Stock on the date of grant. If an Outside Director is first elected a
director before or after, but not on, the last business day of September, upon
such election, such Outside Director shall be automatically granted a
non-qualified option to purchase 834 shares of Class A Common Stock for each
full month remaining until the last business day in September
following the date of the Outside Director's election. Each such Option shall
be exercisable in whole or in part one year after the date of grant, provided
that such Outside Director has continued as an Outside Director for one year (or
until his or her date of death, if earlier), and shall remain exercisable until
the tenth anniversary of the date such Option is granted.
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SECTION 8. OPTION PRICE
The Option Price for each share of Stock subject to an Option shall not be
less than 85% of the Fair Market Value of a share of Stock on the date the
Option is granted. The Option Price shall be payable in full upon the exercise
of any Option, and an Option Agreement at the discretion of the Committee
(except for an Option granted to a Non-Employee Director) may provide for the
payment of the Option Price either in cash or in Stock acceptable to the
Committee or in any combination of cash and Stock acceptable to the Committee.
Any payment made in Stock shall be treated as equal to the Fair Market Value of
such Stock on the date the properly endorsed certificate for such Stock is
delivered to the Committee.
SECTION 9. EXERCISE PERIOD
(a) Each Option granted under this Plan shall be exercisable in whole
or in part at such time or times as set forth in the related Option
Agreement, but no Option Agreement shall provide that:
(1) an Option is exercisable before the date such Option is
granted, or
(2) an Option is exercisable after the date which is the tenth
anniversary of the date such Option is granted.
No Option shall be exercisable until at least six months have elapsed since
the date the Option was granted. An Option Agreement may provide for the
exercise of an Option after the employment of a Key Employee or service by a Key
Consultant has terminated for any reason whatsoever, including death or
disability. In connection with the termination for any reason of employment by
or service to the Company or any Subsidiary of any particular holder of any
Option, the Committee may, in its discretion, determine to extend the period
during which such Option may be exercised as provided in the related Option
Agreement; provided, however, that no such extension shall pen-nit an Option to
be exercised beyond the date specified in paragraph (b) of this Section or the
date applicable to Options granted to a Ten Percent Shareholder, as the case may
be.
SECTION 10. TRANSFERABILITY
The Committee shall impose such restrictions on the transfer of options
granted under the Plan as it may deem advisable, including, without limitation,
restrictions deemed necessary or advisable under applicable federal securities
laws, under the requirements of any stock exchange or market upon which Stock is
then listed in or traded, and under any Blue Sky or state securities laws
applicable to such Stock. Upon request of any person receiving an award of an
Option under the Plan, the Committee may, in its sole and absolute discretion,
determine to remove any such transfer restriction originally imposed and may, in
connection with the removal of such transfer restriction, impose such conditions
(including restrictions on further transfers of the Option or upon transfers of
the Shares upon exercise of the Option) as the Committee, in its discretion, may
deem advisable, including, without limitation, restrictions deemed by the
Committee to be necessary or advisable in order to comply with applicable
federal and state securities laws or the requirements of any stock exchange or
market upon which the Stock is then listed or traded. Subject to its authority
to impose such conditions on further transfers, the Committee shall authorize
the transfer of Options for bona fide estate planning, purposes or for
contributions to qualified charities or charitable trusts.
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SECTION 11. SECURITIES REGISTRATION AND RESTRICTIONS
Each Option Agreement shall provide that, upon the receipt of shares
of Stock as a result of the exercise or surrender of an Option, the Key Employee
or Outside Director shall, if so requested by the Company, hold such shares of
Stock for investment and not with a view toward resale or distribution to the
public and, if so requested by the Company, shall deliver to the Company a
written statement to that effect satisfactory to the Company. Each Option
Agreement shall also provide that, if so requested by the Company, the Key
Employee or Outside Director shall represent in writing to the Company that he
or she will not sell or offer to sell any such shares of Stock unless a
registration statement shall be in effect with respect to such Stock under the
Securities Act and any applicable state securities law or unless he or she shall
have furnished to the Company an opinion, in form and substance satisfactory to
the Company, of legal counsel acceptable to the Company, that such registration
is not required. Certificates representing the Stock transferred upon the
exercise or surrender of an Option granted under this Plan may at the discretion
of the Company bear a legend to the effect that such Stock has not been
registered under the Securities Act or any applicable state securities law and
that such Stock may not be sold or offered for sale in the absence of (i) an
effective registration statement as to such Stock under the Securities Act and
any applicable state securities law or (ii) an opinion, in form and substance
satisfactory to the Company, of legal counsel acceptable to the Company, that
such registration is not required. Furthermore, the Company shall have the
right to require a Key Employee or Outside Director to enter into such
stockholder or other related agreements as the Company deems necessary or
appropriate under the circumstances as a condition to the issuance of any Stock
under this Plan to a Key Employee or Outside Director.
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SECTION 12. LIFE OF PLAN
No Option shall be granted under this Plan on or after the earlier of
(a) the tenth anniversary of the original effective date of this Plan
as determined under Section 4; provided, however, that after such anniversary
date this Plan otherwise shall continue in effect until all outstanding Options
have been exercised in full or no longer are exercisable, or
(b) the date on which all of the Stock reserved under Section 3 of
this Plan has, as a result of the exercise of Options granted under this Plan,
been issued or no longer is available for use under this Plan, in which event
this Plan also shall terminate on such date.
SECTION 13. ADJUSTMENT
The number of shares of Stock reserved under Section 3 of this Plan,
the number of shares of Stock to be granted from time to time pursuant to
Section 7.3 of this Plan (if permitted by the exemption in Rule 16b-3 under the
Exchange Act or any successor rule), and the number of shares of Stock subject
to Options granted under this Plan and the Option Price of such Options shall be
adjusted by the Board in an equitable manner to reflect any change in the
capitalization of the Company, including, but not limited to, such changes as
stock dividends or stock splits. Furthermore, the Board shall have the right to
adjust in a manner which satisfies the requirements of Section 424(a) of the
Code the number of shares of Stock reserved under Section 3 of this Plan and the
number of shares subject to Options granted under this Plan and the Option Price
of such Options in the event of any corporate transaction described in Section
424(a) of the Code that provides for the substitution or assumption of such
Options. If any adjustment under this Section 13 would create a fractional
share of Stock or a right to acquire a fractional share of Stock, such
fractional share shall be disregarded and the number of shares of Stock reserved
under this Plan and the number subject to any Options granted under this Plan
shall be the next lower number of shares of Stock, rounding all fractions
downward. An adjustment made under this Section 13 by the Board shall be
conclusive and binding on all affected persons and, further, shall not
constitute an increase in "the number of shares reserved under Section 3" within
the meaning of Section 15(a) of this Plan.
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SECTION 14. SALE OR MERGER OF THE COMPANY
If the Company agrees to sell all or substantially all of its assets for
cash or property or for a combination of cash and property or agrees to any
merger, consolidation, reorganization, division or other corporate transaction
in which Stock is converted into another security or into the right to receive
securities or property and such agreement does not provide for the assumption or
substitution of the Options granted under this Plan, each then outstanding
Option at the direction and discretion of the Board may be canceled unilaterally
by the Company as of the effective date of such transaction in exchange for a
payment in cash or Stock, or in a combination of cash and Stock, equal in amount
to the excess of the Fair Market Value on such date of the shares represented by
the cancelled Options over the Option Price for such shares.
SECTION 15. AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate; provided, however, that no such
amendment shall be made absent the approval of the stockholders of the Company
(a) to increase the aggregate number of shares reserved under Section 3, (b) to
change the class of persons eligible for Options under Section 6 or (c) to
materially modify the requirements as to eligibility for participation in this
Plan, (d) to otherwise materially increase the benefits accruing under this Plan
to Plan participants if such approval would be required in order for the Company
to comply with applicable law or the rules or regulations of any stock exchange
or market on which the Stock is traded or listed. The Board also may suspend
the granting of Options under this Plan at any time and may terminate this Plan
at any time; provided, however, that the Company shall not have the right to
unilaterally cancel or, in a manner which would materially adversely affect the
holder, amend or modify any Option granted before such suspension or termination
unless (i) the Key Employee or Outside Director consents in writing to such
modification, amendment or cancellation or (ii) there is a dissolution or
liquidation of the Company or a transaction described in Section 13 or Section
14 of this Plan.
It is the intention of the Company that the Plan shall comply with the
conditions of Rule 16b-3 of the Exchange Act, as such Rule may from time to time
be amended. The Board shall have the authority, without the approval of the
stockholders, to amend the Plan from time to time to include any conditions,
terms or other provisions which may be required to be set forth in a plan in
order for transactions by directors or officers to be exempt under Rule 16b-3 of
the Exchange Act or any successor exemption.
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SECTION 16. MISCELLANEOUS
16.1 NO STOCKHOLDER RIGHTS. No Key Employee or Outside Director shall
have any rights as a stockholder of the Company as a result of the grant of an
Option to him or to her under this Plan or his or her exercise or surrender of
such Option pending the actual delivery of Stock subject to such Option to such
Key Employee or Non-Employee Director.
16.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option to a Key
Employee or Outside Director under this Plan shall not constitute a contract of
employment or consulting or right to continue to serve on the Company's Board of
Directors and shall not confer on a Key Employee or Outside Director any rights
upon his or her termination of employment or service in addition to those
rights, if any, expressly set forth in the Option Agreement which evidences his
or her Option.
16.3 WITHHOLDING. The exercise or surrender of any Option granted
under this Plan shall constitute a Key Employee's full and complete consent to
whatever action the Committee elects to satisfy the federal and state tax
withholding requirements, if any, which the Committee in its discretion deems
applicable to such exercise or surrender.
16.4 CONSTRUCTION. This Plan and the Option Agreements shall be
construed under the laws of the State of Arizona.
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