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EXHIBIT 4.02
NON-QUALIFIED STOCK OPTION
THIS NONQUALIFIED STOCK OPTION (this "Option") is granted this 24th day of
October 2000, by INDUSTRIAL ECOSYSTEMS, INC., a Delaware corporation (the
"Company"), pursuant to a resolution of the board of directors of the Company,
to Marte Anderson, an individual residing at 3217 Collins Blvd., Garland,
Texas 75044 (Telephone: 214-585-3410, Social Security No: 481-80-5865
(hereinafter "Optionee").
1. Grant of Option. The Company hereby grants to Optionee, the right and
option to purchase all or any part of an aggregate of one-million, two-hundred
thousand (1,200,000) shares of common stock, par value $0.01 per share (the
"Common Stock") of the Company on the terms and conditions hereinafter set
forth and subject to the provisions contained herein. This Option shall vest
upon its grant.
2. Exercise Price. The exercise price of this Option shall be five cents
($0.05) per share of Common Stock. Such exercise price represents a price per
share that is equal to or greater than the average closing price per share of
the Company's common stock during the five-day period prior to the date first
written above.
3. Term of Option. Subject to the other provisions of this Option, this
Option may be exercised, in whole or in part, at any time prior to one (1)
year from the date of this Option; provided, however, that the exercise price
times the number of Shares first exercisable in any calendar year, together
with the fair market value of the shares of Common Stock subject to any other
options held by Optionee that are first exercisable in such year, shall not
exceed $100,000; and provided further, that this Option shall terminate three
months after Optionee ceases to be an eligible employee of the Company as
defined in the Internal Revenue Code of 1986, as amended (the "Code") or sales
consultant/representative of the Company pursuant to Sales Consultant's
Agreement dated October 24, 2000.
4. Shareholder's Rights. The Optionee shall have the rights of a
shareholder only with respect to Common Stock fully paid for by him under this
Option.
5. Persons Entitled to Exercise. During the Optionee's lifetime, this
Option can be exercised only by Optionee, and neither this Option nor any
right hereunder can be transferred other than by testamentary disposition or
the laws of descent and distribution. Neither this Option nor any right
hereunder shall be subject to lien, attachment, execution, or similar process.
In the event of any alienation, assignment, pledge, hypothecation, or other
transfer of this Option or any right hereunder or in the event of any levy,
attachment, execution, or similar process, this Option and all rights granted
hereunder shall be immediately null and void.
6. Qualification as Incentive Stock Option. This Option is not intended to
qualify as an "Incentive Stock Option" under section 422 of the Code or any
successor section of like tenor.
7. Adjustment to Number of Shares of Common Stock. The number of shares of
Common Stock subject to this Option shall be adjusted to take into account any
stock split, stock dividend, or recapitalization of the Common Stock of the
Company as provided in the Stock Option Plan.
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8. Method of Exercise. This Option may be exercised, in accordance with
all of the terms and conditions set forth in this Option, by delivery of a
notice of exercise, a form of which is attached hereto as Exhibit "1" and
incorporated herein by this reference, in any of the following ways:
(a) If the Optionee decides to exercise this Option and make payment, in
whole or in part, for the shares of Common Stock in full, Optionee shall
include with the notice of exercise the number of shares of Common Stock that
Optionee then elects to purchase, accompanied by cash, a certified check, or
a bank check payable to the order of the Company in the amount of the full
option price of the Common Stock being purchased.
(b) If the Optionee decides to exercise this Option and make payment, in
whole or in part, for the Common Stock, Optionee may submit an invoice for
sales commission or consulting fees due Optionee pursuant to the Sales
Representative's Agreement.
As soon as practicable after receipt by the Company of such notice and of
payment in full of the option price of all the shares of Common Stock with
respect to which the Option has been exercised (including interest if payment
is made in installments), a certificate or certificates representing such
shares of Common Stock shall be issued in the name of the Optionee, or, if
the Optionee shall so requests in the notice exercising the Option, in the
name or names so designated by the Optionee. To the extent required by the
terms of this Option, all Common
Stock shall be issued only upon receipt by the Company of the Optionee's
representation that the shares are purchased for investment and not with a
view to distribution thereof. If this Option is not exercised with respect to
all Common Stock subject hereto, Optionee shall be entitled to receive a
similar Option of like tenor covering the number of shares of Common Stock
with respect to which this Option shall not have been exercised.
9. Availability of Shares. During the term of this Option, the Company
shall at all times keep available for issuance the number of shares of Common
Stock Option subject to this Option.
10. Limitations on Right to Exercise.
(a) If the board of directors of the Company, in its sole discretion,
shall determine that it is necessary or desirable to list, register, or
qualify the Common Stock under any state or federal law, this Option may not
be exercised, in whole or part, until such listing, registration, or
qualification shall have been obtained free of any conditions not acceptable
to the board.
11. No Right of Employment. Nothing contained in this Option shall be
construed as conferring any right to continue or remain as a director,
employee or consultant of the Company or its subsidiaries.
12. Registration Rights. At such time as the Company is eligible to
utilize Form S-8 under the Securities Act, the Company intends to register the
shares of common stock issuable upon exercise of this option under
registration statement on Form S-8 to be filed with the SEC. The Company will
pay all expenses of such registration, ncluding legal, accounting and filing
fees. The rights granted under this paragraph are granted to the individual or
entity named on the Option, subject to the eligibility requirements of Form
S-8 and the exercise and transfer restrictions included in the Option and may
not be transferred or assigned.
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13. Restrictions on Transfer. The Option and the Common Stock subject to
the Option (collectively referred to as the "Securities") are subject to
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and any applicable state securities statutes. Optionee acknowledges
that unless a registration statement with respect to the Securities is filed
and declared effective by the Securities and Exchange Commission and the
appropriate state governing agency, the Securities have or will be issued in
reliance on specific exemptions from such registration requirements for
transactions by an issuer not involving a public offering and specific
exemptions under state statutes. Any disposition of the Securities may, under
certain circumstances, be inconsistent with such exemptions. The Securities
may be offered for sale, sold, or otherwise transferred only if (i) registered
under the Securities Act, and in some cases, under the applicable state
securities acts, or, if not registered, (ii) only if pursuant to an exemption
from such registration requirements and only after the Optionee provides an
opinion of counsel or other evidence satisfactory to the Company to the effect
that registration is not required. In some states, specific conditions must
be met or approval of the securities regulatory authorities may be required
before any such offer or sale. The Company is under no obligation to register
the Securities with the Securities and Exchange Commission or any state
agency. If rule 144 is available (and no assurance is given that it will be),
only routine sales of the Common Stock in limited amounts can be made after
one year following the acquisition date of the Securities, as determined under
rule 144(d), in accordance with the terms and conditions of rule 144. The
Company is under no obligation to make rule 144 available. In the event rule
144 is not available, compliance with regulation A or some other disclosure
exemption may be required before the Optionee can sell, transfer, or otherwise
dispose of the Securities without registration. The Company and its registrar
and transfer agent will maintain a stop transfer order against the transfer of
the Securities, and this Option and any other certificate or agreement
representing the Securities is subject to the following legend:
THE SECURITIES REPRESENTED BY THIS OPTION, AGREEMENT, OR CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
The Company may refuse to transfer the Securities to any transferee who does
not furnish in writing to the Company the same representations and warranties
set forth in this paragraph and agree to the same conditions with respect to
such Securities as are set forth herein. The Company may further refuse to
transfer the Securities if certain circumstances are present reasonably
indicating that the proposed transferee's representations are not accurate.
In any event, the Company may refuse to consent to any transfer in the absence
of an opinion of legal counsel, satisfactory to and independent of counsel of
the Company, that such proposed transfer is consistent with the above
conditions and applicable securities laws.
14. Record Owner. The Company may deem the Optionee as the absolute owner
of this Option for all purposes. This Option is exercisable only by the
Optionee or, by the Optionee?s duly designated or appointed representative.
This Option is not assignable.
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15. Validity and Construction. The validity and construction of this
Option shall be governed by the laws of the state of Utah.
EXECUTED as of the date first above written.
INDUSTRIAL ECOSYSTEMS, INC. OPTIONEE:
By: /S/Tom Jarnagin, President /S/Marte Anderson
