SAFESCIENCE, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the SafeScience, Inc. 2000 Stock
Incentive Plan (the "Plan") is to provide (i) key employees of SafeScience, Inc.
(the "Company") and its subsidiaries, (ii) certain consultants and advisors who
perform services for the Company or its subsidiaries, and (iii) members of the
Board of Directors of the Company (the "Board"), with the opportunity to acquire
shares of the Common Stock of the Company ("Common Stock") or receive monetary
payments based on the value of such shares. The Company believes that the Plan
will enhance the incentive for Participants (as defined in Section 3) to
contribute to the growth of the Company, thereby benefiting the Company and the
Company's shareholders, and will align the economic interests of the
Participants with those of the shareholders.
2. Administration.
(a) Committee. The Plan shall be administered and interpreted
by a compensation committee (the "Committee"). The Committee may consist of two
or more members of the Board who are "outside directors" as defined under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
"non-employee directors" as defined under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or such other members of
the Board.
(b) Authority of Committee. The Committee has the sole
authority, subject to the provisions of the Plan, to (i) select the employees
and other individuals to receive Awards (as defined in Section 4) under the
Plan, (ii) determine the type, size and terms of the Awards to be made to each
individual selected, (iii) determine the time when the Awards will be granted
and the duration of any applicable exercise and vesting period, including the
criteria for exercisability and vesting and the acceleration of exercisability
and vesting with respect to each individual selected, and (iv) deal with any
other matter arising under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determination that it deems necessary or desirable for the administration of the
Plan. The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any Award in the manner and to the extent
the Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. All powers of the Committee shall be executed in its sole discretion
and need not be uniform as to similarly situated individuals. Any act of the
Committee with respect to the Plan may only be undertaken and executed with the
affirmative consent of at least two-thirds of the members of the Committee.
(c) Responsibility of Committee. No member of the Board, no
member of the Committee and no employee of the Company shall be liable for any
act or failure to act hereunder, except in circumstances involving his or her
bad faith, gross negligence or willful misconduct, or for any act or failure to
act hereunder by any other member of the Committee or employee of the Company.
The Company shall indemnify members of the Committee and any employee of the
Company against any and all liabilities or expenses to which they may be
subjected by reason of any act or failure to act with respect to their duties
under the Plan, except in circumstances involving his or her bad faith, gross
negligence or willful misconduct.
(d) Delegation of Authority. The Committee may delegate to the
President of the Company the authority to (i) make grants under the Plan to
employees of the Company and its subsidiaries who are not subject to the
restrictions of Section 16(b) of the Exchange Act and who are not expected to be
subject to the limitations of Section 162(m) of the Code, and (ii) execute and
deliver documents or take any other ministerial actions on behalf of the
Committee with respect to Awards. The grant of authority under this Subsection
2(d) shall be subject to such conditions and limitations as may be determined by
the Committee. If the President makes grants pursuant to the delegated authority
under this Subsection 2(d), references in the Plan to the "Committee" as they
relate to making such grants shall be deemed to refer to the President.
3. Participants. All employees, officers and directors of the
Company and its subsidiaries (including members of the Board who are not
employees), as well as consultants and advisors to the Company or its
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subsidiaries, are eligible to participate in the Plan. Consistent with the
purposes of the Plan, the Committee shall have exclusive power to select the
employees, officers, directors and consultants and advisors who may participate
in the Plan ("Participants"). Eligible individuals may be selected individually
or by groups or categories, as determined by the Committee in its discretion,
and designation as a person to receive Awards in any year shall not require the
Committee to designate such a person as eligible to receive Awards in any other
year.
4. Types of Awards. Awards under the Plan may be granted in
any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights,
(c) Stock Awards, and (d) Performance Awards (each as described below, and
collectively, "Awards"). Awards may constitute Performance-Based Awards, as
described in Section 10. Each Award shall be evidenced by a written agreement
between the Company and the Participant (an "Agreement"), which need not be
identical between Participants or among Awards, in such form as the Committee
may from time to time approve; provided, however, that in the event of any
conflict between the provisions of the Plan and any Agreement, the provisions of
the Plan shall prevail.
5. Common Stock Available under the Plan. The aggregate number
of shares of Common Stock that may be subject to Awards shall be 1,000,000
shares of Common Stock, which may be authorized and unissued or treasury shares,
subject to any adjustments made in accordance with Section 11 hereof. The
maximum number of shares of Common Stock with respect to which Awards may be
granted to any individual Participant shall be 300,000 shares. Any share of
Common Stock subject to an Award that for any reason is cancelled or terminated
without having been exercised or vested shall again be available for Awards
under the Plan; provided, however, that any such availability shall apply only
for purposes of determining the aggregate number of shares of Common Stock
subject to Awards and shall not apply for purposes of determining the maximum
number of shares subject to Awards that any individual Participant may receive.
6. Stock Options. Stock Options will enable a Participant to
purchase shares of Common Stock upon set terms and at a fixed purchase price.
Stock Options may be treated as (i) "incentive stock options" within the meaning
of Section 422(b) of the Code ("Incentive Stock Options"), or (ii) Stock Options
which do not constitute Incentive Stock Options ("Nonqualified Stock Options").
Each Stock Option shall be subject to the terms, conditions and restrictions
consistent with the Plan as the Committee may impose, subject to the following
limitations:
(a) Exercise Price. The exercise price per share (the
"Exercise Price") of Common Stock subject to a Stock Option shall be
determined by the Committee and may be equal to, greater than, or less
than the Fair Market Value (as defined in Section 15) of a share of
Common Stock on the date the Stock Option is granted.
(b) Payment of Exercise Price. The Exercise Price may be paid
in cash or, in the discretion of the Committee, by the delivery of
shares of Common Stock that have been owned by the Participant for at
least six months, or by a combination of these methods. In the
discretion of the Committee, payment may also be made by delivering a
properly executed exercise notice to the Company together with a copy
of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the Exercise Price.
To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms. The Committee
may also prescribe any other method of paying the Exercise Price that
it determines to be consistent with applicable law and the purpose of
the Plan, including, without limitation, in lieu of the exercise of a
Stock Option by delivery of shares of Common Stock of the Company then
owned by the Participant, providing the Company with a notarized
statement attesting to the number of shares owned for at least six
months, where upon verification by the Company, the Company would issue
to the Participant only the number of incremental shares to which the
Participant is entitled upon exercise of the Stock Option.
(c) Exercise Period. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee; provided, however, that no Stock Option
shall be exercisable later than ten years after the date it is granted.
All Stock Options shall terminate at such earlier times and upon such
conditions or circumstances as the Committee shall determine, as set
forth in the related Agreement.
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(d) Limitations on Incentive Stock Options. Incentive Stock
Options may be granted only to Participants who, at the time of the
grant, are employees of the Company or a parent or subsidiary of the
Company, and only at an Exercise price that is not less than the Fair
Market Value of a share of Common Stock on the date of the grant. The
aggregate Fair Market Value of the Common Stock (determined as of the
date of the grant) with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar
year (under all option plans of the Company) shall not exceed $100,000.
For purposes of the preceding sentence, Incentive Stock Options will be
taken into account in the order in which they are granted. Incentive
Stock Options may not be granted to a Participant who, at the time of
grant, owns stock possessing (after the application of the attribution
rules of Section 424(d) of the Code) more than 10% of the total
combined voting power of all outstanding classes of stock of the
Company or any subsidiary of the Company, unless the option price is
fixed at not less than 110% of the Fair Market Value of the Common
Stock on the date of grant and the exercise of such Incentive Stock
Option is prohibited by its terms after the expiration of five years
from its date of grant.
(e) Termination of Employment, Disability or Death.
(1) Except as provided below or in an Agreement, a Stock
Option may only be exercised while the Participant is employed by, or
providing service to, the Company, as an employee, member of the Board
or advisor or consultant. In the event that a Participant ceases to be
employed by, or provide service to, the Company for any reason other
than Disability (as defined in Paragraph (5) below), death or
termination for Cause (as defined in Paragraph (5) below), any Stock
Option which is otherwise exercisable by the Participant shall
terminate unless exercised within 90 days after the date on which the
Participant ceases to be employed by, or provide service to, the
Company, but in any event no later than the date of expiration of the
Stock Option. Except as otherwise provided by the Committee, any Stock
Options which are not otherwise exercisable as of the date on which the
Participant ceases to be employed by, or provide service to, the
Company shall terminate as of such date.
(2) In the event the Participant ceases to be employed by, or
provide service to, the Company on account of a termination for Cause
by the Company, any Stock Option held by the Participant shall
terminate as of the date the Participant ceases to be employed by, or
provide service to, the Company. In addition, notwithstanding any other
provisions of this Section 6, if the Committee determines that the
Participant has engaged in conduct that constitutes Cause at any time
while the Participant is employed by, or providing service to, the
Company, or after the Participant's termination of employment or
service, any Stock Option held by the Participant shall immediately
terminate. In the event the Committee determines that the Participant
has engaged in conduct that constitutes Cause, in addition to the
immediate termination of all Stock Options, the Participant shall
automatically forfeit all shares underlying any exercised portion of a
Stock Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the Exercise Price paid by
the Participant for such shares (subject to any right of setoff by the
Company).
(3) In the event the Participant ceases to be employed by, or
provide service to, the Company because the Participant is Disabled,
any Stock Option which is otherwise exercisable by the Participant
shall terminate unless exercised within one year after the date on
which the Participant ceases to be employed by, or provide service to,
the Company, but in any event no later than the date of expiration of
the Stock Option.
(4) If the Participant dies while employed by, or providing
service to, the Company, any Stock Option which is otherwise
exercisable by the Participant shall terminate unless exercised within
one year after the date on which the Participant ceases to be employed
by, or provide service to, the Company, but in any event no later than
the date of expiration of the Stock Option.
(5) For purposes of this Section 6(e):
(A) The term "Company" shall mean the Company and its
subsidiary corporations.
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(B) "Disability" or "Disabled" shall mean a
Participant's becoming disabled within the meaning of Section
22(e)(3) of the Code.
(C) "Cause" shall mean, except to the extent
specified otherwise by the Committee, a finding by the
Committee that the Participant has breached any provision of
his or her terms of employment or service contract with the
Company, including without limitation covenants against
competition, or has engaged in disloyalty to the Company,
including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of
his or her employment or service, or has disclosed trade
secrets or confidential information of the Company to persons
not entitled to receive such information.
7. Stock Appreciation Rights. Stock Appreciation Rights shall
provide a Participant with the right to receive a payment, in cash, Common Stock
or a combination thereof, in an amount equal to the excess of (i) the Fair
Market Value, or other specified valuation, of a specified number of shares of
Common Stock on the date the right is exercised, over (ii) the Fair Market Value
of such shares on the date of grant, or other specified valuation (which shall
be no less than the Fair Market Value on the date of grant). Each Stock
Appreciation Right shall expire no more than ten years from its date of grant,
and shall be subject to such other terms and conditions as the Committee shall
deem appropriate, including, without limitation, provisions for the forfeiture
of the Stock Appreciation Right for no consideration upon termination of
employment.
8. Stock Awards. Stock Awards shall consist of Common Stock
issued or transferred to Participants with or without other payments therefor as
additional compensation for services to the Company. Stock Awards may be subject
to such terms and conditions as the Committee determines appropriate, including,
without limitation, restrictions on the sale or other disposition of such shares
and the right of the Company to reacquire such shares for no consideration upon
termination of the Participant's employment within specified periods or prior to
becoming vested. The Committee may require the Participant to deliver a duly
signed stock power, endorsed in blank, relating to the Common Stock covered by a
Stock Award. The Committee may also require that the stock certificates
evidencing such shares be held in custody or bear restrictive legends until the
restrictions thereon shall have lapsed. The Stock Award shall specify whether
the Participant shall have, with respect to the shares of Common Stock subject
to a Stock Award, all of the rights of a holder of shares of Common Stock of the
Company, including the right to receive dividends and to vote the shares.
9. Performance Awards. Performance Awards shall provide a
Participant with the right to receive a specified number of shares of Common
Stock or cash at the end of a specified period. The Committee shall have
complete discretion in determining the number, amount and timing of Performance
Awards granted to each Participant. The Committee may condition the payment of
Performance Awards upon the attainment of specific performance goals or such
other terms and conditions as the Committee deems appropriate, including,
without limitation, provisions for the forfeiture of such payment for no
consideration upon termination of the Participant's employment prior to the end
of a specified period.
10. Performance-Based Awards. Certain Awards granted under the
Plan may be granted in a manner such that they qualify for the performance based
compensation exemption of Section 162(m) of the Code ("Performance-Based
Awards"). As determined by the Committee in its sole discretion, either the
granting or vesting of such Performance-Based Awards are to be based upon one or
more of the following factors: net sales; pretax income before allocation of
corporate overhead and bonus; budget; earnings per share; net income; division,
group or corporate financial goals; return on stockholders' equity; return on
assets; attainment of strategic and operational initiatives; appreciation in
and/or maintenance of the price of the Common Stock or any other publicly-traded
securities of the Company; market share; gross profits; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
economic value-added models and comparisons with various stock market indices;
reduction in costs; or any combination of the foregoing. With respect to
Performance-Based Awards that are not Stock Options or Stock Appreciation Rights
based solely on the appreciation in the Fair Market Value of Common Stock after
the grant of the Award, (i) the Committee shall establish in writing (x) the
objective performance-based goals applicable to a given period and (y) the
individual employees or class of employees to which such performance-based goals
apply, no later than 90 days after the commencement of such fiscal period (but
in no event after 25% of such period has elapsed), (ii) no Performance-Based
Awards shall be payable to or vest with respect to, as the case may be, any
Participant for a given fiscal period until the Committee certifies in writing
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that the objective performance goals (and any other material terms) applicable
to such period have been satisfied, and (iii) the Committee may reduce or
eliminate the number of shares of Common Stock or cash granted or the number of
shares of Common Stock vested upon the attainment of such performance goal.
After establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as
determined in accordance with Section 162(m) of the Code) upon the attainment of
such performance goal.
11. Adjustments to Awards. In the event of any change in the
outstanding Common Stock of the Company by reason of any stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares, a sale by the
Company of all or part of its assets, or in the event of any distribution to
stockholders of other than a normal cash dividend, or other extraordinary or
unusual event, if the Committee shall determine, in its discretion, that such
change equitably requires an adjustment in the terms of any Awards or the number
of shares of Common Stock that are subject to Awards, such adjustment shall be
made by the Committee and shall be final, conclusive and binding for all
purposes of the Plan.
12. Change in Control.
(a) Effect. In its sole discretion, the Committee may
determine that, upon the occurrence of a Change in Control (as defined below),
all or a portion of each outstanding Award shall become exercisable in full (if
applicable, and whether or not then exercisable) upon the Change of Control or
at such other date or dates that the Committee may determine, and that any
forfeiture and vesting restrictions thereon shall lapse on such date or dates.
In its sole discretion, the Committee may also determine that, upon the
occurrence of a Change in Control, each outstanding Stock Option and Stock
Appreciation Right shall terminate within a specified number of days after
notice to the Participant thereunder, and each such Participant shall receive,
with respect to each share of Common Stock subject to such Stock Option or Stock
Appreciation Right, an amount equal to the excess of the Fair Market Value of
such shares immediately prior to such Change in Control over the exercise price
per share of such Stock Option or Stock Appreciation Right; such amount shall be
payable in cash, in one or more kinds of property (including the property, if
any, payable in the transaction) or a combination thereof, as the Committee
shall determine in its sole discretion.
(b) Defined. For purposes of this Plan, a Change in Control
shall be deemed to have occurred if:
(1) a tender offer (or series of related offers) shall be made
and consummated for the ownership of 30% or more of the outstanding
voting securities of the Company;
(2) the Company shall be merged or consolidated with another
corporation and as a result of such merger or consolidation less than
50% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders
of the Company, any employee benefit plan of the Company or its
subsidiaries, and their affiliates;
(3) the Company shall sell substantially all of its assets to
another corporation that is not wholly owned by the Company; or
(4) a Person (as defined below) shall acquire 30% or more of
the outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record).
For purposes of this Section 12(b), ownership of voting
securities shall take into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof)
under the Exchange Act. Also for purposes of this Subsection 12(b), Person shall
have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof; however, a Person shall not include
(1) the Company or any of its subsidiaries; (2) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
subsidiaries; (3) an underwriter temporarily holding securities pursuant to an
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offering of such securities; or (4) a corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same proportion as their
ownership of stock of the Company.
13. Transferability of Awards. Except as provided below, a
Participant's rights under an Award may not be transferred or encumbered, except
by will or by the laws of descent and distribution or, in the case of Awards
other than Incentive Stock Options, pursuant to a qualified domestic relations
order (as defined under Section 414(p) the Code). The Committee may provide, in
an Agreement for a Nonqualified Stock Option, for its transferability as a gift
to family members, one or more trusts for the benefit of family members, or one
or more partnerships of which family members are the only partners, according to
such terms as the Committee may determine; provided that the Participant
receives no consideration for the transfer and the transferred Nonqualified
Stock Option shall continue to be subject to the same terms and conditions as
were applicable to the Nonqualified Stock Option immediately before the
transfer.
14. Market Stand-Off.
(a) In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration, if
required by the Committee, a Participant shall not sell, make any short sale of,
loan, hypothecate, pledge, grant any option for the purchase of, or otherwise
dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to, any Common Stock without the prior
written consent of the Company or its underwriters. Such restriction (the
"Market Stand-Off") shall be in effect for such period of time from and after
the effective date of the final prospectus for the offering as may be requested
by the Company or such underwriters, but in no event shall such period exceed
one hundred eighty (180) days.
(b) A Participant shall be subject to the Market Stand-Off
provided and only if the officers and directors of the Company are also subject
to similar restrictions.
(c) In order to enforce the Market Stand-Off, the Corporation
may impose stop-transfer instructions with respect to the Common Stock until the
end of the applicable stand-off period.
15. Fair Market Value. If Common Stock is publicly traded,
then the "Fair Market Value" per share shall be determined as follows: (1) if
the principal trading market for the Common Stock is a national securities
exchange or the NASDAQ National Market, the last reported sale price thereof on
the relevant date or, if there were no trades on that date, the latest preceding
date upon which a sale was reported, or (2) if the Common Stock is not
principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Common Stock on the relevant date, as
reported on NASDAQ or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Common Stock is
not publicly traded or, if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, the Fair Market
Value per share shall be as determined by the Committee.
16. Withholding. All distributions made with respect to an
Award shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. The Company may require a
Participant to remit to it or to the subsidiary that employs a Participant an
amount sufficient to satisfy such tax withholding requirements prior to the
delivery of any certificates for Common Stock. In lieu thereof, the Company or
the employing corporation shall have the right to withhold the amount of such
taxes from any other sums due or to become due to the Participant as the Company
shall prescribe. The Committee may, in its discretion and subject to such rules
as it may adopt, permit a Participant to pay all or a portion of the federal,
state and local withholding taxes arising in connection with any Award by
electing to have the Company withhold shares of Common Stock having a Fair
Market Value that is not in excess of the amount of tax to be withheld.
17. Shareholder Rights. A Participant shall not have any of
the rights or privileges of a holder of Common Stock for any Common Stock that
is subject to an Award, including any rights regarding voting or the payment of
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dividends (except as expressly provided under the terms of the Award), unless
and until a certificate representing such Common Stock has been delivered to the
Participant.
18. Tenure. A Participant's right, if any, to continue to
serve the Company or its subsidiaries as a director, officer, employee,
consultant or advisor shall not be expanded or otherwise affected by his or her
designation as a Participant.
19. No Fractional Shares. No fractional shares of Common Stock
shall be issued or delivered pursuant to the Plan or any Award. The Committee
shall determine whether cash shall be paid in lieu of fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
20. Duration, Amendment and Termination. No Award may be
granted more than ten years after the Effective Date (as described in Section
22). The Plan may be amended or suspended in whole or in part at any time and
from time to time by the Board, but no amendment shall be effective unless and
until the same is approved by shareholders of the Company where the amendment
would (i) increase the total number of shares which may be issued under the Plan
or (ii) increase the maximum number of shares which may be issued to any
individual Participant under the Plan. No amendment or suspension of the Plan
shall adversely affect in a material manner any right of any Participant with
respect to any Award theretofore granted without such Participant's written
consent.
21. Governing Law. This Plan, Awards granted hereunder and
actions taken in connection with the Plan shall be governed by the laws of the
Commonwealth of Massachusetts regardless of the law that might otherwise apply
under applicable principles of conflicts of laws.
22. Effective Date. This Plan shall be effective as of April
12, 2000 which is the date as of which the Plan was adopted by the Board,
provided that the Plan is approved by the shareholders of the Company at the
2000 annual meeting of shareholders, and such approval of shareholders shall be
a condition to the right of each Participant to receive an Award hereunder.
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