SAFESCIENCE, INC.
1998 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purposes of this SafeScience, Inc. 1998 Stock Option Plan (the
"Plan") are to encourage employees, directors and consultants of SafeScience,
Inc., a Nevada corporation (together with any successor thereto, the "Company"),
or any present or future Subsidiary Corporation (as defined below) of the
Company to acquire a proprietary interest in the growth and performance of the
Company, to generate an increased incentive to contribute to the Company's
future success an prosperity, thus enhancing the value of the Company for the
benefit of its stockholders, and to enhance the ability of the Company to
attract and retain qualified individuals upon whom, in large measure, the
sustained progress, growth and profitability of the Company depend.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(c) "Committee" shall mean a committee of the Board designated by the
Board to administer the Plan and composed of not less than two (2) directors;
or, if no such committee shall have been designated, the Board.
(d) "Consultant" shall mean an independent contractor who renders
technical, business, professional or other consulting services to the Company.
(e) "Fair Market Value" shall mean, with respect to Shares or other
securities, the fair market value of the Shares or other securities determined
by such methods or procedures as shall be established from time to time by the
Committee in good faith or in accordance with applicable law. Unless otherwise
determined by the Committee, the Fair Market Value of Shares shall mean (i) the
closing price per Common Share on the principal exchange on which the Shares are
then trading, if any, on such date, or, if the Shares were not traded on such
date, then on the next preceding trading day during which a sale occurred; or
(ii) if the Shares are not traded on an exchange but are quoted on the NASDAQ
Stock Market or a successor quotation system, (1) the last sales price (if the
Shares are then listed as a National Market Issue on the NASDAQ Stock Market) or
(2) the mean between the closing representative bid and asked prices (in all
other cases) for the Shares on such date as reported by the NASDAQ Stock Market
or such successor quotation system; or (iii) if the Shares are not publicly
traded on an exchange and not quoted on the NASDAQ Stock Market or a successor
quotation system, the mean between the closing bid and asked prices for the
Shares on such date as determined in good faith by the Committee.
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(f) "Incentive Stock Option" shall mean an option granted under the
Plan that is designated as an incentive stock option within the meaning of
Section 422 of the Code or any successor provision thereto.
(g) "Independent Director" shall mean each member of the Board who is
not an Employee of the Company or any Subsidiary Corporation of the Company.
(h) "Employee" shall mean any officer, director or other employee who
is a regular full-time or part-time employee of the Company or its present and
future Subsidiary Corporations.
(i) "Non-Qualified Stock Option" shall mean an Option granted under the
Plan that is not designated as an Incentive Stock Option.
(j) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(k) "Option Agreement" shall mean a written agreement, contract or
other instrument or document evidencing an Option granted under the Plan.
(l) "Participant" shall mean a Employee, Independent Director or
Consultant who has been granted an option under the Plan.
(m) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.
(n) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation thereto.
(o) "Shares" shall mean shares of Common Stock of the Company, $.01 par
value, and such other securities or property as may become the subject of
Options pursuant to an adjustment made under Section 4(b) of the Plan.
(p) "Subsidiary Corporation" shall have the meaning ascribed thereto in
Code Section 424(f).
(q) "Ten Percent Stockholder" shall mean a Person, who together with
his or her spouse, children and trusts and custodial accounts for their benefit,
immediately at the time of the grant of an Option and assuming its immediate
exercise, would beneficially own, within the meaning of Section 424(d) of the
Code, Shares possessing more than ten percent (10%) of the total combined voting
power of all of the outstanding capital stock of the Company or any Subsidiary
Corporation of the Company.
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SECTION 3. ADMINISTRATION
(a) Generally. The Plan shall be administered by the Committee. Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Option shall be within the sole discretion of the Committee, may be made at any
time, and shall be final, conclusive, and binding upon all Persons, including
the Company, any Participant, any holder or beneficiary of any Option, any
stockholder of the Company and any Employee of the Company.
(b) Powers. Subject to the terms of the Plan and applicable law and
except as provided in Section 7 hereof, the Committee shall have full power and
authority: (i) to designate Participants; (ii) to determine the type or types of
Options to be granted to each Participant under the Plan; (iii) to determine the
number of Shares to be covered by Options; (iv) to determine the terms and
conditions of any Option; (v) to determine whether, to what extent, and under
what circumstances Options may be settled or exercised in cash, Shares, other
Options, or other property, or canceled, forfeited, or suspended, and the method
or methods by which Options may be settled, exercised, canceled, forfeited, or
suspended; (vi) to interpret and administer the Plan and any instruments or
agreements relating to, or Options granted under, the Plan; (vii) to establish,
amend, suspend, or waive such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan; and (viii)
to make any other determination and take any other action that the Committee
deems necessary or desirable for the administration of the Plan.
SECTION 4. SHARES AVAILABLE FOR OPTIONS
(a) Shares Available. Subject to adjustment as provided in Section
4(b):
(i) Limitation on Number of Shares. Options issuable under the
Plan are limited such that the maximum aggregate number of Shares which may be
issued pursuant to, or by reason of, Options is 600,000. Further, no Participant
shall be granted Options to purchase more than 200,000 Shares in any one fiscal
year; provided, however, that the Committee may adopt procedures for the
counting of Shares relating to any grant of Options to ensure appropriate
counting, avoid double counting, and provide for adjustments in any case in
which the number of Shares actually distributed differs from the number of
Shares previously counted in connection with such grant; provided further,
however, that the options granted under the Company's 1996 Nonqualified Stock
Option Plan shall not be treated as outstanding. To the extent that an Option
granted a Participant ceases to remain outstanding by reason of termination of
rights granted thereunder, forfeiture or otherwise, the Shares subject to such
Option shall again become available for award under the Plan.
(ii) Sources of Shares Deliverable Under Options. Any Shares
delivered pursuant to an Option may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.
(iii) Adjustments. In the event that the Committee shall
determine that any change in corporate capitalization, such as a dividend or
other distribution of Shares, or a corporate transaction, such as a merger,
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consolidation, reorganization or partial or complete liquidation of the Company
or other similar corporate transaction or event, affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem necessary to prevent dilution or enlargement of the benefits or
potential benefits intended to be made under the Plan, adjust any or all of (x)
the number and type of Shares which thereafter may be made the subject of
Options, (y) the number and type of Shares subject to outstanding Options, and
(z) the grant, purchase, or exercise price with respect to any Option or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Option; provided, however, in each case, that (i) with respect to
Incentive Stock Options no such adjustment shall be authorized to the extent
that such adjustment would cause the Plan to violate Section 422 of the Code or
any successor provision thereto, (ii) such adjustment shall be made in such
manner as not to adversely affect the status of any Option as "performance-based
compensation" under Section 162(m) of the Code; and (iii) the number of Shares
subject to any Option denominated in Shares shall always be a whole number.
SECTION 5. ELIGIBILITY
In determining the Participants to whom Options shall be granted and
the number of Shares to be covered by each Option, the Committee shall take into
account the nature of the Person's duties, such Person's present and potential
contributions to the success of the Company and such other factors as it shall
deem relevant in connection with accomplishing the purposes of the Plan. A
Participant who has been granted an Option or Options under the Plan may be
granted an additional Option or Options, subject to such limitations as may be
imposed by the Code on the grant of Incentive Stock Options. Notwithstanding
anything herein to the contrary, Incentive Stock Options may be granted only to
Employees of the Company or any Parent Corporation or Subsidiary Corporation.
SECTION 6. OPTIONS
The Committee is hereby authorized to grant Options to Participants
upon the following terms and the conditions (except to the extent otherwise
provided in Section 7) and with such additional terms and conditions, in either
case not inconsistent with the provisions of the Plan, as the Committee shall
determine:
(a) Exercise Price. The exercise price per Share purchasable under
Options shall be determined by the Committee at the time the Option is granted
but generally shall not be less than the Fair Market Value of the Shares covered
thereby at the time the Option is granted.
(b) Option Term. The term of each Option shall be fixed by the
Committee but generally shall not exceed ten (10) years from the date of grant.
(c) Time and Method of Exercise. The Committee shall determine the time
or times at which the right to exercise an Option may vest, and the method or
methods by which, and the form or forms in which, payment of the option price
with respect to exercises of such Option may be made or deemed to have been made
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(including, without limitation, (i) cash, Shares, outstanding Options or other
consideration, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant option price and (ii) a broker-assisted
cashless exercise program established by the Committee), provided in each case
that such methods avoid "short-swing" profits to the Participant under Section
16(b) of the Securities Exchange Act of 1934, as amended. The payment of the
exercise price of an Option may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance with rules and
procedures established by the Committee.
(d) Incentive Stock Options. All terms of any Incentive Stock Option
granted under the Plan shall comely in all respects with the provisions of
Section 422 of the Code, or any successor provision thereto, and any regulations
promulgated thereunder including that, (i)(A) in the case of a grant to a
Participant that is not a Ten Percent Stockholder the purchase price per Share
purchasable under Incentive Stock Options shall not be less than the Fair Market
Value of a Share on the date of grant and (B) in the case of a grant to a Ten
Percent Stockholder the purchase price per Share purchasable under Incentive
Stock Options shall not be less than 110% of the Fair Market Value of a Share on
the date of grant and (ii) the term of each Incentive Stock Option shall be
fixed by the Committee but shall in no event be more than ten (10) years from
the date of grant, or in the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, five (5) years from the date of grant.
(e) Limits on Transfer of Options. Subject to Code Section 422, no
Option and no right under any such Option, shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or by the laws
of descent and distribution, and such Option, and each right under any such
Option, shall be exercisable during the Participant's lifetime, only by the
Participant or, if permissible under applicable law (including Code Section 422,
in the case of an Incentive Stock Option), by the Participant's guardian or
legal representative. No Option and no right under any such Option, may be
pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable
against the Company. Notwithstanding the foregoing, the Committee may, in its
discretion, provide that Non-Qualified Stock Options be transferable, without
consideration, to immediate family members (i.e., children, grandchildren or
spouse), to trusts for the benefit of such immediate family members and to
partnerships in which such family members are the only partners. The Committee
may attach to such transferability feature such terms and conditions as it deems
advisable. In addition, a Participant may, in the manner established by the
Committee, designate a beneficiary (which may be a person or a trust) to
exercise the rights of the Participant, and to receive any distribution, with
respect to any Option upon the death or disability of the Participant. A
beneficiary, guardian, legal representative or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Option Agreement applicable to such Participant,
except as otherwise determined by the Committee, and to any additional
restrictions deemed necessary or appropriate by the Committee.
(f) Tax Withholding. The Company or any Subsidiary is authorized to
withhold from any Option granted any payment relating to an Option under the
Plan, including from the exercise of an Option, amounts of withholding and other
taxes due in connection with any transaction involving an Option, and to take
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such other action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of with holding taxes and
other tax obligations relating to any Option. This authority shall include
authority to withhold or receive Shares or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations.
(g) Loan Provisions. With the consent of the Committee, and subject at
all times to laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee, or arrange for a
loan or loans to a Participant with respect to the exercise of any Option,
including the payment by a Participant of any or all federal, state, or local
income or other taxes due in connection with the exercise of any Option. Subject
to such limitations, the Committee shall have full authority to decide whether
to make a loan or loans hereunder and to deter mine the amount, terms, and
provisions of any such loan or loans, including the interest rate to be charged
in respect of any such loan or loans, whether the loan or loans are to be with
or without recourse against the borrower, the terms on which the loan is to be
repaid and the conditions, if any, under which the loan or loans may be
forgiven.
SECTION 7. AMENDMENT AND TERMINATION
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option Agreement or in the Plan:
(a) Amendments to the Plan. The Plan may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time
by the Board, but no amendment without the approval of the stock holders of the
Company shall be made if such amendment would be required under Sections 162(m)
or 422 of the Code, Rule 16b-3 or any other law or rule of any governmental
authority, stock exchange or other self-regulatory organization to which the
Company may then be subject. Neither the amendment, suspension nor termination
of the Plan shall, without the consent of the holder of such Option, alter or
impair any rights or obligations under any Option theretofore granted.
(b) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
SECTION 8. GENERAL PROVISIONS
(a) No Rights to Awards. No Participant shall have any claim to be
granted any Option under the Plan, and there is no obligation for uniformity of
treatment of Participants or holders or beneficiaries of Options under the Plan.
The terms and conditions of Options need not be the same with respect to each
recipient.
(b) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or to serve as an Independent Director of or Consultant to the Company.
Further, the Company may at any time dismiss a Participant from employment, or
as an Independent Director or Consultant, as the case may be, free from any
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liability, or any claim under the Plan, unless otherwise expressly provide in
the Plan or in any Option Agreement.
(c) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating t the Plan shall be determined in
accordance with the laws of the State of Nevada and applicable Federal law.
(d) Severability. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, unenforceable in any jurisdiction,
or would disqualify the Plan or any Option under any law deemed applicable by
the Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, such
provision shall be deemed void, stricken and the remainder of the Plan and any
such Option shall remain in full force and effect.
(e) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lie of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or other wise eliminated.
(f) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision hereof.
SECTION 9. EFFECTIVE DATE OF THE PLAN
The Plan is effective as of December 1, 1998, subject to stockholder
approval of the Plan on or prior to such date.
SECTION 10. TERM OF THE PLAN
The Plan shall continue until the earlier of (i) the date on which all
Options issuable hereunder have been issued, (ii) the termination of the Plan by
the Board or (iii) December 1, 2008. However, unless otherwise expressly
provided in the Plan or in an applicable Option Agreement, any Option
theretofore granted may extend beyond such date and the authority of the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such
Option or to waive any conditions or rights under any such Option, and the
authority of the Board to amend the Plan, shall extend beyond such date.
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