Exhibit 2
2003 STOCK OPTION PLAN WITH FORM OF OPTION AGREEMENT
STANDARD CAPITAL CORPORATION
2004 STOCK OPTION PLAN
This 2004 Stock Option Plan ("Plan") provides for the grant of
options to acquire shares of common stock, .001 par value ("Common Stock") of
STANDARD CAPITAL CORPORATION, a Delaware corporation ("Company"). Stock options
granted under this Plan are referred to in this Plan as "Options." Options that
qualify under Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), are referred to in this Plan as "Incentive Stock Options." Options
granted under this Plan that do not qualify under Section 422 of the Code are
referred to as "Nonqualified Stock Options."
1.0 PURPOSES
1.1 The purposes of this Plan are (i) to retain the services of a
management team, qualified employees of the Company and non-employee advisors or
consultants as the Plan Administrators shall select in accordance with this
Plan; (ii) to retain the services of valued non-employee directors pursuant to
Section 5.15 below; (iii) to provide these persons with an opportunity to obtain
or increase a proprietary interest in the Company, to provide incentives for
effective service and high-level performance, to strengthen their incentive to
achieve the objectives of the shareholders of the Company; and (iv) to serve as
an aid and inducement in the hiring or recruitment of new employees,
consultants, non-employee directors and other persons needed for future
operations and growth of the Company. Employees, non-employee advisors and
consultants are referred to in this Plan as "Service Providers."
2.0 ADMINISTRATION
2.1 This Plan shall be administered by, or in accordance with the
recommendation of, the Board of Directors of the Company ("Board"). The Board
may, in its discretion, establish a committee composed of two or more members of
the Board to administer this Plan ("Committee") which may be an executive,
compensation or other committee, including a separate committee especially
created for this purpose. The Committee shall have the powers and authority as
the Board may delegate to it, including the power and authority to interpret any
provision of this Plan or of any Option. The members of the Committee shall
serve at the discretion of the Board. The Board, and/or the Committee if one has
been established by the Board, are referred to in this Plan as the "Plan
Administrators."
2.2 Following registration of any of the Company's securities under
Section 12 of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
the Plan Administrators shall not take any action which is not in full
compliance with the exemption from Section 16(b) of the Exchange Act provided by
Rule 16b-3, as amended, or any successor rule or rules, and any other rules or
regulations of the Securities and Exchange Commission, a national exchange, the
Nasdaq Stock Market, the NASD Bulletin Board, or any other applicable regulatory
authorities, and any such action shall be void and of no effect.
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2.3 Except as limited by Section 5.15 below, and subject to the
provisions of this Plan, and with a view to effecting its purpose, the Plan
Administrators shall have sole authority, in their absolute discretion, to (i)
construe and interpret this Plan; (ii) define the terms used in this Plan; (iii)
prescribe, amend and rescind rules and regulations relating to this Plan; (iv)
correct any defect, supply any omission or reconcile any inconsistency in this
Plan; (v) select the Service Providers to whom Options shall be granted under
this Plan and whether the Option is an Incentive Stock Option or a Nonqualified
Stock Option; (vi) determine the time or times at which Options shall be granted
under this Plan; (vii) determine the number of shares of Common Stock subject to
each Option, the exercise price of each Option, the duration of each Option and
the times at which each Option shall become exercisable; (viii) determine all
other terms and conditions of Options; (ix) approve the forms of agreement to be
used under the Plan; (x) to determine the "Fair Market Value", as defined in
Section 2.4 below; (xi) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by the Option shall have declined since the date the Option was granted; (xii)
to institute a program whereby outstanding options are surrendered in exchange
for options with a lower exercise price; (xiii) to provide financial assistance
to Optionees in the exercise of their outstanding options by allowing the
individuals to deliver a full-recourse, interest-bearing promissory note in
payment of the exercise price and any associated withholding taxes incurred in
connection with the exercise; (xiv) to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the shares of
Common Stock to be issued upon exercise of an Option that number of shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have shares withheld for this purpose shall be made in such form and
under such conditions as the Plan Administrators may deem necessary or
advisable; (xiv) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously granted by the
Plan Administrators; and (xv) make all other determinations necessary or
advisable for the administration of this Plan. All decisions, determinations and
interpretations made by the Plan Administrators shall be binding and conclusive
on all participants in this Plan and on their legal representatives, heirs and
beneficiaries. None of the Plan Administrators shall be liable for any action
taken or determination made in good faith with respect to the Plan or any grant.
2.4 "Fair Market Value" shall be deemed to be, as of any date, the
value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, or if the principal market for the Common
Stock is the over-the-counter market, including without limitation Nasdaq NMS or
Nasdaq Small Cap of the Nasdaq Stock Market, as the case may be, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day immediately preceding the date of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable. If
the principal market for the Common Stock is the NASD Electronic Bulletin Board
or other over-the-counter market other than Nasdaq NMS or Nasdaq Small Cap of
the Nasdaq Stock Market, its Fair Market Value shall be the mean between the
closing bid and asked quotations for the Common Stock for the 20 trading days
last preceding the date of conversion.
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(ii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
3.0 ELIGIBILITY
3.1 Incentive Stock Options may be granted to any individual who, at
the time the Option is granted, is an employee of the Company or any parent,
subsidiary or other corporation permitted by the Code, including employees who
are directors of the Company ("Employees"). Nonqualified Stock Options may be
granted to Service Providers as the Plan Administrators shall select, and to
non-employee directors of the Company pursuant to the formula set forth in
Section 5.15 below. Options may be granted in substitution for outstanding
Options of another corporation in connection with the merger, consolidation,
acquisition of property or stock or other reorganization between such other
corporation and the Company or any subsidiary of the Company. Options also may
be granted in exchange for outstanding Options. Any person to whom an Option is
granted under this Plan is referred to as an "Optionee."
4.0 NUMBER OF SHARES AVAILABLE
4.1 The Plan Administrators are authorized to grant Options to
acquire up to a total of Five Million (5,000,000) shares of the Company's
authorized but unissued, or reacquired, Common Stock. The number of shares with
respect to which Options may be granted hereunder is subject to adjustment as
set forth below in Section 5.14. If any outstanding Option expires or is
terminated for any reason, the shares of Common Stock allocable to the
unexercised portion of such Option may again be subject to an Option to the same
Optionee or to a different person eligible under this Plan.
5.0 TERMS AND CONDITIONS OF OPTIONS
5.1 Each Option granted under this Plan shall be evidenced by a
written agreement approved by the Plan Administrators ("Agreement"). Agreements
may contain such additional provisions, not inconsistent with this Plan, as the
Plan Administrators in their discretion may deem advisable. All Options also
shall comply with the following requirements.
5.2 Number of Shares and Type of Option. Each Agreement shall state
the number of shares of Common Stock to which it pertains and designate whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option. In the absence of action or designation to the contrary by the Plan
Administrators in connection with the grant of an Option, all Options shall be
Nonqualified Stock Options. The aggregate Fair Market Value, determined at the
Date of Grant, as defined below, of the stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during any
calendar year, granted under this Plan and all other Incentive Stock Option
plans of the Company, a related corporation or a predecessor corporation, shall
not exceed $100,000, or such other limit as may be prescribed by the Code as it
may be amended from time to time. Any Option which exceeds the annual limit
shall not be void but rather shall be a Nonqualified Stock Option.
5.3 Date of Grant. Each Agreement shall state the date the Plan
Administrators have deemed to be the effective date of the Option for purposes
of, and in accordance with, this Plan ("Date of Grant").
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5.4 Option Price. Each Agreement shall state the price per share of
Common Stock at which it is exercisable. The exercise price shall be fixed by
the Plan Administrators at whatever price the Plan Administrators may determine
in the exercise of its sole discretion; provided, that the per share exercise
price for any Option granted following the effective date of registration of any
of the Company's securities under the Exchange Act shall not be less than the
Fair Market Value per share of the Common Stock at the Date of Grant as
determined by the Plan Administrators in good faith; provided further, that with
respect to Incentive Stock Options granted to greater than 10 percent
shareholders of the Company, as determined with reference to Section 424(d) of
the Code, the exercise price per share shall not be less than 110 percent of the
Fair Market Value per share of the Common Stock at the Date of Grant; and,
provided further, that Incentive Stock Options granted in substitution for
outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization
involving such other corporation and the Company or any subsidiary of the
Company may be granted with an exercise price equal to the exercise price for
the substituted Option of the other corporation, subject to any adjustment
consistent with the terms of the transaction pursuant to which the substitution
is to occur.
5.5 Duration of Options. At the time of the grant of the Option, the
Plan Administrators shall designate, subject to paragraph 5.8 below, the
expiration date of the Option, which date shall not be later than 10 years from
the Date of Grant; provided, that the expiration date of any Incentive Stock
Option granted to a greater-than-10 percent shareholder of the Company (as
determined with reference to Section 424(d) of the Code) shall not be later than
five years from the Date of Grant. In the absence of action to the contrary by
the Plan Administrators in connection with the grant of a particular Option, and
except in the case of Incentive Stock Options as described above, all Options
granted under this Plan shall expire 10 years from the Date of Grant.
5.6 Vesting Schedule. No Option shall be exercisable until it has
vested. The vesting schedule for each Option shall be specified by the Plan
Administrators at the time of grant of the Option; provided, that if no vesting
schedule is specified at the time of grant or in the Agreement, the entire
Option shall vest according to the following schedule:
Number of Years Following Percentage of Total Options
Date of Plan to be exercisable
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1 .. . . . . . 25%
2 .. . . . . . 50%
3 .. . . . . . 75%
4 .. . . . . . 100%
5.7 Acceleration of Vesting. The vesting of one or more outstanding
Options may be accelerated by the Plan Administrators at such times and in such
amounts as it shall determine in its sole discretion. The vesting of Options
also shall be accelerated under the circumstances described below in Section
5.14.
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5.8 Term of Option.
5.8.1 Vested Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events: (i) the
expiration of the Option, as designated by the Plan Administrators; (ii) the
expiration of 30 days from the date of an Optionee's termination of employment,
contractual or director relationship with the Company or any Related Corporation
for any reason whatsoever other than death or Disability, as defined below,
unless, in the case of a Nonqualified Stock Option, the exercise period is
otherwise defined by terms of an agreement with Optionee entered into prior to
the effective date of the Plan, or the exercise period is extended by the Plan
Administrators until a date not later than the expiration date of the Option; or
(iii) the expiration of one year from (A) the date of death of the Optionee or
(B) cessation of an Optionee's employment, contractual or director relationship
with the Company or any Related Corporation by reason of Disability (as
defined below) unless, in the case of a Nonqualified Stock Option, the exercise
period is extended by the Plan Administrators until a date not later than
the expiration date of the Option. If an Optionee's employment, contractual or
director relationship with the Company or any Related Corporation is terminated
by death, any Option held by the Optionee shall be exercisable only by the
person or persons to whom such Optionee's rights under such Option shall pass by
the Optionee's will or by the laws of descent and distribution of the state or
county of the Optionee's domicile at the time of death. "Disability" shall mean
that a person is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to last for a
continuous period of not less than 12 months. The Plan Administrators shall
determine whether an Optionee has incurred a Disability on the basis of medical
evidence acceptable to the Plan Administrators. Upon making a determination of
Disability, the Committee shall, for purposes of the Plan, determine the date
of an Optionee's termination of employment, contractual or director
relationship.
5.8.2 Unless accelerated as set forth above, unvested Options shall
terminate immediately upon termination of Optionee's employment, contractual or
director relationship with the Company or any Related Corporation for any reason
whatsoever, including death or Disability. If, in the case of an Incentive Stock
Option, an Optionee's relationship with the Company changes (e.g., from an
employee to a non-employee, such as a consultant, or a non-employee director),
such change shall not necessarily constitute a termination of an Optionee's
contractual relationship with the Company but rather the Optionee's Incentive
Stock Option shall automatically be converted into a Nonqualified Stock Option.
For purposes of this Plan, transfer of employment between or among the Company
and/or any Related Corporation shall not be deemed to constitute a termination
of employment with the Company or any Related Corporation. For purposes of this
subsection with respect to Incentive Stock Options, employment shall be deemed
to continue while the Optionee is on military leave, sick leave or other bona
fide leave of absence as determined by the Plan Administrators. The foregoing
notwithstanding, employment shall not be deemed to continue beyond the first 90
days of such leave, unless the Optionee's re-employment rights are guaranteed by
statute or by contract.
5.8.3 Unvested Options shall terminate immediately upon any material
breach, as determined by the Plan Administrators, by Optionee of any employment,
non-competition, non-disclosure or similar agreement by and between the Company
and Optionee.
5.9 Exercise of Options. Options shall be exercisable, either all or
in part, at any time after vesting, until the Option terminates for any reason
set forth under this Plan, unless the exercise period is extended by the Plan
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Administrators until a date not later than the expiration date of the Option. If
less than all of the shares included in the vested portion of any Option are
purchased, the remainder may be purchased at any subsequent time prior to the
expiration of the Option term. No portion of any Option for less than ten
thousand (10,000) shares, as adjusted pursuant to Section 5.14 below, may be
exercised; provided, that if the vested portion of any Option is less than ten
thousand (10,000) shares, it may be exercised with respect to all shares for
which it is vested. Only whole shares may be issued pursuant to an Option, and
to the extent that an Option covers less than one share, it is unexercisable.
Options or portions thereof may be exercised by giving written notice to the
Company, which notice shall specify the number of shares to be purchased, and be
accompanied by payment in the amount of the aggregate exercise price for the
Common Stock so purchased, which payment shall be in the form specified in this
Plan. The Company shall not be obligated to issue, transfer or deliver a
certificate of Common Stock to any Optionee, or to his personal representative,
until the aggregate exercise price has been paid for all shares for which the
Option shall have been exercised and adequate provision has been made by the
Optionee for satisfaction of any tax withholding obligations associated with
such exercise. During the lifetime of an Optionee, Options are exercisable only
by the Optionee.
5.10 Payment upon Exercise of Option. Upon the exercise of any
Option, the aggregate exercise price shall be paid to the Company in cash or by
certified or cashier's check. In addition, upon approval of the Plan
Administrators, an Optionee may pay for all or any portion of the aggregate
exercise price by (i) delivering to the Company shares of Common Stock
previously held by Optionee which have been owned by Optionee for more than six
(6) months on the date of surrender; (ii) having shares withheld from the amount
of shares of Common Stock to be received by the Optionee; (iii) delivery of an
irrevocable subscription agreement obligating the Optionee to take and pay for
the shares of Common Stock to be purchased within eighteen months of the date of
exercise, to be accompanied by a full-recourse, interest-bearing promissory note
in payment of the exercise price and any associated withholding taxes incurred
in connection with the exercise; (iv) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan; (v) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement; or (vi)
such other consideration and method of payment for the issuance of shares to the
extent permitted by Applicable Laws. The shares of Common Stock received or
withheld by the Company as payment for shares of Common Stock purchased upon the
exercise of Options shall have a Fair Market Value at the date of exercise (as
determined by the Plan Administrators) equal to the aggregate exercise price (or
portion thereof) to be paid by the Optionee upon such exercise.
5.11 Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until such Optionee
becomes a record holder of the shares, irrespective of whether such Optionee has
given notice of exercise. Subject to the provisions of Section 5.14 of this
Plan, no rights shall accrue to an Optionee and no adjustments shall be made on
account of dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights declared on, or created in, the
Common Stock for which the record date is prior to the date the Optionee becomes
a record holder of the shares of Common Stock covered by the Option,
irrespective of whether such Optionee has given notice of exercise.
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5.12 Transfer of Option. Options granted under this Plan and the
rights and privileges conferred by this Plan may not be transferred, assigned,
pledged or hypothecated in any manner, whether by operation of law or otherwise,
other than by will or by applicable laws of descent and distribution or, with
respect to Nonqualified Stock Options, pursuant to a domestic relations order,
and shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
Option or of any right or privilege conferred by this Plan contrary to the
provisions hereof, or upon the sale, levy or any attachment or similar process
upon the rights and privileges conferred by this Plan, such Option shall
thereupon terminate and become null and void.
5.13 Securities Regulation and Tax Withholding.
5.13.1 Shares shall not be issued with respect to an Option unless
the exercise of such Option and the issuance and delivery of such shares shall
comply with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations thereunder and the requirements of any
stock exchange upon which such shares may then be listed. The issuance shall be
further subject to the approval of counsel for the Company with respect to such
compliance, including the availability of an exemption from registration for the
issuance and sale of such shares. The inability of the Company to obtain from
any regulatory body the authority deemed by the Company to be necessary for the
lawful issuance and sale of any shares under this Plan, or the unavailability of
an exemption from registration for the issuance and sale of any shares under
this Plan, shall relieve the Company of any liability with respect to the
non-issuance or sale of such shares.
5.13.2 As a condition to the exercise of an Option, in order to
comply with federal or state securities laws the Plan Administrators may require
the Optionee to represent and warrant in writing at the time of such exercise
that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Plan Administrators, a stop-transfer order against such shares may be placed on
the stock books and records of the Company, and a legend indicating that the
stock may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Plan
Administrators also may require such other documentation as may from time to
time be necessary to comply with federal and state securities laws. THE COMPANY
HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK
ISSUABLE UPON THE EXERCISE OF OPTIONS.
5.13.3 As a condition to the exercise of any Option granted under
this Plan, the Optionee shall make such arrangements as the Plan Administrators
may require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise. Alternatively, the
Plan Administrators may provide that a Grantee may elect, to the extent
permitted or required by law, to have the Company deduct federal, state and
local taxes of any kind required by law to be withheld upon such exercise from
any payment of any kind due to the Grantee. Without limitation, at the
discretion of the Plan Administrators, the withholding obligation may be
satisfied by the withholding or delivery of shares of Common Stock.
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5.13.4 The issuance, transfer or delivery of certificates of Common
Stock pursuant to the exercise of Options may be delayed, at the discretion of
the Plan Administrators, until the Plan Administrators are satisfied that the
applicable requirements of the federal and state securities laws and the
withholding provisions of the Code have been met.
5.14 Stock Dividend, Reorganization or Liquidation.
5.14.1 If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, the Plan Administrators shall, with respect to each outstanding Option,
proportionately adjust the number of shares of Common Stock and/or the exercise
price per share so as to preserve the rights of the Optionee substantially
proportionate to the rights of the Optionee prior to such event, and to the
extent that such action shall include an increase or decrease in the number of
shares of Common Stock subject to outstanding Options, the number of shares
available under Section 4.0 of this Plan shall automatically be increased or
decreased, as the case may be, proportionately, without further action on the
part of the Plan Administrators, the Company or the Company's shareholders.
5.14.2 If the Company is liquidated or dissolved, the Plan
Administrators shall allow the holders of any outstanding Options to exercise
all or any part of the unvested portion of the Options held by them; provided,
however, that such Options must be exercised prior to the effective date of such
liquidation or dissolution. If the Option holders do not exercise their Options
prior to such effective date, each outstanding Option shall terminate as of the
effective date of the liquidation or dissolution.
5.14.3 The foregoing adjustments in the shares subject to Options
shall be made by the Plan Administrators, or by any successor administrator of
this Plan, or by the applicable terms of any assumption or substitution
document.
5.14.4 The grant of an Option shall not affect in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure, to merge, consolidate or
dissolve, to liquidate or to sell or transfer all or any part of its business or
assets.
5.15 Option Grants to Non-Employee Directors.
5.15.1 Automatic Grants. Upon the initial appointment of a
Non-Employee Director, as defined below, the Plan Administrators are authorized
to grant initial Options ("Initial Options") to each Non-Employee Director in
such amounts and upon such terms, provisions and vesting schedule as determined
in the sole discretion of the Plan Administrators. After the Initial Options are
fully vested, or in the event no Initial Options are granted to a Non-Employee
Director, Options shall be granted to Non-Employee Directors under the terms and
conditions of this Section 5.15 of this Plan. Unless the number of shares
available under Section 4.0 of this Plan shall have been decreased to less than
50,000, immediately after each annual meeting of shareholders at which he or she
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is elected a director, each Non-Employee Director, as defined below, of the
Company shall automatically be granted a Nonqualified Stock Option to purchase
15,000 shares of Common Stock for each year included in the term for which such
he or she was elected a director at such meeting; provided, however, that if a
director is appointed to fill a vacancy in the Company's Board of Directors, a
Non-Employee Director shall be granted a Nonqualified Stock Option to purchase
that number of shares of Common Stock equal to 15,000 multiplied by a fraction,
the numerator of which shall be equal to the number of months from the date of
his or her appointment until the next regularly scheduled annual meeting of
shareholders at which directors are to be elected (as determined by the
Company's bylaws and rounded to the nearest whole number) and the denominator of
which shall be twelve (12). "Non-Employee Director" shall have the meaning set
forth in Rule 16b-3 under the Exchange Act as such rule is in effect on the date
this Plan is approved by the shareholders of the Company, as it may be amended
from time to time, or any successor rule or rules.
5.15.2 Option Price. The option price for the Options granted under
Section 5.15 shall be not less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock on the Date of Grant, as determined
by the Plan Administrators in good faith in accordance with the definition set
forth in Section 2.4 of this Plan. Each such Option shall have a four-year term
from the Date of Grant, unless earlier terminated pursuant to Section 5.8.
5.15.3 Vesting Schedule. No Option shall be exercisable by a
Non-Employee Director until it has vested. For Options granted in connection
with the election of a director at an annual meeting of shareholders, each
Option shall vest as to 15,000 shares of Common Stock for each year of service
as a director on each anniversary date of the annual meeting. For Options
granted in connection with the appointment of a director, each Option shall vest
as to 15,000 shares of Common Stock for each year of service as a director on
each anniversary date of such appointment.
5.16 Common Stock Repurchase Rights
5.16.1 Repurchase Option. At the sole discretion of the Plan
Administrators, each Option granted under this Plan may contain repurchase
provisions pursuant to which, after exercise of the Option, the Company is
granted an irrevocable, exclusive option ("Repurchase Option") to purchase from
Optionee the Common Stock issued upon exercise of the Option. If the Plan
Administrators determine that Options granted under the Plan will be subject to
a Repurchase Option, Service Providers shall be notified by the Plan
Administrators of the terms, conditions and restrictions of the Repurchase
Option by means of a Restricted Stock Purchase Agreement, and Options shall be
accepted by Service Providers by execution of a Restricted Stock Purchase
Agreement in the form determined by the Plan Administrators. Unless the Plan
Administrators determine otherwise, the Restricted Stock Purchase Agreement
shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for any
reason (including death or disability).
5.16.2 Purchase Price and Duration. The purchase price for shares of
Common Stock repurchased pursuant to the Restricted Stock Purchase Agreement
shall be the original price per share paid by the purchaser, plus an amount
equal to any federal or state income tax liability incurred by purchaser upon
exercise of a Nonqualified Stock Option. The purchase price may be paid by
cancellation of any indebtedness of the purchaser to the Company. The Repurchase
Option shall lapse after one year following the date of exercise, unless the
repurchase period is shortened in accordance with a schedule determined by the
Plan Administrators.
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5.16.3 Escrow of Shares. The Restricted Stock Purchase Agreement may
also provide that the shares of Common Stock be delivered and deposited with an
escrow holder designated by the Company until such time as the Repurchase Option
expires.
5.16.4 Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
5.16.5 Rights as a Shareholder. Once the Option is exercised and
unless and until the Repurchase Option is exercised by the Company, the
purchaser shall have the rights equivalent to those of a shareholder, and shall
be a shareholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company.
5.17 Common Stock Resale Restrictions
5.17.1 Resale Restrictions. At the sole discretion of the Plan
Administrators, each Option granted under this Plan may contain resale
provisions pursuant to which, after exercise of the Option, the purchaser of the
Common Stock issued upon exercise of the Option shall be limited to sales of
Common Stock sold for the account of the purchaser or an affiliate of the
purchaser in an amount which shall not exceed 250,000 shares of Common Stock
during any three-month period.
5.17.2 Duration. The Resale Restriction may continue for as long as
the purchaser beneficially owns the Common Stock issued upon exercise of the
Option, unless the Resale Restriction is shortened in accordance with a schedule
determined by the Plan Administrators.
6.0 EFFECTIVE DATE; TERM
6.1 This Plan shall be effective as of February 20, 2004. The Plan
shall include all options granted by Plan Administrators prior to the effective
date of the Plan, in accordance with the effective Date of Grant and other terms
of each agreement with Optionee. Incentive Stock Options may be granted by the
Plan Administrators from time to time thereafter until February 20, 2009.
Nonqualified Stock Options may be granted until this Plan is terminated by the
Board in its sole discretion. Termination of this Plan shall not terminate any
Option granted prior to such termination. Any Incentive Stock Options granted by
the Plan Administrators prior to the approval of this Plan by a majority of the
shareholders of the Company shall be granted subject to ratification of this
Plan by the shareholders of the Company within 12 months after this Plan is
adopted by the Board, and if shareholder ratification is not obtained, each and
every Incentive Stock Option shall become a Nonqualified Stock Option.
7.0 NO OBLIGATIONS TO EXERCISE OPTION
7.1 The grant of an Option shall impose no obligation upon the
Optionee to exercise such Option.
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8.0 NO RIGHT TO OPTIONS OR TO EMPLOYMENT, CONTRACTUAL OR DIRECTOR
RELATIONSHIP
8.1 Except as provided in Section 5.15 above, whether or not any
Options are to be granted under this Plan shall be exclusively within the
discretion of the Plan Administrators, and nothing contained in this Plan shall
be construed as giving any person or Service Provider any right to participate
under this Plan. The grant of an Option shall in no way constitute any form of
agreement or understanding binding on the Company or any Related Corporation,
express or implied, that the Company or any Related Corporation will employ,
contract with, or use any efforts to cause to continue service as a director by,
an Optionee for any length of time.
9.0 APPLICATION OF FUNDS
9.1 The proceeds received by the Company from the sale of Common
Stock issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.
10.0 INDEMNIFICATION OF PLAN ADMINISTRATOR
10.1 In addition to all other rights of indemnification they may have
as members of the Board, members of the Plan Administrators shall be indemnified
by the Company for all reasonable expenses and liabilities of any type or
nature, including attorneys' fees, incurred in connection with any action, suit
or proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof, provided that such settlement is
approved by independent legal counsel selected by the Company, except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrators member is liable for willful misconduct; provided, that
within 15 days after the institution of any such action, suit or proceeding, the
Plan Administrator member involved therein shall, in writing, notify the Company
of such action, suit or proceeding, so that the Company may have the opportunity
to make appropriate arrangements to prosecute or defend the same.
11.0 AMENDMENT OF PLAN
11.1 Except as otherwise provided above in Section 5.15, the Plan
Administrators may, at any time, modify, amend or terminate this Plan and
Options granted under this Plan; provided, that no amendment with respect to an
outstanding Option shall be made over the objection of the Optionee thereof; and
provided further, that if required in order to keep the Plan in full compliance
with the exemption from Section 16(b) of the Exchange Act provided by Rule
16b-3, as amended, or any successor rule or rules, or any other rules or
regulations of the Securities and Exchange Commission, a national exchange, the
Nasdaq Stock Market, the NASD Bulletin Board, or other regulatory authorities,
amendments to this Plan shall be subject to approval by the Company's
shareholders in compliance with the requirements of any such rules or
regulations.
Without limiting the generality of the foregoing, the Plan
Administrators may modify grants to persons who are eligible to receive Options
under this Plan who are foreign nationals or employed outside the United States
to recognize differences in local law, tax policy or custom.
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Date Approved by Board of Directors of Company: , 2004
STANDARD CAPITAL CORPORATION
By:
Secretary Treasurer
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STANDARD CAPITAL CORPORATION
STOCK OPTION AGREEMENT
NEITHER THIS OPTION NOR THE UNDERLYING SHARES OF COMMON STOCK HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"). THIS
OPTION OR THE UNDERLYING COMMON SHARES MAY NOT BE SOLD OR TRANSFERRED UNLESS:
(i) THERE IS AN EFFECTIVE REGISTRATION COVERING THE OPTION OR SHARES, AS THE
CASE MAY BE, UNDER THE SECURITIES ACT AND APPLICABLE STATES SECURITIES LAWS;
(ii) THE COMPANY FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE
BOARD OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY
THE PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATES SECURITIES LAWS; OR, (iii) THE TRANSFER IS MADE PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT.
BETWEEN:
("Optionee")
AND
STANDARD CAPITAL CORPORATION ("Company")
(A Delaware corporation)
1.0 RECITALS
1.1 The Company has adopted the 1998 Stock Option Plan ("Plan"),
incorporated herein by reference, that provides for the grant of options to
purchase shares of Common Stock ("Shares") of the Company. Unless otherwise
defined in this Agreement, the terms defined in the Plan shall have the same
defined meanings in this Agreement.
2.0 NOTICE OF GRANT
2.1 Optionee has been granted an option to purchase Shares of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
GRANT NUMBER:
DATE OF GRANT:
VESTING COMMENCEMENT DATE:
EXERCISE PRICE PER SHARE:
TOTAL NUMBER OF SHARES GRANTED:
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TOTAL EXERCISE PRICE: $
TYPE OF OPTION: Incentive Stock Option
Nonqualified Stock Option
EXPIRATION DATE:
VESTING SCHEDULE: This Option may be exercised, in whole or in part,
in accordance with the following schedule: 25% of the Shares subject to the
Option shall immediately vest and be exercisable after two (2) years following
the date of grant, 50% of the Shares subject to the Option shall be fully vested
and be exercisable after three (3) years following the date of grant, 75% of the
Shares subject to the Option shall be fully vested and be exercisable after four
(4) years following the date of grant, and 100% of the Shares subject to the
Option shall be fully vested and be exercisable after five (5) years following
the date of grant.
TERMINATION PERIOD: This Option may be exercised for 30 days after
Optionee ceases to be a Service Provider. Upon the death or Disability of the
Optionee, this Option may be exercised for such longer period as provided in the
Plan. In no event shall this Option be exercised later than the Expiration Date
as provided above.
3.0 GRANT OF OPTION
3.1 Subject to the terms and conditions of the Plan and of this
Agreement, the Plan Administrators of the Company grant to the Optionee named
above an option ("Option") to purchase the number of Shares, as set forth above
in Section 2.0 entitled "Notice of Grant", at the exercise price per share set
forth above in Notice of Grant ("Exercise Price"). Subject to any mutual
amendments of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Agreement, the terms
and conditions of the Plan shall prevail.
3.2 If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonqualified Stock Option ("NQO").
4.0 EXERCISE OF OPTION
4.1 Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set forth above in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement.
4.2 Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A ("Exercise Notice"), which
shall state the election to exercise the Option, the number of Shares in respect
of which the Option is being exercised ("Exercised Shares"), and such other
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representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be completed by the Optionee
and delivered to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of the fully
executed Exercise Notice accompanied by the aggregate Exercise Price.
5.0 COMPLIANCE WITH APPLICABLE LAW
5.1 No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with applicable state or federal law,
including securities laws, corporate laws, the Code or any stock exchange or
quotation system. If the Plan Administrators at any time determine that
registration or qualification of the Shares or the Option under state or federal
law, or the consent approval of any governmental regulatory body is necessary or
desirable, then the Option may not be exercised, in whole or in part, until such
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Plan Administrators.
Assuming compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.
5.2 If required by the Company at the time of any exercise of the
Option in order to comply with federal or state securities laws, as a condition
to such exercise, the Employee shall enter into an agreement with the Company in
form satisfactory to counsel for the Company by which the Employee: (i) shall
represent that the Shares are being acquired for the Employee's own account for
investment and not with a view to, or for sale in connection with, any resale or
distribution of such Shares; and, (ii) shall agree that if the Employee should
decide to sell, transfer, or otherwise dispose of any such Shares, the Employee
may do so only if the Shares are registered under the Securities Act and the
relevant state securities law, unless, in the opinion of counsel for the
Company, such registration is not required, or the transfer is pursuant to the
Securities and Exchange Commission Rule 144.
6.0 METHOD OF PAYMENT
6.1 Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) certified or cashier's check;
(c) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(d) with the Plan Administrator's consent, surrender of other Shares
which (i) in the case of Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate
Exercise Price of the Exercised Shares; or
(e) with the Plan Administrator's consent, delivery of Optionee's
promissory note (the "Note") in the form approved by Plan Administrators, in the
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amount of the aggregate Exercise Price of the Exercised Shares and any
associated withholding taxes incurred in connection with the exercise, together
with the execution and delivery by the Optionee of a Security Agreement in the
form approved by Plan Administrators. The Note shall bear interest at the
"applicable federal rate" prescribed under the Code and its regulations at time
of purchase, and shall be secured by a pledge of the Shares purchased by the
Note pursuant to the Security Agreement.
7.0 NON-TRANSFERABILITY OF OPTION
7.1 This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be exercised during
the lifetime of Optionee only by the Optionee. The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.
8.0 TERM OF OPTION
8.1 This Option may be exercised only within the term set forth above
in the Notice of Grant, and may be exercised during that term only in accordance
with the Plan and the terms of this Option Agreement.
9.0 TAX CONSEQUENCES
Some of the federal tax consequences relating to this Option, as of
the date of this Option, are set forth below. THIS SUMMARY IS INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
9.1 Exercising the Option.
9.1.1 Nonqualified Stock Option. The Optionee may incur regular
federal income tax liability upon exercise of a NQO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if these withholding amounts are not
delivered at the time of exercise.
9.1.2 Incentive Stock Option. If this Option qualifies as an ISO, the
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price will be treated as an
adjustment to alternative minimum taxable income for federal tax purposes and
may subject the Optionee to alternative minimum tax in the year of exercise. In
the event that the Optionee ceases to be an Employee but remains a Service
Provider, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonqualified Stock Option on the date three (3) months and one (1)
day following this change of status.
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9.2 Disposition of Shares.
9.2.1 NQO. If the Optionee holds NQO Shares for at least one year,
except for that portion treated as compensation income at the time of exercise,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes.
9.2.2 ISO. If the Optionee holds ISO Shares for at least one year
after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (i) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (ii) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.
9.3 Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of the disposition. The Optionee agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the
current earnings paid to the Optionee.
10.0 RESALE RESTRICTIONS
10.1 Optionee acknowledges and agrees that Optionee, together with
Optionee's affiliates and donees, will not sell or otherwise transfer or dispose
of Shares of the Company issued upon exercise of this Option in an amount which
shall exceed 250,000 Shares during any three-month period. Shares, which are
bona fide, pledged, when sold by the pledgee, or by a purchaser, after a default
in the obligation secured by the pledge shall be deemed to be excluded from this
limitation.
10.2 Optionee acknowledges and agrees that whatever period determined
appropriate by the Company, underwriter, or federal and state regulatory
officials including, but not limited to, the Securities and Exchange Commission,
National Association of Securities Dealers and NASDAQ, following the effective
date of a registration statement of the Company covering common stock (or other
securities) of the Company to be sold on its behalf in an underwriting, Optionee
will not sell or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) Shares of the Company held by Optionee at any time
during such period except securities included in that registration.
10.3 Optionee acknowledges and agrees that if for purposes of a
registration statement of the Company the underwriter or federal or state
regulatory officials fix a specific Common Stock or Option lockup period, such
fixed lockup period shall apply to Optionee under this Agreement.
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11.0 NO GUARANTEE OF CONTINUED SERVICE
11.1 Optionee acknowledges and agrees that the vesting of shares
pursuant to the vesting schedule set forth in this Agreement is earned only by
continuing as a Service Provider at the will of the Company, and not through the
act of being hired, being granted an option or purchasing shares under this
Agreement. Optionee further acknowledges and agrees that this Agreement, the
transactions contemplated and the vesting schedule set forth in it do not
constitute an express or implied promise of continued engagement as a Service
Provider for the vesting period, for any period, or at all, and shall not
interfere with Optionee's right or the Company's right to terminate Optionee's
relationship as a Service Provider at any time, with or without cause.
12.0 SIGNATURES
Dated: ,200_
STANDARD CAPITAL CORPORATION
By:
Del Thachuk, Chief Executive Officer and President
Optionee acknowledges and represents that he or she has received a copy of the
Plan, has reviewed the Plan and this Agreement in their entirety, is familiar
with its and fully understands its terms and provisions. Optionee accepts this
Option subject to all the terms and provisions of the Plan and this Agreement.
Optionee has had an opportunity to obtain the advice of counsel prior to
executing this Agreement. Optionee agrees to accept as binding, conclusive and
final all decisions or interpretations of the Plan Administrators upon any
questions arising under the Plan and Agreement. Optionee further agrees to
notify the Company upon any change in the residence address indicated on the
first page of this Agreement.
Dated: ,200_
OPTIONEE:
(Signature)
(Print Name)
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and approves the terms
and conditions of the Plan and this Agreement. In consideration of the Company's
granting his or her spouse the right to purchase Shares as set forth in the Plan
and this Agreement, the undersigned agrees to be irrevocably bound by the terms
and conditions of the Plan and this Option Agreement and further agrees that any
community property interest shall be similarly bound. The undersigned hereby
appoints the undersigned's spouse as attorney-in-fact for the undersigned with
respect to any amendment or exercise of rights under the Plan or this Agreement.
(Signature of Spouse of Optionee)
(Print Name)
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EXHIBIT A
2004 STOCK PLAN
EXERCISE NOTICE
TO: STANDARD CAPITAL CORPORATION.
Attention: Secretary Treasurer
Effective as of today, ________________, 200-, the undersigned
("Purchaser") hereby elects to purchase ______________ shares ("Shares") of the
Common Stock of Standard Capital Corporation.("Company") pursuant to the 2004
Stock Option Plan ("Plan") and the Stock Option Agreement dated _ _________,
200_ ("Agreement"). Purchaser herewith delivers to the Company the full purchase
price for the Shares of $_____________, as required by the Agreement.
2.0 Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Agreement and
agrees to abide by and be bound by their terms and conditions.
3.0 Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date of issuance, except as provided in the Plan.
4.0 Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
Submitted by: Accepted by:
PURCHASER: STANDARD CAPITAL CORPORATION
(Signature) By:
(Print Name) Position
Address: Address:
34-3387 King George Highway
Surrey, British Columbia
Canada, V4P 1B7
Date Received: , 200_