TEN STIX INC.
2004 EMPLOYEE STOCK INCENTIVE PLAN NO. 2
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1. Definitions.
As used herein,
the following words or terms have the meanings as set forth
below.
1.1 "Award"
means any Option, Warrant, Registered or Restricted Stock,
Registered or Restricted Stock Unit, or any
combination thereof.
1.2 "Board of
Directors" means the Board of Directors of the Company.
1.3 "Code" means
the U.S. Internal Revenue Code of 1986, as from time to
time amended and in effect, or any
successor statute as from time to time in
effect.
1.4 "Committee"
means the Committee appointed by the Board of Directors to
administer the Plan or the Board of
Directors as a whole if no appointment is
made, provided that, if any member of the
Committee does not qualify as both an
outside director for purposes of Section
162(m) of the Code and a non-employee
director for purposes of Rule 16b-3 of the
Securities Exchange Act of 1934, as
amended, the remaining members of the
Committee (but not less than two members)
shall be constituted as a subcommittee of
the Committee to act as the Committee
for purposes of granting or approving the
payment of any Awards.
1.5 "Common
Stock" means the common stock, par value $0.001 per share, of
the Company.
1.6 "Company"
means Ten Stix Inc., a corporation established under the laws
of the State of Nevada.
1.7 "Fair Market
Value" in the case of a share of Common Stock on a
particular date, means the fair market
value as determined from time to time by
the Board of Directors or, where
appropriate, by the Committee, taking into
account all information which the Board of
Directors, or the Committee,
considers relevant.
1.8 "Incentive
Stock Option" means an Option intended to be an "incentive
stock option" within the meaning of Section
422 of the Code.
1.9
"Nonqualified Stock Option" means a stock option not intended
to
qualify as either a Qualified Stock Option
or an Incentive Stock Option as those
terms are defined by applicable provisions
of the code.
1.10 "Option"
means a stock option entitling the holder to acquire shares
of Common Stock upon payment of the
exercise price.
1.11
"Participant" means a person who is granted an Award under the
Plan.
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1.12
"Performance Award" means an Award granted by the Committee
pursuant
to Section 6.11.
1.13
"Performance Criteria" means any or any combination of the
following
areas of performance (determined either on
a consolidated basis or, as the
context permits, on a divisional,
subsidiary, line of business, geographical,
project, product or individual basis or in
combinations thereof): sales;
revenues; assets; expenses; income; profit
margins; earnings before or after any
deductions and whether or not on a
continuing operations or an aggregate or per
share basis; return on equity, investment,
capital or assets; inventory;
organizational realignments; infrastructure
changes; one or more operating
ratios; borrowing levels, leverage ratios
or credit rating; market share;
capital expenditures; cash flow; stock
price; stockholder return; sales of
products or services; customer acquisition
or retentions; acquisitions or
divestitures (in whole or in part); joint
ventures and strategic alliances;
spin-offs, split ups and the like;
reorganizations; strategic investments or
recapitalizations, restructurings,
financings (issuance of debt or equity) or
refinancings. Performance Criteria and any
Performance Goals with respect
thereto need not be based upon any
increase, a positive or improved result or
avoidance of loss.
1.14
"Performance Goal" means an objectively determinable performance
goal
established by the Committee with respect
to a given Performance Award that
relates to one or more Performance
Criteria.
1.15
"Performance Period" means the period of service determined by
the
Board, not to exceed five years, during
which years of service or performance is
to be measured for Restricted Stock Awards
or Stock Bonuses.
1.16 "Plan"
means the Ten Stix Inc. 2004 Employee Stock Inventive Plan No.
2, as from time to time amended and in
effect.
1.17 "Restricted
Stock" means Common Stock that is subject to a risk of
forfeiture or other restrictions that will
lapse upon the satisfaction of
specified conditions.
1.18 "Restricted
Stock Unit" means a right to receive Common Stock in the
future, with the right to future delivery
of the Common Stock subject to a risk
of forfeiture or other restrictions that
will lapse upon the satisfaction of
specified conditions.
1.19 "Service
Relationship" means (a) for an employee of the Company or its
Subsidiaries, such person's employment
relationship with the Company or its
Subsidiaries, and (b) for a consultant or
advisor of the Company or its
Subsidiaries, such person's consulting or
advisory relationship with the Company
or its Subsidiaries.
1.20 "Stock
Award" means an Award of Common Stock or Stock Units, either
restricted or registered, or any
combination thereof.
1.21
"Subsidiary" or "Subsidiaries" means a corporation or corporations
in
which the Company owns, directly or
indirectly, stock possessing fifty percent
(50%) or more of the total combined voting
power of all classes of stock.
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1.22 "Ten
Percent Stockholder" means any person who, at the time an Award
is granted, owns or is deemed to own stock
(as determined in accordance with
Sections 422 and 424 of the Code)
possessing more than ten percent (10%) of the
total combined voting power of all classes
of stock of the Company or its parent
or a subsidiary.
2. Purpose.
2.1 The Plan has
been established to advance the interests of the Company
by providing for the grant to Participants
of Incentive Awards.
3. Administration.
3.1 The Plan
shall be administered by the Committee and, to the extent
provided herein, the Board of Directors. A
majority of the members of the
Committee shall constitute a quorum, and
all determinations of the Committee
shall be made by a majority of its members.
Any determination of the Committee
under the Plan may be made without notice
or meeting of the Committee by a
writing signed by a majority of the
Committee members.
3.2 Subject to
the provisions set forth herein, the Committee shall have
full authority to determine the provisions
of Awards to be granted under the
Plan. Subject to the provisions set forth
herein, the Committee shall have full
authority to interpret the terms of the
Plan and of Awards granted under the
Plan, to adopt, amend and rescind rules and
guidelines for the administration of
the Plan and for its own acts and
proceedings and to decide all questions and
settle all controversies and disputes which
may arise in connection with the
Plan.
3.3 The decision
of the Committee or the Board of Directors, as applicable,
on any matter as to which the Committee or
the Board of Directors, as
applicable, is given authority under
Section 3.2 shall be final and binding on
all persons concerned.
3.4 Nothing in
the Plan shall be deemed to give any officer or employee, or
his legal representatives or assigns, any
right to participate in the Plan,
except to such extent, if any, as the
Committee or the Board, as applicable, may
have determined or approved pursuant to the
provisions of the Plan.
4. Shares Subject to the Plan;
Limitations.
4.1 Number of Shares.
The maximum number of shares of Common Stock that may
be delivered in satisfaction of Awards
granted under the Plan shall be
50,000,000, subject to adjustment in
accordance with the provisions of Section
7.1 (such shares may hereinafter be
referred to as the "Authorized Shares"). In
applying this limitation, the number of
shares delivered upon exercise of an
Award shall be determined net of any shares
actually or constructively
transferred by the Award holder to the
Company (including through the holding
back of shares that would otherwise have
been deliverable upon exercise) in
payment of the exercise price or tax
withholding.
4.2 Reacquired
Shares. If any Award granted under the Plan terminates
without having been exercised in full
(including an Award which terminates by
agreement between the Company and the
Participant), or if shares of Common Stock
are reacquired by the Company upon the
rescission of an exercise of an Award,
the number of shares of Common Stock as to
which an Award has not been exercised
prior to termination, or has been
reacquired upon the rescission of an Award,
shall be available for future grant within
the limits set forth in Section 4.1.
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4.3 Type of
Shares. Common Stock delivered by the Company under the Plan
may be authorized but unissued Common Stock
or previously issued Common Stock
acquired by the Company. No fractional
shares of Common Stock will be delivered
under the Plan.
5. Eligibility and Participation.
5.1 The
Committee will select Participants from among those key
employees
of, and consultants, and advisors to, the
Company or its Subsidiaries who, in
the opinion of the Committee, are in a
position to make a significant
contribution to the success of the Company
and its Subsidiaries. Eligibility for
Incentive Stock Options is limited to
employees of the Company or of a "parent
corporation" or "subsidiary corporation" of
the Company as those terms are
defined in Section 424 of the Code.
6. Awards.
6.1 General. The
Plan provides for the grant of Awards, which may be in the
form of Options, Warrants, Registered or
Restricted Stock, Registered or
Restricted Stock Units, or any combination
thereof. The Committee will determine
the terms and conditions of all Awards,
subject to the limitations provided
herein. The Plan also provides for the
grant of Performance Awards under Section
6.11. Notwithstanding anything herein to
the contrary, the Committee may, in its
sole discretion, grant Awards under the
Plan containing performance-related
goals that do not constitute Performance
Awards, do not comply with Section
6.11, are not subject to the limitation set
forth in Section 4.5, and are not
granted or administered to comply with the
requirements of Section 162(m) of the
Code.
6.2
Participants. From time to time while the Plan is in effect,
the
Committee may, in its absolute discretion,
select from among the persons
eligible to receive Awards (including
persons to whom Awards were previously
granted) those Participants to whom Awards
are to be granted.
6.3 Award
Agreements. Each Award granted under the Plan shall be
evidenced
by a written agreement in such form as the
Committee shall from time to time
approve. Award agreements shall comply with
the terms and conditions of the Plan
and may contain such other provisions not
inconsistent with the terms and
conditions of the Plan as the Committee
shall deem advisable. In the case of an
Incentive Stock Option, the Award agreement
shall contain such provisions
relating to exercise and other matters as
are required of "incentive stock
options" under the Code. Award agreements
may be evidenced by an electronic
transmission (including an e-mail or
reference to a website or other URL) sent
to the Participant through the Company's
normal process for communicating
electronically with its employees. As a
condition to receiving an Award, the
Committee may require the proposed
Participant to affirmatively accept the Award
and agree to the terms and conditions set
forth in the Award agreement by
physically and/or electronically executing
the Award agreement or by otherwise
physically and/or electronically
acknowledging such acceptance and agreement.
With or without such affirmative
acceptance, however, the Committee may
prescribe conditions (including the
exercise or attempted exercise of any
benefit conferred by the Award) under which
the proposed Participant may be
deemed to have accepted the Award and
agreed to the terms and conditions set
forth in the Award agreement.
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6.4
Non-Transferability of Awards. No Award may be transferred by
the
Participant otherwise than by will, by the
laws of descent and distribution or
as permitted by Rule 701 of the Securities
Act of 1933.
6.5 Exercise;
Vesting; Lapse of Restrictions. The Committee may determine
the time or times at which (a) an Award
will become exercisable, (b) an Award
will vest or (c) the restrictions to which
an Award is subject will lapse. In no
event shall the right to exercise a Stock
Option fall below the rate of at least
20% per year over five (5) years from the
date the option is granted, subject to
the condition of continued employment
during such time. In the case of an Award
that becomes exercisable, vests or has
restrictions which lapse in installments,
the Committee or the Board of Directors may
later determine to accelerate the
time at which one or more of such
installments may become exercisable or vest or
at which one or more restrictions may
lapse.
6.5.1 Determination of the Exercise Price. The exercise price for
each
option shall be
determined by the Committee or Board of Directors.
(a) Incentive Stock Option. The exercise price per share for an
Incentive Stock Option shall not be less than one hundred
percent
(100%) of the fair market value, as determined by the Committee
or
Board based on the recent market price of securities of the same
class
that are publicly traded. No Incentive Stock Option granted to
an
Optionee who at the time the Option is granted owns stock
possessing
more than ten percent (10%) of the total combined voting power of
all
classes of stock of a Participating Company within the meaning
of
Section 422(b)(6) of the Code (a "Ten Percent Owner Optionee")
shall
have an exercise price per share less than one hundred ten
percent
(110%) of the fair market value, as determined by the Committee
or
Board, of a share of Stock on the date of granting of the
Option.
(b) Nonqualified Stock Option. The exercise price of each
Nonqualified Stock Option shall not be less than eighty five
percent
(85%) of the fair market value of a Share of the Company on the
date
the option is granted; provided, however, that the exercise price
of a
Nonqualified Stock Option granted to an individual who owns
stock
possessing more than ten percent (10%) of the combined voting power
of
the Company, its parent, or subsidiaries shall not be less than
one
hundred ten percent (110%) of the fair market value of a Share of
the
Company on the date the option is granted. The fair market value
of
each Nonqualified Stock Option shall be determined by the Board
based
on the recent market price of securities of the same class that
are
publicly traded.
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6.5.2 Additional Conditions. The Committee or the Board of
Directors
may at the time
of grant condition the exercise of an Award upon agreement
by the
Participant to subject the Common Stock to any restrictions on
transfer in
effect on the date of exercise, upon representations regarding
the continuation
of a Service Relationship and upon other terms not
inconsistent
with this Plan. Any such conditions shall be set forth in the
Award agreement
or other document evidencing the Award.
6.5.3 Manner of Exercise. Any exercise of an Award shall be in
writing
signed by the
proper person and delivered or mailed to the office of Stock
Option
Administration of the Company, accompanied by an appropriate
exercise notice and
payment in full for the number of shares in respect to
which the Award
is exercised, or in such other manner as may be from time
to time
prescribed by the Committee, including, without limitation,
pursuant to
electronic, telephonic or other instructions to a third party
administrating
the Plan. In the event an Award is exercised by the executor
or administrator
of a deceased Participant, or by the person or persons to
whom the Award
has been transferred by the Participant's will or the
applicable laws
of descent and distribution, the Company shall be under no
obligation to
deliver stock thereunder until the Company is satisfied that
the person or
persons exercising the Award is or are the duly appointed
executor or
administrator of the deceased Participant or the person or
persons to whom
the Award has been transferred by the Participant's will or
by the
applicable laws of descent and distribution.
6.5.4 Payment of Exercise Price. Where the exercise of an Award is
to
be accompanied
by payment, the Committee may determine the required or
permitted forms
of payment, subject to the following: (a) all payments will
be by cash or
check acceptable to the Committee, or, if so permitted by the
Committee, (i)
through the delivery of shares of Common Stock that have
been outstanding
for at least six months (unless the Committee approves a
shorter period)
and that have a fair market value equal to the exercise
price, (ii) by
delivery to the Company of a promissory note of the person
exercising the
Award, payable on such terms as are specified by the
Committee, (iii)
through a broker-assisted exercise program acceptable to
the Committee,
or (iv) by any combination of the foregoing permissible
forms of
payment; and (b) where shares of Common Stock issued under an
Award are part
of an original issue of shares, the Award will require that
at least so much
of the exercise price as equals the par value of such
shares be paid
in a type of consideration that is lawful for the payment of
par value under
applicable law. The delivery of shares in payment of the
exercise price
under clause (a)(i) above may be accomplished either by
actual delivery
or by constructive delivery through attestation of
ownership,
subject to such rules as the Committee may prescribe.
6.5.5 Period of Awards. An Award shall be exercisable during
such
period of time
as the Committee may specify, but in no event shall an
option have an
exercise period more than 120 months from the date the
option is
granted, and no more that five (5) years from the date the
Option
is granted, in
the case of an Incentive Stock Option granted to a Ten
Percent
Stockholder.
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6.6 Termination
of Awards. Unless the Award by its terms or the Committee
or Board of Directors by resolution shall
expressly provide otherwise:
6.6.1 Termination of a Participant's Service Relationship by Reason
of
Death. If a
Participant's Service Relationship terminates by reason of
death, (a) all
Options held by the Participant shall vest fully on the date
that the
Participant's Service Relationship terminates by reason of
death
without regard
to whether any applicable vesting requirements have been
fulfilled, and
(b) all Stock Awards held by the Participant shall vest
fully on the
date that the Participant's Service Relationship terminates by
reason of death
without regard to whether any applicable vesting
requirements
have been fulfilled and/or all restrictions shall fully lapse
as of such date
without regard to whether any applicable requirements have
been fulfilled.
All Awards may be exercised by the Participant's executor
or administrator
or the person or persons to whom the Awards are
transferred by
will or the applicable laws of descent and distribution at
any time or
times within three years after the date of the Participant's
death.
Unexercised Options shall expire automatically at the end of
such
three-year
period.
6.6.2 Termination of a Participant's Service Relationship by Reason
of
Disability. If a
Participant's Service Relationship term
