MEDEFILE 2009 INCENTIVE STOCK PLAN
This Medefile 2009
Incentive Stock Plan (the
" Plan ") is designed to retain directors, executives and
selected employees and consultants and reward them for making major
contributions to the success of the Company. These
objectives are accomplished by making long-term incentive awards
under the Plan thereby providing Participants with a proprietary
interest in the growth and performance of the Company.
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" Board
" - The Board of Directors of the Company.
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" Code "
- The Internal Revenue Code of 1986, as amended from time to
time.
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"
Committee " - The Compensation Committee of the Company's
Board, or such other committee of the Board that is designated by
the Board to administer the Plan, composed of not less than two
members of the Board all of whom are disinterested persons, as
contemplated by Rule 16b-3 (" Rule 16b-3 ") promulgated
under the Securities Exchange Act of 1934, as amended (the "
Exchange Act ").
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"
Company " – Medefile International, Inc. and its
subsidiaries including subsidiaries of subsidiaries.
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" Exchange
Act " - The Securities Exchange Act of 1934, as amended from
time to time.
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" Fair
Market Value " - The fair market value of the Company's issued
and outstanding Stock as determined in good faith by the Board or
Committee.
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" Grant
" - The grant of any form of stock option, stock award, or stock
purchase offer, whether granted singly, in combination or in
tandem, to a Participant pursuant to such terms, conditions and
limitations as the Committee may establish in order to fulfill the
objectives of the Plan.
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" Grant
Agreement " - An agreement between the Company and a
Participant that sets forth the terms, conditions and limitations
applicable to a Grant.
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" Option
" - Either an Incentive Stock Option, in accordance with Section
422 of Code, or a Nonstatutory Option, to purchase the Company's
Stock that may be awarded to a Participant under the Plan. A
Participant who receives an award of an Option shall be referred to
as an " Optionee ."
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"
Participant " - A director, officer, employee or consultant
of the Company to whom an Award has been made under the
Plan.
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" Restricted
Stock Purchase Offer " - A Grant of the right to purchase a
specified number of shares of Stock pursuant to a written agreement
issued under the Plan.
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" Securities
Act " - The Securities Act of 1933, as amended from time to
time.
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" Stock
" - Authorized and issued or unissued shares of common stock of the
Company.
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" Stock
Award " - A Grant made under the Plan in stock or denominated
in units of stock for which the Participant is not obligated to pay
additional consideration.
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Administration.
The Plan shall be administered by the Board, provided however, that
the Board may delegate such administration to the Committee.
Subject to the provisions of the Plan, the Board and/or the
Committee shall have authority to (a) grant, in its discretion,
Incentive Stock Options in accordance with Section 422 of the Code,
or Nonstatutory Options, Stock Awards or Restricted Stock Purchase
Offers; (b) determine in good faith the fair market value of the
Stock covered by any Grant; (c) determine which eligible persons
shall receive Grants and the number of shares, restrictions, terms
and conditions to be included in such Grants; (d) construe and
interpret the Plan; (e) promulgate, amend and rescind rules and
regulations relating to its administration, and correct defects,
omissions and inconsistencies in the Plan or any Grant; (f)
consistent with the Plan and with the consent of the Participant,
as appropriate, amend any outstanding Grant or amend the exercise
date or dates thereof; (g) determine the duration and purpose of
leaves of absence which may be granted to Participants without
constituting termination of their employment for the purpose of the
Plan or any Grant; and (h) make all other determinations necessary
or advisable for the Plan's administration. The interpretation and
construction by the Board of any provisions of the Plan or
selection of Participants shall be conclusive and final. No member
of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
Grant made thereunder.
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General: The persons who shall be eligible to
receive Grants shall be directors, officers, employees or
consultants to the Company. The term consultant shall mean any
person, other than an employee, who is engaged by the Company to
render services and is compensated for such services. An Optionee
may hold more than one Option. Any issuance of a Grant to an
officer or director of the Company subsequent to the first
registration of any of the securities of the Company under the
Exchange Act shall comply with the requirements of Rule
16b-3.
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Incentive
Stock Options: Incentive Stock Options may only be
issued to employees of the Company. Incentive Stock Options may be
granted to officers or directors, provided they are also employees
of the Company. Payment of a director's fee shall not be sufficient
to constitute employment by the Company.
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The Company
shall not grant an Incentive Stock Option under the Plan to any
employee if such Grant would result in such employee holding the
right to exercise for the first time in any one calendar year,
under all Incentive Stock Options granted under the Plan or any
other plan maintained by the Company, with respect to shares of
Stock having an aggregate fair market value, determined as of the
date of the Option is granted, in excess of $100,000. Should it be
determined that an Incentive Stock Option granted under the Plan
exceeds such maximum for any reason other than a failure in good
faith to value the Stock subject to such option, the excess portion
of such option shall be considered a Nonstatutory Option. To the
extent the employee holds two (2) or more such Options which become
exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such Option as
Incentive Stock Options under the Federal tax laws shall be applied
on the basis of the order in which such Options are granted. If,
for any reason, an entire Option does not qualify as an Incentive
Stock Option by reason of exceeding such maximum, such Option shall
be considered a Nonstatutory Option.
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Nonstatutory
Option: The
provisions of the foregoing Section 3(b) shall not apply to any
Option designated as a " Nonstatutory Option " or which sets
forth the intention of the parties that the Option be a
Nonstatutory Option.
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Stock Awards
and Restricted Stock Purchase Offers: The provisions of this Section 3
shall not apply to any Stock Award or Restricted Stock Purchase
Offer under the Plan.
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Authorized
Stock: Stock subject to
Grants may be either unissued or reacquired Stock.
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Number of
Shares: Subject to adjustment as provided in
Section 5(i) of the Plan, the total number of shares of Stock which
may be purchased or granted directly by Options, Stock Awards or
Restricted Stock Purchase Offers, or purchased indirectly through
exercise of Options granted under the Plan shall not exceed Seven
Hundred Fifty Million (750,000,000) shares. If any Grant
shall for any reason terminate or expire, any shares allocated
thereto but remaining unpurchased upon such expiration or
termination shall again be available for Grants with respect
thereto under the Plan as though no Grant had previously occurred
with respect to such shares. Any shares of Stock issued pursuant to
a Grant and repurchased pursuant to the terms thereof shall be
available for future Grants as though not previously covered by a
Grant.
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Reservation
of Shares: The Company shall reserve and keep
available at all times during the term of the Plan such number of
shares as shall be sufficient to satisfy the requirements of the
Plan. If, after reasonable efforts, which efforts shall not include
the registration of the Plan or Grants under the Securities Act,
the Company is unable to obtain authority from any applicable
regulatory body, which authorization is deemed necessary by legal
counsel for the Company for the lawful issuance of shares
hereunder, the Company shall be relieved of any liability with
respect to its failure to issue and sell the shares for which such
requisite authority was so deemed necessary unless and until such
authority is obtained.
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Application
of Funds : The
proceeds received by the Company from the sale of Stock pursuant to
the exercise of Options or rights under Stock Purchase Agreements
will be used for general corporate purposes.
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No
Obligation to Exercise : The issuance of a Grant shall
impose no obligation upon the Participant to exercise any rights
under such Grant.
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Terms and
Conditions of Options. Options granted hereunder shall be evidenced
by agreements between the Company and the respective Optionees, in
such form and substance as the Board or Committee shall from time
to time approve. The form of Incentive Stock Option Agreement
attached hereto as Exhibit A and the three forms of a
Nonstatutory Stock Option Agreement for employees, for directors
and for consultants, attached hereto as Exhibit B-1,
Exhibit B-2 and Exhibit B-3, respectively, shall be
deemed to be approved by the Board. Option agreements need not be
identical, and in each case may include such provisions as the
Board or Committee may determine, but all such agreements shall be
subject to and limited by the following terms and
conditions:
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Number of
Shares: Each Option shall
state the number of shares to which it pertains.
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Exercise
Price: Each Option shall
state the exercise price.
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Medium and
Time of Payment: The exercise price shall become
immediately due upon exercise of the Option and shall be paid in
cash or check made payable to the Company. Should the Company's
outstanding Stock be registered under Section 12(g) of the Exchange
Act at the time the Option is exercised, then the exercise price
may also be paid as follows:
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in shares of
Stock held by the Optionee for the requisite period necessary to
avoid a charge to the Company's earnings for financial reporting
purposes and valued at Fair Market Value on the exercise date,
or
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through a
special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written
instructions (a) to a Company designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for
the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Company
by reason of such purchase and (b) to the Company to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
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At the
discretion of the Board, exercisable either at the time of Option
grant or of Option exercise, the exercise price may also be paid
(i) by Optionee's delivery of a promissory note in form and
substance satisfactory to the Company and permissible under
applicable securities rules and bearing interest at a rate
determined by the Board in its sole discretion, but in no event
less than the minimum rate of interest required to avoid the
imputation of compensation income to the Optionee under the Federal
tax laws, or (ii) in such other form of consideration permitted by
the State of Oklahoma corporations law as may be acceptable to the
Board.
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Term and
Exercise of Options: Any Option granted to an employee of
the Company shall become exercisable over a period of no longer
than ten (10) years. No Option shall be exercisable, in whole or in
part, prior to one (1) year from the date it is granted unless the
Board shall specifically determine otherwise, as provided herein.
In no event shall any Option be exercisable after the expiration of
ten (10) years from the date it is granted. Unless otherwise
specified by the Board or the Committee in the resolution
authorizing such Option, the date of grant of an Option shall be
deemed to be the date upon which the Board or the Committee
authorizes the granting of such Option.
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Each Option shall be exercisable to the nearest
whole share, in installments or otherwise, as the respective Option
agreements may provide. During the lifetime of an Optionee, the
Option shall be exercisable only by the Optionee and shall not be
assignable or transferable by the Optionee, and no other person
shall acquire any rights therein. To the extent not exercised,
installments (if more than one) shall accumulate, but shall be
exercisable, in whole or in part, only during the period for
exercise as stated in the Option agreement, whether or not other
installments are then exercisable.
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Termination
of Status as Employee, Consultant or Director:
If Optionee's status as
an employee shall terminate for any reason other than Optionee's
disability or death, then Optionee (or if the Optionee shall die
after such termination, but prior to exercise, Optionee's personal
representative or the person entitled to succeed to the Option)
shall have the right to exercise the portions of any of Optionee's
Incentive Stock Options which were exercisable as of the date of
such termination, in whole or in part, not less than 30 days nor
more than three (3) months after such termination (or, in the event
of " termination for good cause " as that term is defined in
Nevada case law related thereto, or by the terms of the Plan or the
Option Agreement or an employment agreement, the Option shall
automatically terminate as of the termination of employment as to
all shares covered by the Option).
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With respect to
Nonstatutory Options granted to employees, directors or
consultants, the Board may specify such period for exercise, not
less than 30 days (except that in the case of " termination for
cause " or removal of a director, the Option shall
automatically terminate as of the termination of employment or
services as to shares covered by the Option, following termination
of employment or services as the Board deems reasonable and
appropriate. The Option may be exercised only with respect to
installments that the Optionee could have exercised at the date of
termination of employment or services. Nothing contained herein or
in any Option granted pursuant hereto shall be construed to affect
or restrict in any way the right of the Company to terminate the
employment or services of an Optionee with or without
cause.
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Disability
of Optionee: If an Optionee is disabled (within
the meaning of Section 22(e)(3) of the Code) at the time of
termination, the three (3) month period set forth in Section 5(e)
shall be a period, as determined by the Board and set forth in the
Option, of not less than six months nor more than one year after
such termination.
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Death of
Optionee: If
an Optionee dies while employed by, engaged as a consultant to, or
serving as a Director of the Company, the portion of such
Optionee's Option which was exercisable at the date of death may be
exercised, in whole or in part, by the estate of the decedent or by
a person succeeding to the right to exercise such Option at any
time within (i) a period, as determined by the Board and set forth
in the Option, of not less than six (6) months nor more than one
(1) year after Optionee's death, which period shall not be more, in
the case of a Nonstatutory Option, than the period for exercise
following termination of employment or services, or (ii) during the
remaining term of the Option, whichever is the lesser. The Option
may be so exercised only with respect to installments exercisable
at the time of Optionee's death and not previously exercised by the
Optionee.
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Nontransferability of Option:
No Option shall be
transferable by the Optionee, except by will or by the laws of
descent and distribution.
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Recapitalization: Subject to any required action of
shareholders, the number of shares of Stock covered by each
outstanding Option, and the exercise price per share thereof set
forth in each such Option, shall be proportionately adjusted for
any increase or decrease in the number of issued
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