ARIES VENTURES INC. MANAGEMENT INCENTIVE STOCK OPTION PLAN

 

                              ARIES VENTURES INC.

                     MANAGEMENT INCENTIVE STOCK OPTION PLAN

 

 

 

1. ESTABLISHMENT, OBJECTIVES AND DURATION.

 

     a.    ESTABLISHMENT OF THE PLAN. Aries Ventures Inc. hereby establishes an

          incentive compensation plan to be known as the "Aries Ventures Inc.

          Management Incentive Stock Option Plan" (the "Plan"), as set forth in

          this document. The Plan permits the grant of Incentive Stock Options,

          and Nonqualified Stock Options.

 

     b.    OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the

          profitability and growth of the Company through the use of incentives

          which are consistent with the Company's objectives and which link the

           interests of Participants to those of the Company's stockholders; to

          provide Participants with an incentive for excellence in individual

          performance; and to promote teamwork among Participants. The Plan is

          further intended to provide flexibility to the Company in its ability

          to motivate, attract, and retain the services of Participants who make

          significant contributions to the Company's success and to allow

          Participants to share in the success of the Company.

 

     c.    DURATION OF THE PLAN. The Plan was adopted and became effective as of

          April 11, 2000 (the "Effective Date"). The Plan was authorized by the

          Company's Second Amended Chapter 11 Plan of Reorganization, which

           became effective on April 11, 2000. The Plan shall remain in effect,

          subject to the right of the Board of Directors or the Committee to

          amend or terminate the Plan at any time pursuant to Section 11 hereof,

          until all Shares subject to it shall have been purchased or acquired

          according to the Plan's provisions. However, in no event may an

          Incentive Stock Option be granted under the Plan on or after April 11,

          2010.

 

 

2. DEFINITIONS.

 

Whenever used in the Plan, the following terms shall have the meanings set forth

below:

 

     a.    "AFFILIATE" means a "parent corporation" or "subsidiary corporation"

          as defined in Section 424 of the Code.

 

     b.    "AWARD" means, individually or collectively, a grant under this Plan

          of Incentive Stock Options or Nonqualified Stock Options.

 

     c.    "AWARD AGREEMENT" means an agreement entered into by the Company and

          each Participant setting forth the terms and provisions applicable to

          Awards granted under this Plan.

 

     d.    "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning

          ascribed to such term in Rule 13d-3 of the General Rules and

          Regulations under the Exchange Act.

 

     e.    "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the

          Company.

 

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     f.    "CAUSE" shall be determined by the Committee, exercising good faith

          and reasonable judgment, and shall mean the occurrence of any one or

          more of the following:

 

          i.    The willful and continued failure by the Participant to

               substantially perform his duties (other than any such failure

               resulting from the Participant's Disability) after a written

               demand for substantial performance is delivered by the Committee

               to the Participant that identifies in reasonable detail the

               manner in which the Committee believes that the Participant has

               not substantially performed his duties, and the Participant has

               failed to remedy the situation within 30 calendar days of

               receiving such notice; or

 

          ii.   The Participant's conviction for committing an act of fraud,

               embezzlement, theft or another act constituting a felony; or

 

          iii. Any breach by a Participant of any written agreement with the

               Company, including any agreement concerning a Participant's

               employment, non-competition or confidentiality of Company

               proprietary information;

 

          iv.   The willful engaging by the Participant in gross misconduct

               materially and demonstrably injurious to the Company, as

               determined by the Committee; or

 

          v.    Any act or omission entitling the Company to terminate a

               Participant's employment for cause as defined in any applicable

               agreement between the Participant and Company which hereby

               supercede the standards in clauses (i) through (iv) above to the

               extent inconsistent.

 

     g.    "CHANGE IN CONTROL" of the Company shall be deemed to have occurred as

          of the first day that any one or more of the following conditions

          shall have been satisfied:

 

          i.    The acquisition by any Person of Beneficial Ownership of 50% or

               more of either (A) the then outstanding shares of Common Stock of

               the Company, or (B) the combined voting power of the outstanding

               voting securities of the Company entitled to vote generally in

               the election of Directors; provided, however, that for purposes

               of this subsection, the following transactions shall not

               constitute a Change of Control: (1) any acquisition directly from

               the Company through a public offering of shares of Common Stock

               of the Company, (2) any acquisition by the Company, (3) any

               acquisition by any employee benefit plan (or related trust)

               sponsored or maintained by the Company or any corporation

               controlled by the Company, or (4) any acquisition by any

               corporation pursuant to a transaction which complies with clauses

               (A), (B) and (C) of subsection (iii) below;

 

          ii.   The cessation, for any reason, of the individuals who constitute

               the Company's Board of Directors as of April 11, 2000 ("Incumbent

               Board") to constitute at least a majority of the Company's Board

               of Directors; provided, however, that any individual becoming a

               Director following said date whose election, or nomination for

               election by the Company's stockholders, was approved by a vote of

               at least a majority of the Directors then comprising the

               Incumbent Board shall be considered as though such individual was

               a member of the Incumbent Board, but excluding, for this purpose,

               any such individual whose initial assumption of office occurs

               because of an actual or threatened election contest with respect

               to the election or removal of Directors or other actual or

               threatened solicitation of proxies or consents by or on behalf of

               a Person other than the Company's Board of Directors;

 

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          iii. The consummation of a reorganization, merger or consolidation or

               sale or other disposition of all or substantially all of the

               assets of the Company ("Business Combination") unless, following

               such Business Combination, (A) all or substantially all of the

               individuals and entities who were the Beneficial Owners,

               respectively, of the outstanding shares of Common Stock of the

               Company and the outstanding voting securities of the Company

               immediately before such Business Combination beneficially own,

               directly or indirectly, more than 50% of, respectively, the then

               outstanding shares of Common Stock and the combined voting power

                of the then outstanding voting securities entitled to vote

               generally in the election of Directors, as the case may be, of

               the Company resulting from such Business Combination (including,

               without limitation, a corporation which as a result of such

               transaction owns the Company or all or substantially all of the

               Company's assets either directly or through one or more

               subsidiaries) in substantially the same proportions as their

               ownership immediately before such Business Combination of the

               outstanding shares of Common Stock and the outstanding voting

               securities of the Company, as the case may be; (B) no party

                (excluding any corporation resulting from such Business

               Combination or any employee benefit plan (or related trust) of

               the Company or such corporation resulting from such Business

               Combination) beneficially owns, directly or indirectly, 50% or

               more of, respectively, the then outstanding shares of Common

               Stock of the corporation resulting from such Business Combination

               or the combined voting power of the then outstanding voting

               securities of such corporation except to the extent that such

               ownership existed before the Business Combination; and (C) at

               least a majority of the members of the board of directors of the

                corporation resulting from such Business Combination were members

               of the Company's Board of Directors at the time of the execution

               of the initial agreement, or of the action of the Company's Board

               of Directors, providing for such Business Combination; or

 

          iv.   The approval by the stockholders of the Company of a complete

               liquidation or dissolution of the Company.

 

     h.    "CODE" means the Internal Revenue Code of 1986, as amended from time

          to time.

 

     i.    "COMMITTEE" means the Compensation Committee of the Board, as

          specified in Section 3 herein, or such other Committee appointed by

          the Board to administer the Plan with respect to grants of Awards.

 

     j.    "COMPANY" means Aries Ventures Inc., a Nevada corporation, and also

          means any corporation of which a majority of the voting capital stock

          is owned directly or indirectly by Aries Ventures Inc. or by any of

          its Subsidiaries, and any other corporation designated by the

          Committee as being a Company hereunder (but only during the period of

          such ownership or designation).

 

     k.    "DIRECTOR" means any individual who is a member of the Board of

           Directors of the Company.

 

     l.    "DISABILITY", unless a different standard is set forth in any written

          agreement with a Participant, as applied to a Participant "Disability"

          means that the Participant (a) has established to the satisfaction of

          the Committee that the Participant is unable to engage in any

          substantial gainful activity by reason of any medically determinable

          physical or mental impairment which can be expected to last for a

 

 

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          continuous period of no less than 12 months (all within the meaning of

          Section 22(e)(3) of the Code), and (b) has satisfied any requirement

          imposed by the Committee in regard to evidence of such disability.

 

     m.    "ELIGIBLE PERSON" shall mean any officer, director, employee or

          consultant of the Company or any Affiliate.

 

     n.    "EMPLOYEE" means any person employed by the Company or an Affiliate.

 

     o.    "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended

          from time to time, or any successor act thereto.

 

     p.    "FAIR MARKET VALUE" Except as otherwise determined by the Committee,

          the "Fair Market Value" of a share of Common Stock as of any date

          shall be equal to the closing sale price of a share of Common Stock as

          reported on The National Association of Securities Dealers' New York

          Stock Exchange Composite Reporting Tape (or if the Common Stock is not

           traded on The New York Stock Exchange, the closing sale price on the

          exchange on which it is traded or as reported by an applicable

          automated quotation system, including the Nasdaq SmallCap Market or

          over-the-counter bulletin board or in the "pink sheet") (the

          "Composite Tape"), on the applicable date or, if no sales of Common

          Stock are reported on such date, the closing sale price of a share of

          Common Stock on the date the Common Stock was last reported on the

          Composite Tape (or any other exchange or automated quotation system,

          if applicable) as of the date specified by the Committee (and if no

          date is specified, then on the date of the meeting of the Committee at

          which the award was granted).

 

     q.    "IMMEDIATE FAMILY MEMBERS" means the spouse, children and

          grandchildren of a Participant.

 

     r.    "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares

          granted under Section 6 herein and which is designated as an Incentive

          Stock Option and which is intended to meet the requirements of Code

          Section 422.

 

     s.    "INSIDER" shall mean an individual who is, on the relevant date, a

          Director, a 10% Beneficial Owner of any class of the Company's equity

          securities that is registered pursuant to Section 12 of the Exchange

          Act or an officer of the Company, as defined under Section 16 of the

          Exchange Act and as determined by the Board of Directors from time to

          time.

 

     t.    "NONEMPLOYEE DIRECTOR" means an individual who is a member of the

          Board of Directors of the Company but who is not an Employee of the

          Company.

 

     u.    "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase

          Shares granted under Section 6 herein and which is not intended to

          meet the requirements of Code Section 422.

 

     v.    "OFFICER" shall mean the Company's chairman, president, principal

          financial officer, principal accounting officer (or, if there is no

          such accounting officer, the controller), any vice-president of the

          Company in charge of a principal business unit, division or function

          (such as sales, administration or finance), any other officer who

          performs a policy-making function, or any other person who performs

          similar policy-making functions for the Company. Officers of

          Subsidiaries shall be deemed Officers of the Company if they perform

          such policy-making functions for the Company. As used in this

          paragraph, the phrase "policy-making function" does not include

          policy-making functions that are not significant. Unless specified

           otherwise in a resolution by the Board, an "executive officer"

          pursuant to Item 401(b) of Regulation S-K (17 C.F.R. ss.229.401(b))

          shall be only such person designated as an "Officer" pursuant to the

          foregoing provisions of this paragraph.

 

     w.    "OPTION" means an Incentive Stock Option or a Nonqualified Stock

          Option, as described in Section 6 herein.

 

     x.    "OPTION PRICE" means the price at which a Share may be purchased by a

          Participant pursuant to an Option.

 

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     y.    "PARTICIPANT" means an Eligible Person who has outstanding an Award

          granted under the Plan.

 

     z.    "PERSON" shall have the meaning ascribed to such term in Section

          3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)

          thereof, including a "group" as defined in Section 13(d) thereof.

 

     aa.   "RETIREMENT" unless a different standard is set forth in any written

          agreement with a Participant, as applied to a Participant,

          "Retirement" means the Participant's termination of employment in a

          manner which qualifies the Participant to receive immediately payable

          retirement benefits under any applicable retirement plan maintained by

          the Company (the "Retirement Plan"), under the successor or

          replacement of such Retirement Plan if it is then no longer in effect,

          or under any other retirement plan maintained or adopted by the

          Company which is determined by the Committee to be the functional

          equivalent of such Retirement Plan; or, with respect to a Participant

          who may not or has not participated in a retirement plan or if there

          is no such retirement plan maintained by the Company or an Affiliate,

          "Retirement" shall have the meaning determined by the Committee from

          time to time.

 

     bb.   "SHARES" means Common Stock of Aries Ventures Inc., par value $0.01

          per share.

 

     cc.   "SUBSIDIARY" means any corporation, partnership, joint venture or

          other entity in which the Company has a majority voting interest.

 

3. ADMINISTRATION.

 

     a.    THE COMMITTEE. The Plan shall be administered by the Committee, or by

          any other committee appointed by the Board, which Committee shall

          consist solely of two or more "Nonemployee Directors" within the

          meaning of Rule 16b-3 under the Exchange Act, or any successor

          provision. The members of the Committee shall be appointed from time

          to time by, and shall serve at the discretion of, the Board of

          Directors.

 

     b.    AUTHORITY OF THE COMMITTEE. Except as limited by law and subject to

          the provisions herein, the Committee shall have full power in its

          discretion to select Eligible Persons who shall participate in the

          Plan; determine the sizes and types of Awards; determine the terms and

          conditions of Awards (including vesting periods and restrictions);

          prescribe the form of, construe and interpret any agreement or

          instrument entered into under the Plan as they apply to Participants;

          construe and interpret the terms and conditions of this Plan;

           establish, amend, or waive rules and regulations for the Plan's

          administration as they apply to Participants; alter, amend, suspend or

          terminate the Plan in whole or in part; and (subject to the provisions

          of Section 10 herein) amend the terms and conditions of any

          outstanding Award to the extent such terms and conditions are within

          the discretion of the Committee as provided in the Plan. Further, the

          Committee shall make all other determinations which may be necessary

          or advisable for the administration of the Plan. As permitted by law,

          the Committee may delegate its authority as identified herein.

 

     c.    DECISIONS BINDING. All determinations and decisions made by the

           Committee pursuant to the provisions of the Plan and all related

          orders and resolutions of the Board shall be final, conclusive and

          binding on all persons, including the Company, its stockholders,

          Employees, Participants and their estates and beneficiaries.

 

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     d.    COSTS OF PLAN. The costs and expenses incurred in the operation and

          administration of the Plan shall be borne by the Company.

 

     e.    INDEMNIFICATION. Each person who is or shall have been a member of the

          Committee shall be indemnified and held harmless by the Company

          against and from any loss, cost, liability, or expense that may be

          imposed upon or reasonably incurred by him in connection with or

          resul