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T3 MOTION, INC.
2007 STOCK OPTION/STOCK
ISSUANCE PLAN
I.
GENERAL
PROVISIONS
This 2007 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote
the interests of T3 Motion, Inc., a Delaware corporation, by
providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary
interest in the Corporation as an incentive for them to
remain in the service of the Corporation.
Capitalized terms herein shall have the meanings
assigned to such terms in the
attached Appendix.
1. The
Plan shall be divided into two (2) separate equity
programs:
(a) the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock, and
(b) the Stock
Issuance Program under which eligible persons may, at the
discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase
of such
shares or as a bonus for
services rendered the Corporation (or any Parent or
Subsidiary).
2. The
provisions of Sections I and IV
shall apply to both equity programs under the Plan and shall
accordingly govern the interests of all persons under the
Plan.
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C.
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ADMINISTRATION OF THE PLAN
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1.
The Plan shall be administered by the Board. However, any or
all administrative functions otherwise exercisable by the
Board may be delegated to the Committee. Members of the
Committee shall serve for
such period
of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any
time terminate the functions of the Committee and reassume
all powers and authority previously delegated to
the Committee.
2. The
Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such
rules and regulations as it may deem appropriate for proper
administration of the Plan and to make
such determinations under, and issue such interpretations of,
the Plan and any outstanding options thereunder as it may
deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who
have an interest in the Plan or any option
thereunder.
1. The
persons eligible to participate in the Plan are as
follows:
(a)
Employees,
(b)
non-employee members of the Board or the non-employee
members of the board of directors of any Parent or
Subsidiary, and
(c)
consultants and other independent advisors who provide
services to the Corporation (or any Parent or
Subsidiary).
2.
The Plan Administrator shall have full authority to
determine, (i) with respect to the option grants under the
Option Grant Program, which eligible persons are to receive
option grants, the time or times when such option grants are
to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times
at which each option is to become exercisable, the vesting
schedule (if any) applicable to the option shares and the
maximum term for which the option is to remain outstanding,
and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive stock
issuances, the time or times when such issuances are to be
made, the number of shares to be issued to each Participant,
the vesting schedule (if any) applicable to the issued shares
and the consideration to be paid by the Participant for such
shares.
3. The Plan
Administrator shall have the absolute discretion either to
grant options in accordance with the Option Grant Program or
to effect stock issuances in accordance with the Stock
Issuance Program.
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E.
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STOCK SUBJECT TO THE PLAN
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1. The
stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock. The maximum number
of shares of Common Stock which may be issued over the term
of the Plan shall not exceed 7,000,000 shares.
2. Shares
of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent
(i) the options expire or terminate for any reason prior to
exercise in full or (ii) the options are cancelled in
accordance
with the cancellation-regrant provisions of Section II.
Unvested shares issued under the Plan and subsequently
repurchased by the Corporation, at the option exercise price
paid per share, pursuant to the Corporation's repurchase
rights under the Plan shall be added back to the number of
shares of Common Stock reserved for issuance under the Plan
and shall accordingly be available for reissuance through one
or more subsequent option grants or direct stock issuances
under the Plan.
3.
Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or
class of securities issuable under the Plan and (ii) the
number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder.
The adjustments determined by the Plan Administrator shall be
final, binding and conclusive. In no event shall any such
adjustments be made in connection with the conversion of one
or more outstanding shares of the Corporation's preferred
stock into shares of Common Stock.
II. OPTION GRANT
PROGRAM
Each
option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; provided
, however, that each such document shall comply with the
terms specified below. Each document evidencing an Incentive
Option shall, in addition, be subject to the provisions of
the Plan applicable to such options.
1.
Exercise
Price.
(a) The
exercise price per share shall be fixed by the Plan
Administrator in accordance with the following
provisions:
(i) The
exercise price per share shall not be less than eighty-five
percent (85%) of the Fair Market Value per share of Common
Stock on the option grant date.
(ii) If the
person to whom the option is granted is a 10% Shareholder, then the
exercise price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per share of Common
Stock
on the option grant
date.
(b)
The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of
Section IV.A and the documents evidencing the option, be payable in
cash or check made payable to the Corporation. Should
the Common Stock be registered under Section 12(g) of the 1934 Act
at the time the option is exercised, then the exercise price may
also be paid as follows:
(i)
in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(ii)
to the extent the option is exercised for vested
shares, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide
irrevocable written instructions (A) to a Corporation
designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, 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 Corporation by
reason of such exercise and (8) to the Corporation to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the
extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must
be made on the Exercise Date.
2.
Exercise
and Term of Options. Each option
shall be exercisable at such time or times, during such period
and for such number of shares
as shall be determined by the Plan Administrator and set forth in
the documents evidencing the option grant. However, no option shall
have a term in excess of ten (10) years measured from the option
grant date.
3.
Effect
of Termination of Service.
(a) The
following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or
death:
(i) Should
the Optionee cease to remain in Service for any reason other
than Disability or death, then the Optionee shall have a
period of three (3) months following the date of such
cessation of Service during which to exercise each
outstanding option held by such Optionee.
(ii) Should
Optionee's Service terminate by reason of Disability, then
the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which
to exercise each outstanding option held by such
Optionee.
(iii)
If the Optionee dies while holding an outstanding
option, then the personal representative of his or her estate
or the person or persons to whom the option is transferred
pursuant to the Optionee's will or the laws of inheritance
shall have a twelve (l2)-month period following the date of
the Optionee's death to exercise such
option.
(iv) Under no
circumstances, however, shall any such option be exercisable
after the specified expiration of the option
term.
(v)
During
the applicable post-Service exercise period, the option may
not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date
of the Optionee's cessation of Service. Upon the expiration
of the applicable exercise period or (if earlier) upon the
expiration of the option term, the option shall terminate and
cease to be outstanding for any vested shares for which the
option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service,
terminate and cease to be outstanding with respect to any and
all option shares for which the option is not otherwise at
the time exercisable or in which the Optionee is not
otherwise at that time vested.
(b)
The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any
time while the option remains outstanding, to:
(i)
extend
the period of time for which the option is to remain
exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that
option to such greater period of time as the Plan
Administrator shall deem appropriate, but in no event beyond
the expiration of the option term; and/or
(ii) permit
the option to be exercised, during the applicable post-Service
exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but also with
respect to one or more additional installments in which the
Optionee would have vested under the option had the Optionee
continued in Service.
4
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Shareholder Rights . The holder of an
option shall have no shareholder rights with respect to the shares
subject to the option until such person shall have exercised the
option, paid the exercise price and become a holder of record of
the purchased shares.
5.
Unvested Option
Shares .
The Plan Administrator shall have the discretion to grant options
which are exercisable for unvested shares of Common Stock
("Unvested Option Shares"). Should the Optionee cease Service while
holding such Unvested Option Shares, the Corporation shall have the
right to repurchase, at the exercise price paid per share, all or
(at the discretion of the Corporation and with the consent of the
Optionee) any of those Unvested Option Shares. The terms upon which
such repurchase right shall be exercisable (including the period
and procedure for exercise and the appropriate vesting schedule for
the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such
repurchase right. The Plan Administrator may not impose a vesting
schedule upon any option grant or any shares of Common Stock
subject to the option which is more restrictive than twenty percent
(20%) per year vesting, with the initial vesting to occur not later
than one (1) year after the option grant date.
6.
First
Refusal Rights .
Until such time as the Common Stock is first
registered under Section 12(g) of the 1934 Act, the Corporation
shall have the right of first refusal with respect to any proposed
disposition by the Optionee (or any successor in interest) of any
shares of Common Stock issued under the Plan. Such right of first
refusal shall be exercisable in accordance with the terms
established by the Plan Administrator and set forth in the document
evidencing such right.
7.
Limited Transferability of
Options .
During the lifetime of the Optionee, the
option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of
descent and distribution following the Optionee's
death.
8 .
Withholding .
The Corporation's obligation to deliver shares
of Common Stock upon the exercise of any options granted under the
Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.
The
terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section
B, all the provisions of the Plan shall be applicable to
Incentive Options. Options which are specifically designated
as Non-Statutory Options shall not be subject to the
terms of this Section B.
1.
Eligibility.
Incentive Options may only be granted to
Employees.
2.
Exercise
Price. The exercise price per share shall not
be less than one hundred percent (100%) of the Fair Market
Value per share of Common Stock on the option grant
date.
3.
Dollar Limitation.
The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the
Plan (or any other option plan of the Corporation or any
Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one (1)
calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). 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 options as Incentive
Options shall be applied on the basis of the order in which
such options are granted.
4.
10% Shareholder.
If any Employee to whom an Incentive Option is granted is a
10% Shareholder, then the option term shall not exceed five
(5) years measured from the option grant date.
1. The Plan and
each option outstanding under the Plan at the time of a
Corporate Transaction shall terminate and cease to be
outstanding. However, the outstanding options shall not
terminate and cease to be outstanding if and to the extent
such options are assumed by the successor corporation (or
parent thereof) in the Corporate
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