Exhibit
4
HEALTH SCIENCES GROUP, INC.
2003 STOCK OPTION, DEFERRED STOCK
AND
RESTRICTED STOCK PLAN
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
Any offer or sale of any security covered by this document must
meet each of the following criteria:
(1)
Sales of the security are not made to more than 35 persons,
including persons not in California.
(2)
All purchasers either have a preexisting personal or business
relationship with the Company or any of its officers, directors or
controlling persons, or by reasons of their business or financial
experience or the business or financial experience of their
professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or agent of the
Company, directly or indirectly, could be reasonably assumed to
have the capacity to protect their own interests in connection with
the transaction.
(3)
Each purchaser represents that the purchaser is purchasing for the
purchaser’s own account (or a trust account if the purchaser
is a trustee) and not with a view to or for sale in connection with
any distribution of the security.
(4)
The offer and sale of the security is not accomplished by the
publication of any advertisement. The number of purchasers
referred to above is exclusive of any described or subdivision (i)
of Section 25102 of the California Corporate Securities Act of 1968
or Rule
260.102.13 of the Rules of the California Corporate Commissioner,
any officer, director, or affiliate of the Company and any other
purchaser who the Commissioner designates by rule.
Section 1.
General Purpose of Plan; Definitions.
(a)
This plan is intended to implement and govern the 2003 Stock
Option, Deferred Stock and Restricted Stock Plan (the
“Plan”) of HEALTH SCIENCES GROUP, INC. , (the
“Company”). The Plan was adopted August 7,
2003 by the Board of Directors. The purpose of the Plan
is to enable the Company to obtain and retain competent, employees,
personnel, consultants and service providers who will contribute to
the Company’s success by their ability, ingenuity, industry
and services, and to provide incentives to such personnel,
employees, consultants and service providers and will therefore,
inure to the benefit of all shareholders of the Company.
(b)
For purposes of the Plan, the following terms shall be defined as
set forth below:
(1)
“ Administrator ” means the Board, or if the
Board does not administer the Plan, the Committee, in accordance
with Section 2.
(2)
“ Award ” means any award of Deferred Stock,
Restricted Stock or Stock Options.
(3)
“ Board ” means the Board of Directors of the
Company.
(4)
“ Code ” means the Internal Revenue Code of
1986, as amended from time to time, or any successor thereto.
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(5)
“ Commission ” means the Securities and Exchange
Commission.
(6)
“ Committee ” means the Compensation
Committee of the Board, or any other Committee the Board may
subsequently appoint to administer the Plan. If at any time
the Board shall administer the Plan, then the functions of the
Committee specified in the Plan shall be exercised by the
Board.
(7)
“ Company ” means HEALTH SCIENCES GROUP,
INC. , a corporation organized under the laws of Colorado and
its Subsidiaries (or any successor corporation).
(8)
“ Deferred Stock ” means an award made granted
pursuant to Section 6 below of the right to receive Stock at the
end of a specified deferral period.
(9)
“ Disability ” means permanent and total
disability as determined under the Company’s disability
program or policy, or if such disability program or policy does not
exist, then any disability that renders an Eligible Participant
unable to serve the Company in the capacity for which such Eligible
Participant served immediately prior to such disability.
(10)
“ Effective Date ” shall mean the date provided
pursuant to Section 15.
(11)
“ Eligible Participant ” means an employee,
consultant, advisor, service provider, director (including
non-employee director), or Officer of the Company, eligible to
participate in the Plan pursuant to Section 4, provided however in
the case of a consultant or service provider, such person is (i) a
natural person (ii) provides bona fide services to the Company, and
(iii) the services are not in connection with the offer or sale of
securities in a capital –raising transaction and do not
directly or indirectly promote or maintain a market in the
Company’s securities.
(12)
“ Exchange Act ” means the Securities Exchange
Act of 1934, as amended.
(13)
“ Fair Market Value ” means, as of any given
date, with respect to any Awards granted hereunder, at the
discretion of the Administrator and subject to such limitations as
the Administrator may impose, (A) the closing sales price of the
Stock on such date, or (B) the average of the closing sales price
of the Stock on each day on which the Stock was traded over a
period of up to twenty trading days immediately prior to such date,
or (C) if the Stock is not publicly traded, the fair market value
of the Stock as otherwise determined by the Administrator in the
good faith exercise of its discretion.
(14)
“ Incentive Stock Option ” means any Stock
option intended to be designated as an “incentive stock
option” within the meaning of Section 422 of the Code.
(15)
“ Non-Qualified Stock Option ” means any Stock
Option that is not an Incentive Stock Option, including any Stock
Option that provides (as of the time such option is granted) that
it will not be treated as an Incentive Stock Option.
(16)
“ Officer ” means the Chief Executive Officer,
Chairman of the Board, President, Chief Financial Officer, Chief
Accounting Officer, Chief Operating Officer, any vice president in
charge of a principal business function (such as sales,
administration or finance) and any other person who performs
similar policy-making functions for the Company.
(17)
“ Parent Corporation ” means any corporation
(other than the Company) in an unbroken chain of corporations
ending with the Company, if each of the corporations other than the
Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in the chain.
(18)
“ Participant ” means any Eligible Participant
selected by the Administrator pursuant to the Administrator’s
authority in Section 2 below to receive grants of Stock Options or
Awards or any combination of the foregoing.
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(19)
“ Restricted Period ” means the period set by
the Administrator as it pertains to Deferred Stock or Restricted
Stock awards pursuant to Section 6.
(20)
“ Restricted Stock ” means an award of shares of
Stock granted pursuant to Section 6 subject to restrictions that
will lapse with the passage of time or upon the attainment of
performance objectives, or in consideration of services, in which
case if the shares are registered under Form S-8 and are fully
vested as determined by the Administrator, no restrictions shall be
applicable with respect to such shares.
(21)
“ Securities Act ” means the Securities Act of
1933, as amended.
(22)
“ Stock ” means the Common Stock, $0.001 par
value, of the Company.
(23)
“ Stock Option ” means an option to
purchase shares of Stock granted pursuant to Section 5.
(24)
“ Subsidiary ” means any corporation (other than
the Company) in an unbroken chain of corporations beginning with
the Company, if each of the corporations (other than the last
corporation) in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in the chain.
Section 2.
Administration.
(a)
The Plan shall be administered by the Board or by a Committee
appointed by the Board, which shall serve at the pleasure of the
Board; provided , however , that if the Stock is
registered under Section 12 of the Securities Act and if the
Committee does not consist solely of “Non-Employee
Directors,” as defined in Rule 16b-3 as promulgated by the
Commission under the Exchange Act, and as such Rule may be amended
from time to time, or any successor definition adopted by the
Commission, then the Plan shall be administered, and each grant
shall be approved, by the Board.
(b)
The Administrator shall have the power and authority to grant
to Eligible Participants, pursuant to the terms of the Plan: (i)
Stock Options, (ii) Deferred Stock, (iii) Restricted Stock, or (iv)
any combination of the foregoing.
In particular, the Administrator shall have the authority:
(1)
to select those employees of the Company and others who are
Eligible Participants;
(2)
to determine whether and to what extent Stock Options, Deferred
Stock, Restricted Stock or a combination of the foregoing, are to
be granted to Eligible Participants;
(3)
to determine the number of shares of Stock to be covered by each
such Award;
(4)
to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any such Award including, but not limited to,
(i) the restricted period applicable to Deferred Stock or
Restricted Stock awards, (ii) the date or dates on which
restrictions applicable to such Deferred Stock or Restricted Stock
shall lapse during such period, and (iii) when and in what
increments shares covered by Stock Options may be purchased;
and
(5)
to determine the terms and conditions, not inconsistent with the
terms of the Plan, which shall govern all written instruments
evidencing the Stock Options, Deferred Stock, Restricted Stock or
any combination of the foregoing.
(c)
The Administrator shall have the authority, in its discretion, to
adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem
advisable; to interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreements relating
thereto); and to otherwise supervise the administration of the
Plan.
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(d)
All decisions made by the Administrator pursuant to the provisions
of the Plan shall be final and binding on all persons, including
the Company, any future Subsidiaries or Parent Corporation and the
Participants.
Section 3.
Stock Subject to Plan.
(a)
The total number of shares of Stock reserved and available for
issuance under the Plan shall be 4,200,000 shares subject to annual
increase in the sole discretion of the Board to an amount equal to
30% of the then outstanding fully diluted shares of Common Stock of
the Company. Such shares shall consist of authorized but
unissued shares of Common Stock.
(b)
To the extent that (i) a Stock Option expires or is otherwise
terminated without being exercised or (ii) any shares of Stock
subject to any Deferred Stock or Restricted Stock award granted
hereunder are forfeited, such shares shall again be available for
issuance in connection with future Awards under the Plan. If
any shares of Stock have been pledged as collateral for
indebtedness incurred by a Participant in connection with the
exercise of a Stock Option and such shares are returned to the
Company in satisfaction of such indebtedness, such shares
shall again be available for issuance in connection with future
Awards under the Plan.
(c)
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate
structure affecting the Stock, an appropriate substitution or
adjustment shall be made in (i) the aggregate number of shares
reserved for issuance under the Plan, and (ii) the kind, number and
option price of shares subject to outstanding Stock Options or
Awards granted under the Plan as may be determined by the
Administrator, in its sole discretion, provided that the number of
shares subject to any Award shall always be a whole number.
Such other substitutions or adjustments shall be made as may
be determined by the Administrator, in its sole discretion;
provided , however , that with respect to Incentive
Stock Options, such adjustment shall be made in accordance with
Section 424 of the Code.
Section 4.
Eligibility.
Officers and other employees, directors and consultants and
advisors of the Company, who are responsible for or contribute to
the management, growth and/or profitability of the business of the
Company and service providers shall be eligible to be granted
Non-Qualified Stock Options, Deferred Stock or Restricted Stock
awards hereunder. Officers and other employees of the Company
shall also be eligible to be granted Incentive Stock Options
hereunder. The Participants under the Plan shall be selected
from time to time by the Administrator, in its sole discretion,
from among the persons recommended by the senior management of the
Company, and the Administrator shall determine, in its sole
discretion, the number of shares covered by each Award.
Section 5.
Stock Options for Eligible Employees.
(a)
Stock Options may be granted alone or
in addition to other Awards granted under the Plan. Any Stock
Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of
Stock Option awards need not be the same with respect to each
Optionee. Recipients of Stock Options shall enter into a stock
option agreement with the Company, in such form as the
Administrator shall determine, which agreement shall set forth,
among other things, the exercise price of the option, the term of
the option and provisions regarding exercisability of the option
granted thereunder.
(b)
The Stock Options granted under the Plan may be of two types: (x)
Incentive Stock Options and (y) Non-Qualified Stock Options.
The Administrator shall have the authority under this Section 5 to
grant any Optionee Incentive Stock Options, Non-Qualified
Stock Options, or both types of Stock Options; provided ,
however , that Incentive Stock Options may not be granted to
any individual who is not an employee of the Company. To the
extent that any Stock Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Non-Qualified Stock Option.
More than one option may be granted to the same Optionee and
be outstanding concurrently hereunder.
(c)
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan,
as the Administrator shall, in its sole discretion, deem
desirable:
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(i)
Option Price . The option price per share of Stock
purchasable under an Incentive Stock Option shall be determined by
the Administrator, in its sole discretion, at the time of
grant but shall be not less than 100% of the Fair Market Value of
the Stock on such date. The option price per share of Stock
purchasable under a Non-Qualified Stock Option may be less than
100% of such Fair Market Value as determined by the Administrator.
If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of
the Company and an Incentive Stock Option is granted to such
employee, the option price of such Incentive Stock Option (to the
extent required by the Code at the time of grant) shall be no less
than 110% of the Fair Market Value of the Stock on the date such
Incentive Stock Option is granted.
(ii)
Option Term . The term of each Stock Option shall be
fixed by the Administrator, but no Stock Option shall be
exercisable more than ten years after the date such Stock Option is
granted; provided , however , that if an employee
owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any future Parent
Corporation or any future Subsidiary and an Incentive Stock Option
is granted to such employee, the term of such Incentive Stock
Option (to the extent required by the Code at the time of grant)
shall be no more than five years from the date of grant.
(iii)
Exercisability . Stock Options shall be exercisable as
determined by the Administrator or immediately for shares of
Restricted Stock, if the Administrator so determines, which shall
be subject to the provisions of Section 6 below, and subject to
such terms and conditions as shall be determined by the
Administrator at or after grant; provided ,
however , that such Stock Options shall in any case vest at
least 20% per year over the five-year period commencing from the
date of grant. To the extent not exercised, installments
shall accumulate and be exercisable in whole or in part at any time
after becoming exercisable but not later than the date the Stock
Option expires. The Administrator may provide, in its
discretion, that any Stock Option shall be exercisable only in
installments, and the Administrator may waive such installment
exercise provisions at any time in whole or in part based on such
factors as the Administrator may determine in its sole
discretion.
(iv)
Method of Exercise . Subject to Subsection 5(c)(iii),
Stock Options may be exercised in whole or in part at any time
during the option period by giving written notice of exercise to
the Company specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price in cash or its
cash equivalent, as determined by the Administrator. The
Administrator may, in its sole discretion, accept payment in whole
or in part on behalf of the Company (i) in the form of unrestricted
Stock already owned by the optionee, or, in the case of the
exercise of a Non-Qualified Stock Option, Restricted Stock subject
to an Award hereunder (based, in each case, on the Fair Market
Value of the Stock on the date the option is exercised), (ii) by
cancellation of any indebtedness owed by the Company to the
optionee, (iii) by a full recourse promissory note executed by the
optionee, (iv) by requesting that the Company withhold whole shares
of Common Stock then issuable upon exercise of the Stock Option
(based on the Fair Market Value of the Stock on the date the option
is exercised), (v) by arrangement with a broker which is
acceptable to the Administrator where payment of the option price
is ma
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