EARTHBLOCK TECHNOLOGIES,
INC.
2006 DIRECTORS, OFFICERS AND
CONSULTANTS
STOCK OPTION, STOCK WARRANT AND STOCK AWARD PLAN
SECTION 1.
PURPOSE OF THE PLAN. The
purpose of the 2006 Directors, Officers and Consultants Stock
Option, Stock Warrant and Stock Award Plan (“Plan”) is
to maintain the ability of Earthblock Technologies, Inc., a Nevada
corporation (the “Company”) and its subsidiaries to
attract and retain highly qualified and experienced directors,
employees and consultants and to give such directors, employees and
consultants a continued proprietary interest in the success of the
Company and its subsidiaries. In addition the Plan is intended to
encourage ownership of common stock, $.001 par value (“Common
Stock”), of the Company by the directors, employees and
consultants of the Company and its Affiliates (as defined below)
and to provide increased incentive for such persons to render
services and to exert maximum effort for the success of the
Company’s business. The Plan provides eligible employees and
consultants the opportunity to participate in the enhancement of
shareholder value by the grants of warrants, options, restricted
common or convertible preferred stock, unrestricted common or
convertible preferred stock and other awards under this Plan and to
have their bonuses and/or consulting fees payable in warrants,
restricted common or convertible preferred stock, unrestricted
common or convertible preferred stock and other awards, or any
combination thereof. In addition, the Company expects that the Plan
will further strengthen the identification of the directors,
employees and consultants with the stockholders. Certain options
and warrants to be granted under this Plan are intended to qualify
as Incentive Stock Options (“ISOs”) pursuant to
Section 422 of the Internal Revenue Code of 1986, as amended
(“Code”), while other options and warrants and
preferred stock granted under this Plan will be nonqualified
options or warrants which are not intended to qualify as ISOs
(“Nonqualified Options”), either or both as provided in
the agreements evidencing the options or warrants described in
Section 5 hereof and shares of preferred stock. As provided in
the designation described in Section 7. Employees, consultants
and directors who participate or become eligible to participate in
this Plan from time to time are referred to collectively herein as
“Participants”. As used in this Plan, the term
“Affiliates” means any “parent corporation”
of the Company and any “subsidiary corporation” of the
Company within the meaning of Code Sections 424(e) and (f),
respectively.
SECTION 2.
ADMINISTRATION OF THE PLAN.
(a) Composition of Committee. The Plan
shall be administered by the Board of Directors of the Company (the
“Board”). When acting in such capacity the Board is
herein referred to as the “Committee,” which shall also
designate the Chairman of the Committee. If the Company is governed
by Rule 16b-3 promulgated by the Securities and Exchange
Commission (“Commission”) pursuant to the Securities
Exchange Act of 1934, as amended (“Exchange Act”), no
director shall serve as a member of the Committee unless he or she
is a “disinterested person” within the meaning of such
Rule 16b-3.
(b) Committee Action. The Committee shall
hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum, and all
determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to
writing and signed by a majority of the members shall be fully as
effective as if it had been made by a majority vote of its members
at a meeting duly called and held. The Committee may designate the
Secretary of the Company or other Company employees to assist the
Committee in the administration of the Plan, and may grant
authority to such persons to execute award agreements or other
documents on behalf of the Committee and the Company. Any duly
constituted committee of the Board satisfying the qualifications of
this Section 2 may be appointed as the Committee.
(c) Committee Expenses. All expenses and
liabilities incurred by the Committee in the administration of the
Plan shall be borne by the Company. The Committee may employ
attorneys, consultants, accountants or other persons.
SECTION 3.
STOCK RESERVED FOR THE PLAN. Subject to adjustment as provided in
Section 5(d)(xiii) hereof, the aggregate number of shares of
Common Stock that may be optioned, subject to conversion or issued
under the Plan is 45,000,000. The shares subject to the Plan shall
consist of authorized but unissued shares of Common Stock and such
number of shares shall be and is hereby reserved for sale for such
purpose. Any of such shares which may remain unsold and which are
not subject to issuance upon exercise of outstanding options or
warrants or conversion of outstanding shares of preferred stock at
the termination of the Plan shall cease to be reserved for the
purpose of the Plan, but until termination of the Plan or the
termination of the last of the options or warrants granted under
the Plan, whichever last occurs, the Company shall at all times
reserve a sufficient number of shares to meet the requirements of
the Plan. Should any option or warrant expire or be cancelled prior
to its exercise in full, the shares theretofore subject to such
option or warrant may again be made subject to an option, warrant
or shares of convertible preferred stock under the Plan.
Immediately
upon the grant of any option, warrant, shares of preferred stock or
award, the number of shares of Common Stock that may be issued or
optioned under the Plan will be increased. The number of shares of
such increase shall be an amount such that immediately after such
increase the total number of shares issuable under the Plan and
reserved for issuance upon exercise of outstanding options,
warrants or conversion of shares of preferred stock will equal 15%
of the total number of issued and outstanding shares of Common
Stock of the Company. Such increase in the number of shares subject
to the Plan shall occur without the necessity of any further
corporate action of any kind or character.
SECTION 4.
ELIGIBILITY. The
Participants shall include directors, employees, including
officers, of the Company and its divisions and subsidiaries, and
consultants and attorneys who provide bona fide services to the
Company. Participants are eligible to be granted warrants, options,
restricted common or convertible preferred stock, unrestricted
common or convertible preferred stock and other awards under this
Plan and to have their bonuses and/or consulting fees payable in
warrants, restricted common or convertible preferred stock,
unrestricted common or convertible preferred stock and other
awards. A Participant who has been granted an option, warrant or
preferred stock hereunder may be granted an additional option,
warrant options, warrants or preferred stock, if the Committee
shall so determine.
SECTION 5.
GRANT OF OPTIONS OR WARRANTS.
(a) Committee Discretion. The Committee
shall have sole and absolute discretionary authority (i) to
determine, authorize, and designate those persons pursuant to this
Plan who are to receive warrants, options, restricted common or
convertible preferred stock, or unrestricted common or convertible
preferred stock under the Plan, (ii) to determine the number
of shares of Common Stock to be covered by such grant or such
options or warrants and the terms thereof, (iii) to determine
the type of Common Stock granted: restricted common or convertible
preferred stock, unrestricted common or convertible preferred stock
or a combination of restricted and unrestricted common or
convertible preferred stock, and (iv) to determine the type of
option or warrant granted: ISO, Nonqualified Option or a
combination of ISO and Nonqualified Options. The Committee shall
thereupon grant options or warrants in accordance with such
determinations as evidenced by a written option or warrant
agreement. Subject to the express provisions of the Plan, the
Committee shall have discretionary authority to prescribe, amend
and rescind rules and regulations relating to the Plan, to
interpret the Plan, to prescribe and amend the terms of the option
or warrant agreements (which need not be identical) and to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
(b) Stockholder Approval. All ISOs granted
under this Plan are subject to, and may not be exercised before,
the approval of this Plan by the stockholders prior to the first
anniversary date of the Board meeting held to approve the Plan, by
the affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by proxy,
and entitled to vote thereat, or by written consent in accordance
with the laws of the State of Nevada, provided that if such
approval by the stockholders of the Company is not forthcoming, all
options or warrants and stock awards previously granted under this
Plan other than ISOs shall be valid in all respects.
(c) Limitation on Incentive Stock Options
and Warrants. The aggregate fair market value (determined in
accordance with Section 5(d)(ii) of this Plan at the time the
option or warrant is granted) of the Common Stock with respect
to
which ISOs may
be exercisable for the first time by any Participant during any
calendar year under all such plans of the Company and its
Affiliates shall not exceed $1,000,000.
(d) Terms
and Conditions. Each option or warrant granted under the Plan shall
be evidenced by an agreement, in a form approved by the Committee,
which shall be subject to the following express terms and
conditions and to such other terms and conditions as the Committee
may deem appropriate:
(i) Option
or Warrant Period. The Committee shall promptly notify the
Participant of the option or warrant grant and a written agreement
shall promptly be executed and delivered by and on behalf of the
Company and the Participant, provided that the option or warrant
grant shall expire if a written agreement is not signed by said
Participant (or his agent or attorney) and returned to the Company
within 60 days from date of receipt by the Participant of such
agreement. The date of grant shall be the date the option or
warrant is actually granted by the Committee, even though the
written agreement may be executed and delivered by the Company and
the Participant after that date. Each option or warrant agreement
shall specify the period for which the option or warrant thereunder
is granted (which in no event shall exceed ten years from the date
of grant) and shall provide that the option or warrant shall expire
at the end of such period. If the original term of an option or
warrant is less than ten years from the date of grant, the option
or warrant may be amended prior to its expiration, with the
approval of the Committee and the Participant, to extend the term
so that the term as amended is not more than ten years from the
date of grant. However, in the case of an ISO granted to an
individual who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all
classes of stock of the Company or its Affiliate (“Ten
Percent Stockholder”), such period shall not exceed five
years from the date of grant.
(ii) Option or Warrant Price. The purchase
price of each share of Common Stock subject to each option or
warrant granted pursuant to the Plan shall be determined by the
Committee at the time the option or warrant is granted and, in the
case of ISOs, shall not be less than 100% of the fair market value
of a share of Common Stock on the date the option or warrant is
granted, as determined by the Committee. In the case of an ISO
granted to a Ten Percent Stockholder, the option or warrant price
shall not be less than 110% of the fair market value of a share of
Common Stock on the date the option or warrant is granted. The
purchase price of each share of Common Stock subject to a
Nonqualified Option or Warrant under this Plan shall be determined
by the Committee prior to granting the option or warrant. The
Committee shall set the purchase price for each share subject to a
Nonqualified Option or Warrant at either the fair market value of
each share on the date the option or warrant is granted, or at such
other price as the Committee in its sole discretion shall
determine.
At the time a
determination of the fair market value of a share of Common Stock
is required to be made hereunder, the determination of its fair
market value shall be made by the Committee in such manner as it
deems appropriate.
(iii) Exercise Period. The Committee may
provide in the option or warrant agreement that an option or
warrant may be exercised in whole, immediately, or is to be
exercisable in increments. In addition, the Committee may provide
that the exercise of all or part of an option or warrant is subject
to specified performance by the Participant.
(iv) Procedure for Exercise. Options or
warrants shall be exercised in the manner specified in the option
or warrant agreement. The notice of exercise shall specify the
address to which the certificates for such shares are to be mailed.
A Participant shall be deemed to be a stockholder with respect to
shares covered by an option or warrant on the date specified in the
option or warrant agreement. As promptly as practicable, the
Company shall deliver to the Participant or other holder of the
warrant, certificates for the number of shares with respect to
which such option or warrant has been so exercised, issued in the
holder’s name or such other name as holder directs; provided,
however, that such delivery shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have
deposited such certificates with a carrier for overnight delivery,
addressed to the holder at the address specified pursuant to this
Section 6(d).
(v) Termination of Employment. If an
executive officer to whom an option or warrant is granted ceases to
be employed by the Company for any reason other than death or
disability, any option or warrant which is exercisable on the date
of such termination of employment may be exercised during a period
beginning on such date and ending at the time set forth in the
option or warrant agreement; provided, however, that if a
Participant’s employment is terminated because of the
Participant’s theft or embezzlement from the Company,
disclosure of trade secrets of the Company or the commission of a
willful, felonious act while in the employment of the Company (such
reasons shall hereinafter be
collectively
referred to as “for cause”), then any option or warrant
or unexercised portion thereof granted to said Participant shall
expire upon such termination of employment. Notwithstanding the
foregoing, no ISO may be exercised later than three months after an
employee’s termination of employment for any reason other
than death or disability.
(vi) Disability or Death of Participant. In
the event of the determination of disability or death of a
Participant under the Plan while he or she is employed by the
Company, the options or warrants previously granted to him may be
exercised (to the extent he or she would have been entitled to do
so at the date of the determination of disability or death) at any
time and from time to time, within a period beginning on the date
of such determination of disability or death and ending at the time
set forth in the option or warrant agreement, by the former
employee, the guardian of his estate, the executor or administrator
of his estate or by the person or persons to whom his rights under
the option or warrant shall pass by will or the laws of descent and
distribution, but in no event may the option or warrant be
exercised after its expiration under the terms of the option or
warrant agreement. Notwithstanding the foregoing, no ISO may be
exercised later than one year after the determination of disability
or death. A Participant shall be deemed to be disabled if, in the
opinion of a physician selected by the Committee, he or she is
incapable of performing services for the Company of the kind he or
she was performing at the time the disability occurred by reason of
any medically determinable physical or mental impairment which can
be expected to result in death or to be of long, continued and
indefinite duration. The date of determination of disability for
purposes hereof shall be the date of such determination by such
physician.
(vii) Assignability. An option or warrant
shall be assignable o
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