BIOFORCE NANOSCIENCES, INC.
2003 STOCK OPTION PLAN
This 2003 Stock Option Plan (this "Plan") of BioForce Nanosciences,
Inc. (the
"Company") is hereby established and provides for options (the
"Option" or
"Options") for the purchase of shares of the Company's common
stock, with a par
value of $0.01 per share ("Common Stock"). The Company intends that
the Options
will be either Incentive Stock Options ("ISOs"), which qualify
under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or
options not
qualifying under Section 422 of the Code ("NQSOs").
1) Purpose
of this Plan. The Company believes it is desirable and in its
best
interest
to adopt a stock option plan to aid in attracting, developing
and
retaining
employees ("Employees") and others who are not employees,
including
nonemployee officers ("Officers"), directors ("Directors"), and
consultants ("Consultants") of the Company and any subsidiary of
the
Company
now or hereafter created by the Company (the "Subsidiary" or
"Subsidiaries") capable of contributing to the future growth
and
operations
of the Company or any Subsidiary (each Employee, Director,
Officer
and Consultant who receives an Option pursuant to this Plan is
referred
to as an "Option Holder").
2)
Administration of this Plan.
a)
Plan
Administrator. The Board of Directors of the Company (the
"Board") shall administer this Plan, except that the Board may,
in
its discretion, appoint a Committee (the "Committee") consisting
of
members of the Board that shall administer this Plan. Any such
Committee shall have such powers and authority as the Board may
delegate to it. The Board or the Committee that administers
this
Plan shall be referred to as the "Plan Administrator."
b)
Effective
Date and Term. Subject to approval of the stockholders of
the Company, the effective date of this Plan shall be as of
January
1, 2003. This Plan shall remain in effect subject to the terms
hereof, until the earlier of the following: (1) December 31,
2012;
(2) termination of this Plan by the Board; or (3) the purchase
of
all shares to be delivered pursuant to this Plan.
c)
Plan
Interpretation. The Plan Administrator shall construe and
interpret this Plan, establish such rules as it deems necessary
for
the proper administration of this Plan and make such
determinations
and take such other action in connection with this Plan as it
deems
necessary and advisable. Subject to the terms of this Plan, the
Plan
Administrator shall decide the individuals to whom and the time
or
times at which Options shall be granted, the number of shares to
be
subject to each Option, the duration of the Options, the Option
exercise price, and whether an Option is an ISO or NQSO. Any
Options
to be granted under this Plan must be granted within ten years
from
the effective date of this Plan.
d)
No
Liability. The Plan Administrator (or any member thereof) shall
not be liable for any action or determination made in good
faith
with respect to this Plan or any Option granted under it.
3) Maximum
Number of Options Subject to this Plan. The shares to be
offered
under this
Plan may be, in whole or in part, authorized but unissued
shares of
Common Stock or issued shares of Common Stock that have been
reacquired
by the Company. The aggregate number of shares of Common Stock
to be
delivered upon exercise of all Options granted under this Plan
shall
not exceed
One Million (1,000,000) shares of Common Stock as of the date
of this
Plan (as adjusted for any stock split, stock dividend, or share
reclassification). If any Option granted hereunder shall
expire,
terminate,
or be forfeited for any reason without having been exercised in
full, the
shares of Common Stock subject to such Option not purchased may
again be
granted under this Plan unless this Plan shall have been
terminated.
<PAGE>
4)
Selection of Option Recipients. The Plan Administrator, from time
to time,
subject to
the terms and provisions of this Plan, may grant Options to
such
present and future key Employees, Officers, Directors and
Consultants
of the
Company, and of its Subsidiaries, as it shall determine. In
determining the persons to whom Options shall be granted and the
number of
shares
available under each Option, the Plan Administrator may take
into
account
the nature of the services rendered by such persons, their
present
and
potential contributions to the success and growth of the Company
and
such other
factors as the Plan Administrator, in its discretion, shall
deem
relevant.
5) Option
Requirements. The Options granted pursuant to this Plan shall
be
authorized
by the Plan Administrator and shall be evidenced by an Option
Agreement
that shall include the following terms and conditions:
a)
Option
Holder and Option Grant Date. Each Option Agreement shall
state the name of the Option Holder and the date on which the
Option
was granted.
b)
Exercise
Price. Each Option Agreement shall state the Option
exercise price, as determined by the Plan Administrator. The
per
share exercise price for an ISO shall not be less than the fair
market value per share of Common Stock at the date of grant as
determined by the Plan Administrator in good faith; provided,
further, that with respect to ISOs granted to stockholders
owning
greater than 10% of the issued and outstanding shares of Common
Stock, the exercise price per share shall not be less than 110%
of
the fair market value per share of Common Stock at the date of
grant.
c)
Number of
Shares. Each Option Agreement shall state the number of
shares of Common Stock available for purchase under such Option
Agreement.
d)
Type of
Option. Each Option Agreement shall state whether the Option
is an ISO or an NQSO, or combination thereof. ISOs shall be
granted
only to Employees. The aggregate fair market value (determined
at
the date of grant) of the stock with respect to which ISOs are
exercisable by the Option Holder during any calendar year
(granted
under this Plan and all other ISO plans of the Company, a
related
corporation or a predecessor corporation) shall not exceed
$100,000
or such other limit as may be prescribed by the Code, as
amended
from time to time. Any Option that is identified as an ISO but
exceeds the above annual limit or otherwise fails to qualify
for
treatment as an ISO shall not be void but rather shall be a NQSO
to
the extent it exceeds such annual limit or otherwise fails to
qualify for such treatment.
e)
Payment.
Each Option Agreement shall state that the Option exercise
price shall be payable
upon the exercise of the Option and shall be
paid in cash or by check in United States Dollars. In addition,
if
provided in the Option Agreement and upon approval of the Plan
Administrator, an Option Holder may pay for all or any portion
of
the aggregate Option exercise price for any shares of Common
Stock
purchased upon the exercise of any Option by delivering to the
Company shares of Common Stock previously held by such Option
Holder
or, with the prior consent of the Plan Administrator, by having
shares withheld from the amount of shares of Common Stock to be
received by the Option Holder upon exercise of the Option. The
shares of Common Stock received or withheld by the Company as
payment for shares of Common Stock purchased upon the exercise of
an
Option shall have a fair market value at the date of exercise
(as
determined by the Plan Administrator) equal to the aggregate
Option
exercise price (or portion thereof) to be paid through the
exchange
of previously held shares of Common Stock or through the
withholding
of shares of Common Stock to be received by the Option Holder
upon
exercise. In addition, upon approval by the Plan Administrator,
the
Company may lend an amount equal to the Option exercise price to
an
Option Holder on terms approved by the Plan Administrator.
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<PAGE>
f)
Duration
of Options. Each Option to be granted may be exercised
within such period as may be determined by the Plan
Administrator.
The expiration date of the Option, shall not be later than ten
years
from the date of grant; provided, however, that the expiration
date
of any ISO granted to a stockholder owning more than ten
percent
(10%) of the issued and outstanding shares shall not be a term
that
is greater than five years from the date of grant.
g)
Vesting of
Options. An Option Agreement may contain a vesting
schedule (that may be different for each Option Holder) as
determined by the Plan Administrator. The Plan Administrator
may
accelerate the vesting at such times and in such amounts as it
shall
determine in its sole discretion.
h)
Exercise
of Options. Each Option Holder shall have the right to
exercise his or her Option in the manner specified in the
Option
Agreement evidencing the granting of such Option. The time period
in
which the Option Holder has a vested right (that has not
terminated
or been forfeited) to purchase shares of Common Stock under an
Option Agreement is referred to as the "Option Period."
i)
Method of
Exercise. Each Option shall be exercised pursuant to the
terms of this Plan by giving written notice to the Company at
its
principal place of business. The form of such notice shall be
substantially similar to the Exercise Notice contained in Exhibit
A
and shall include the Investment Representation Statement
contained
in Exhibit B signed by the Option Holder. No portion of any
Option
may be exercised for less than five hundred (500) shares or
such
other number of shares as the Plan Administrator determines
from
time to time, provided that if the vested portion of any Option
is
less than such number of shares, the Option may be exercised
with
respect to all shares for which it is vested. The Company shall
make
delivery of such shares as set forth in the Option Agreement;
provided, however, that if any law or regulation requires the
Company to take action with respect to the shares specified in
such
notice before issuance thereof, the date of delivery of such
shares
shall then be extended for the period necessary to take such
action.
The Company shall not be obligated to issue, transfer, or deliver
a
certificate of Common Stock to any Option Holder, or to such
Option
Holder's personal representative, until the aggregate Option
price
has been paid for all shares for which the Option shall have
been
exercised.
j)
Securities
Law Requirements. No Option granted under this Plan may
be exercised unless, at the time of exercise, Common Stock to
be
issued qualifies for exemption from, or is registered pursuant
to,
applicable federal and state securities laws. In the event
there
shall not then be on file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, an
effective registration statement, including a prospectus relating
to
the shares subject to the Option, the Plan Administrator may
require
the Option Holder to execute and deliver to the Company prior
to
receipt by such Option Holder of any such shares under this Plan,
in
addition to the Investment Representation Statement, an
investment
letter in form and substance satisfactory to the Company.
k)
Withholding. As a condition to the exercise of any Option
granted
hereunder, the Option Holder shall make such arrangements as
the
Plan Administrator may require for the satisfaction of any
federal,
state or local withholding tax obligations that may arise in
connection with such exercise. Such arrangements may include
the
deduction of any such required withholding from any payments due
or
to become due to the Option Holder.
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<PAGE>
l)
Reload
Option. If an Option Agreement provides, the Plan
Administrator permits, and an Option Holder pays for all or any
portion of the aggregate Option exercise price with shares of
Common
Stock or withholding a number of shares upon exercise of an
Option
pursuant to Section 5(e), the Plan Administrator may grant
reload
Options. Such reload Options may grant the Option Holder a new
Option Agreement for the number of shares of Common Stock equal
to
the number tendered as consideration for the purchase of shares
under the former Option Agreement under terms satisfactory to
the
Plan Administrator.
m)
Other
Conditions, Restriction, Contingencies. Each Option Agreement
shall specify the other conditions, restrictions and
contingencies
to which the Option is subject as deemed necessary or appropriate
by
the Plan Administrator.
6)
Stockholders Agreement. As a condition of the exercising of any
Option
granted
pursuant to this Plan, in whole or in part, the Plan
Administrator
may
require the Option Holder to execute the Stockholders Agreement,
the
form of
which shall be substantially similar to the one attached hereto
in
Exhibit
C.
7) Limited
Transferability of Options. During the Option Holder's
lifetime,
only the
Option Holder may exercise Options. Options shall not be
transferable other than by will or the laws of descent and
distribution
and shall
terminate as provided under this Plan and as specified in the
Option
Agreement.
8) Status
as Stockholder. Neither the Option Holder nor the Option
Holder's
executor,
administrator, heirs, legatees, or successors shall be or have
any rights
or privileges of a stockholder of the Company solely by reason
of holding any Option,
unless and until the Option has been exercised and
certificates representing such shares shall have been issued and
delivered
to the
Option Holder.
9)
Effective Date of Termination of Employment. Termination of
employment
shall be
considered to have occurred on the earlier of the last day of
performance of services or the first date written notice of
termination is
given by
either the Company or its Subsidiary without regard to the
actual
last day
of performance of services, whichever occurs first. A leave of
absence
approved in writing by the Board shall not
