DIGICORP
STOCK OPTION AND RESTRICTED STOCK PLAN
1. PURPOSE OF THE PLAN
The
purpose of this Stock Option and Restricted Stock Plan (this "Plan")
is to advance the interests of Digicorp
(the "Company") and its subsidiaries by
providing to key employees of the Company and its subsidiaries who have
substantial responsibility for the direction
and management of the Company, as
well as certain directors and consultants
of the Company, additional incentives,
to the extent permitted by law, to exert their best efforts on behalf of the
Company, to increase their proprietary
interest in the
success of the Company,
to reward outstanding performance and to provide a means
to attract and retain
persons of outstanding ability to the service of the
Company. It is
recognized
that the Company cannot attract or retain these individuals without this
compensation. Options granted under this Plan may qualify as
incentive stock
options ("ISOs"), as defined in Section 422 of the
Internal Revenue Code of
1986, as amended (the "Code").
2. ADMINISTRATION
This Plan
shall be administered by a committee (the "Committee")
comprised
of at least two (2) members of the
Company's Board of Directors ("Board") who
each shall (a) be a "non-employee director," as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended, unless
administration of the Plan by "non-employee
directors" is not then
required for
transactions under the Plan to be exempt from
the requirements of Rule 16b, and
(b) be an "outside director" as defined
under Section 162(m) of the Code, unless
the action taken pursuant to the Plan is not
required to be taken
by "outside
directors" to qualify for tax deductibility under Section 162(m) of the Code.
The Committee shall interpret this Plan and, to the extent and
in the manner
contemplated herein, shall exercise the
discretion reserved to it hereunder. The
Committee may prescribe, amend and rescind rules and
regulations
relating to
this Plan and to make all other
determinations necessary for its administration.
The decision of the Committee on any interpretation of this Plan or
administration hereof, if in compliance with the provisions of the Act and
regulations promulgated thereunder, shall be final and binding with
respect to
the Company, any optionee, warrant holder or any person
claiming to have rights
as, or on behalf of, any optionee or
warrant holder.
3. SHARES SUBJECT TO THE PLAN
The shares
subject to option,
warrant grant and the
other provisions
of
this Plan shall be shares of the Company's
common stock, par value $0.001 per
share ("shares"). Subject to the provisions hereof
concerning adjustment,
the
total number of shares that may be
purchased upon the exercise or surrender
of
stock options granted under this Plan shall not exceed
the greater of
thirty
percent (30%) of the total number of shares
authorized and outstanding as of the
most recent quarterly period ended or
15,000,000 REDUCED BY the number of shares
with respect to which restricted stock is awarded. The total number of shares
that may be awarded as restricted shares
under this Plan shall not exceed twenty
percent (20%) of the total number of shares
subject to the Plan. Any shares that
are authorized for issuance pursuant to the exercise of
options may be issued
upon the exercise of ISOs. In the event any option or warrant
shall cease to be
exercisable in whole or in part for any
reason, the shares which were covered by
such option or warrant, but as to which the option or warrant had not been
exercised, shall again be available under
this Plan. Similarly, any shares that
were granted pursuant to an award of restricted
stock under this Plan
but that
are forfeited pursuant to the terms of the Plan or an
award agreement
shall
again be available under this Plan. In addition, shares not delivered to
participants in connection with the stock-for-stock exercise of an option or
warrant shall again be available
under this Plan.
Shares may be made
available
from authorized, un-issued or reacquired
stock or partly from each.
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4. PARTICIPANTS
(A)
Key Employees, Directors and Consultants. The Committee shall
determine and designate from time to time those key
employees,
directors and
consultants of the Company and its subsidiaries who shall be eligible to
participate in this Plan. The Committee shall also determine the number of
shares to be offered from time to time to
each participant,
either pursuant to
an option, pursuant to a warrant or
pursuant to an award of restricted stock, or
either. In making these determinations, the Committee shall take into
account
the past service of each such key employee, director or consultant to the
Company and its subsidiaries, the present and potential
contributions of
such
key employee, director or consultant to the success of the Company and its
subsidiaries and such other factors as the Committee shall deem relevant in
connection with accomplishing the purposes of this Plan. The agreement
documenting the award of any option, warrant or restricted stock granted
pursuant to this Plan shall contain such terms and
conditions as the
Committee
shall deem advisable, including but not limited to being
vested or exercisable,
as the case may be, only in such
installments as the Committee may determine.
(B) Award
Agreements. All
options, warrants and
restricted stock granted
under the Plan will be evidenced by an
agreement. Agreements
evidencing awards
made to different participants or at different times need not contain similar
provisions. Options that are intended to be
ISOs will be designated as such; any
option not so designated will be treated as
a nonqualified stock option.
5. OPTION/WARRANT PRICE
Each
agreement representing an award of options or warrants
shall state
the price at which the subject option or warrant may be
exercised, which
shall
not be less than the current fair market value of the shares at the date of
issuance of an option or warrant; provided,
however, that the
exercise price of
any option that is intended to be an ISO and
that is granted to a holder of 10%
or more of the Company's shares shall not
be less than 110% of such current fair
market value. For purposes of this Plan,
the fair market value
of any Share as
of any date shall
