INNOCAP, INC.
AMENDED 2017 NON-STATUTORY STOCK OPTION PLAN
1. Purpose of this Plan
This Non-Statutory Stock Option Plan (the “Plan”) is intended as an employment incentive, to aid in attracting and retaining in the employ or service of Innocap, Inc. (the “Company”), a Nevada corporation, and any Affiliated Corporation, persons of experience and ability and whose services are considered valuable, to encourage the sense of proprietorship in such persons, and to stimulate the active interest of such persons in the development and success of the Company. This Plan provides for the issuance of non-statutory stock options (“NSOs” or “Options”) which are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and for grants of common stock (“Stock Grants”).
2. Administration of this Plan
The Company’s Board of Directors (“Board”) may appoint and maintain as administrator of this Plan the Compensation Committee (the “Committee”) of the Board which shall consist of at least three members of the Board. Until such time as the Committee is duly constituted, the Board itself shall have and fulfill the duties herein allocated to the Committee. The Committee shall have full power and authority to designate Plan participants, to determine the provisions and terms of respective NSOs (which need not be identical as to number of shares covered by any NSO, the method of exercise as related to exercise in whole or in installments, or otherwise), including the NSO price, and to interpret the provisions and supervise the administration of this Plan. The Committee may, in its discretion, provide that certain NSOs not vest (that is, become exercisable) until expiration of a certain period after issuance or until other conditions are satisfied, so long as not contrary to this Plan. The Committee shall also have total authority and discretion with respect to the awarding of any Stock Grants.
A majority of the members of the Committee shall constitute a quorum. All decisions and selections made by the Committee pursuant to this Plan’s provisions shall be made by a majority of its members. Any decision reduced to writing and signed by all of the members shall be fully effective as if it had been made by a majority at a meeting duly held. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it deems advisable. If at any time the Board shall consist of seven or more members, then the Board may amend this Plan to provide that the Committee shall consist only of Board members who shall not have been eligible to participate in this Plan (or similar stock or stock option plan) of the Company or its affiliates at any time within one year prior to appointment to the Committee.
All NSOs and Stock Grants granted under this Plan are subject to, and may not be exercised or, in the case of Stock Grants, sold by the recipients thereof before, the approval of this Plan by the holders of a majority of the Company’s outstanding shares, and if such approval is not obtained, all NSOs and Stock Grants previously granted shall be void. Each NSO shall be evidenced by a written agreement containing terms and conditions established by the Committee consistent with the provisions of this Plan.
3. Designation of Participants
The persons eligible for participation in this Plan as recipients of NSOs or Stock Grants shall include full-time and part-time employees (as determined by the Committee) and officers of the Company or of an Affiliated Corporation. In addition, directors of the Company or any Affiliated Corporation who are not employees of the Company or an Affiliated Corporation and any attorney, consultant or other adviser to the Company or any Affiliated Corporation shall be eligible to participate in this Plan. For all purposes of this Plan, any director who is not also a common law employee and is granted an option under this Plan shall be considered an “employee” until the effective date of the director’s resignation or removal from the Board of Directors, including removal due to death or disability. The Committee shall have full power to designate, from among eligible individuals, the persons to whom NSOs or Stock Grants may be granted. A person who has been granted an NSO hereunder may be granted an additional NSO or NSOs or Stock Grant(s), if the Committee shall so determine. Neither the granting of an NSO nor a Stock Grant shall not be construed as a contract of employment or as entitling the recipient thereof to any rights of continued employment.
4. Stock Reserved for this Plan
Subject to adjustment as provided in Paragraph 9 below, a total of 23,000,000 shares of Common Stock (“Stock”), of the Company shall be subject to this Plan. The Stock subject to this Plan shall consist of un-issued shares or previously issued shares reacquired and held by the Company or any Affiliated Corporation, and such amount 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 outstanding NSOs or Stock Grants at the termination of this Plan shall cease to be reserved for the purpose of this Plan, but until termination of this Plan, the Company shall at all times reserve a sufficient number of shares to meet the requirements of this Plan. Should any NSO or Stock Grant expire or be canceled prior to its exercise in full, the unexercised shares theretofore subject to such NSOor Stock Grant may again be subjected to an NSO or Stock Grant under this Plan.
5. Option Price
The purchase price of each share of Stock placed under NSO shall be determined by the Board but not be less than ten percent (10%) of the fair market value of such share on the date the NSO is granted or more than the fair market value of such share on the date the NSO is granted. The fair market value of a share on a particular date shall be deemed to be the average of either (i) the highest and lowest prices at which shares were sold on the date of grant, if traded on a national securities exchange, (ii) the high and low prices reported in the consolidated reporting system, if traded on a “last sale reported” system, such as NASDAQ, or (iii) the high bid and high asked price for over-the-counter securities. If no transactions in the Stock occur on the date of grant, the fair market value shall be determined as of the next earliest day for which reports or quotations are available. If the common shares are not then quoted on any exchange or in any quotation medium at the time the option is granted, then the Board of Directors or Committee will use its discretion in selecting a good faith value believed to represent fair market value based on factors then known to them. The cash proceeds from the sale of Stock are to be added to the general funds of the Company.
6. Exercise Period
1)Upon termination of the optionee’s employment with the Company for cause;
3)At the expiration of fifteen (15) months after the date of death of the optioned.
7. Exercise of Options
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8. Assignability
No NSO shall be assignable or otherwise transferable (by the optioned or otherwise) except by will or the laws of descent and distribution or except as permitted in accordance with SEC Release No.33-7646 as effective April 7, 1999 and in particular that portion thereof which expands upon transferability as is contained in Article III entitled “Transferable Options and Proxy Reporting” as indicated in Section A 1 through 4 inclusive and Section B thereof. No NSO shall be pledged or hypothecated in any manner, whether by operation of law or otherwise, nor be subject to execution, attachment or similar process.
9. Reorganizations and Recapitalizations of the Company
10. Purchase for Investment
Unless the shares of Stock covered by this Plan have been registered under the Securities Act of 1933, as amended, each person exercising an NSO under this Plan may be required by the Company to give a representation in writing that he is acquiring such shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof.
11. Effective Date and Expiration of this Plan
This Plan shall be effective as of June 29, 2017, the date of its adoption by the Board, subject to the approval of the Company’s shareholders, and no NSO shall be granted pursuant to this Plan after its expiration. This Plan shall expire on June 29, 2027 except as to NSOs then outstanding, which shall remain in effect until they have expired or been exercised.
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12. Amendments or Termination
The Board may amend, alter or discontinue this Plan at any time in such respects as it shall deem advisable in order to conform to any change in any other applicable law, or in order to comply with the provisions of any rule or regulation of the Securities and Exchange Commission required to exempt this Plan or any NSOs granted thereunder from the operation of Section 16(b) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or in any other respect not inconsistent with Section 16(b) of the Exchange Act; provided, that no amendment or alteration shall be made which would impair the rights of any participant under any NSO or Stock Grant theretofore granted, without his consent (unless made solely to conform such NSO to, and necessary because of, changes in the foregoing laws, rules or regulations), and except that no amendment or alteration shall be made without the approval of shareholders which would:
b)Extend the NSO period provided for in Paragraph 6; or
c)Materially increase the benefits accruing to participants under this Plan; or
d)Materially modify the requirements as to eligibility for participation in this Plan; or
e)Extend the expiration date of this Plan as set forth in Paragraph 11.
13. Government Regulations
This Plan, and the granting and exercise of NSOs or the award of Stock Grants hereunder, and the obligation of the Company to sell and deliver shares of Stock under such NSOs, shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
14. Liability
No member of the Board of Directors, the Committee or officers or employees of the Company or any Affiliated Corporation shall be personally liable for any action, omission or determination made in good faith in connection with this Plan.
15. Miscellaneous.
The term “Affiliated Corporation” used herein shall mean any Parent or Subsidiary.
16. Options in Substitution for Other Options
The Committee may, in its sole discretion, at any time during the term of this Plan, grant new options to an employee under this Plan or any other stock option plan of the Company on the condition that such employee shall surrender for cancellation one or more outstanding options which represent the right to purchase (after giving effect to any previous partial exercise thereof) a number of shares, in relation to the number of shares to be covered by the new conditional grant hereunder, determined by the Committee. If the Committee shall have so determined to grant such new options on such a conditional basis (“New Conditional Options”), no such New Conditional Option shall become exercisable in the absence of such employee’s consent to the condition and surrender and cancellation as appropriate. New Conditional Options shall be treated in all respects under this Plan as newly granted options. Option may be granted under this Plan from time to time in substitution for similar rights held by employees of other corporations who are about to become employees of the Company or an Affiliated Corporation, or the merger or consolidation of the employing corporation with the Company or an Affiliated Corporation, or the acquisition by the Company or an Affiliated Corporation of the assets of the employing corporation, or the acquisition by the Company or an Affiliated Corporation of stock of the employing corporation as the result of which it becomes an Affiliated Corporation.
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17. Withholding Taxes
Pursuant to applicable federal and state laws, the Company may be required to collect withholding taxes upon the exercise of a NSO. The Company may require, as a condition to the exercise of a NSO, that the optioned concurrently pay to the Company the entire amount or a portion of any taxes which the Company is required to withhold by reason of such exercise, in such amount as the Committee or the Company in its discretion may determine. In lieu of part or all of any such payment, the optioned may elect to have the Company withhold from the shares to be issued upon exercise of the option that number of shares having a Fair Market Value equal to the amount which the Company is required to withhold.
18. Transferability in accordance With SEC Release No. 33-7646 entitled “Registration of Securities on Form S-8” as effective April 7, 1999
Notwithstanding anything to the contrary as may be contained in this Plan regarding rights as to transferability or lack thereof, all options granted hereunder may and shall be transferable to the extent permitted in accordance with SEC Release No. 33-7646 entitled “Registration of Securities on Form S-8” as effective April 7, 1999 and in particular in accordance with that portion of such Release which expands Form S-8 to include stock option exercise by family members so that the rules governing the use of Form S-8 (a) do not impede legitimate intra family transfer of options and (b) may facilitate transfer for estate planning purposes - all as more specifically defined in Article III, Sections A and B thereto, the contents of which are herewith incorporated by reference.
CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that the foregoing Innocap, Inc. Non-Statutory Stock Option Plan was duly approved by the requisite number of holders of the issued and outstanding Common Stock of this corporation as of January 23, 2018.
/s/ Paul Tidwell
By: Paul Tidwell President and Chief Financial Officer
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