UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
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August 5, 2015
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VIASPACE Inc.
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(Exact name of registrant as specified in its charter)
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Nevada
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333-110680
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76-0742386
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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382 N. Lemon Ave., Ste. 364, Walnut, California
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91789
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
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626-768-3360
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Not Applicable
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Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 5, 2015, the Board of Directors and holders of a majority of voting securities of VIASPACE Inc. (the "Company") approved the 2015 Stock Incentive Plan, or the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock appreciation rights, dividend equivalent right, performance stock awards, performance cash awards, and other stock-based awards, collectively, the "stock awards." Stock awards may be granted under the 2015 Plan to our employees, directors and consultants.
The maximum number of shares of common stock available for issuance under the 2015 Plan is 800,000,000 shares. The shares of common stock subject to stock awards granted under the 2015 Plan (including any awards granted under the Prior Plans) that expire, are forfeited because of a failure to vest, or otherwise terminate without being exercised in full will return to the 2015 Plan and be available for issuance under the 2015 Plan. 175,000,000 shares have been set aside for issuance to Haris Basit pursuant to his employment agreement and will reduce the shares available for issuance under the 2015 Plan.
In the event of a corporate transaction, change of control or related entity disposition, outstanding stock awards under the 2015 Plan shall be terminated unless they are assumed, continued, or substituted by the surviving corporation. The Plan Administrator shall have the authority, exercisable either in advance of any actual or anticipated corporate transaction, change of control or related entity disposition or at the time of the corporate transaction, change of control or related entity disposition to provide for the full or partial automatic vesting and exercisability of one or more outstanding unvested stock awards and the release from restrictions on transfer and repurchase or forfeiture rights of such stock awards in connection therewith, on such terms and conditions as the Plan Administrator may specify. The Plan Administrator also shall have the authority to condition any such stock award vesting and exercisability or release from such limitations upon the subsequent termination of the service within a specified period following the effective date of the corporate transaction, change of control or related entity disposition.
The Board or a duly appointed committee thereof may suspend or terminate the 2015 Plan at any time. The 2015 Plan is scheduled to terminate immediately prior to the 10th anniversary of the date it was adopted by the Board. No rights may be granted under the 2015 Plan while the 2015 Plan is suspended or after it is terminated. The Board or a duly appointed committee thereof may amend or modify the 2015 Plan at any time, subject to any stockholder approval required by applicable law or regulation.
The 2015 Plan is filed with this report as Exhibit 10.1 and is incorporated herein by reference. The foregoing description is subject to, and qualified in its entirety by, the 2015 Plan.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
As discussed below under Item 5.07, pursuant to a written consent of holders of a majority of voting securities (the "Written Consent") dated as of August 5, 2015, the stockholders holding a majority of voting securities of the Company approved an amendment to the Company’s charter to increase the total number of authorized shares of the Company’s capital stock from 1,810,000,000 to 3,910,000,000 shares, consisting of 3,900,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.001 par value per share. The charter amendment became effective on August 7, 2015 upon filing with, and acceptance for record by, the Secretary of State of the State of Nevada. A copy of the Certificate of Amendment of Articles of Incorporation effecting the increase in authorized capital stock of the Company is attached hereto as Exhibit 3.1 and is incorporated by reference herein.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On August 5, 2015, through the written consent of holders of a majority of voting securities consisting of one share of Series A Preferred Stock which constitutes 50.1% of the outstanding voting securities, the stockholders of the Company voted on and approved (1) an amendment to the Company’s charter that increased the total number of authorized shares of the Company’s capital stock from 1,810,000,000 to 3,910,000,000 shares and (2) the 2015 Plan.
Item 9.01 Financial Statements and Exhibits.
Exhibit
Number Description
3.1 Certificate of Amendment to Articles of Incorporation, effective August 7, 2015, increasing the authorized capital stock of the Company.
10.1 2015 Stock Incentive Plan of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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VIASPACE Inc.
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August 10, 2015
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By:
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Stephen J. Muzi
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Name: Stephen J. Muzi
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Title: CFO
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Exhibit Index
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Exhibit No.
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Description
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3.1
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Certificate of Amendment to Articles of Incorporation, effective August 6, 2015, increasing the authorized capital stock of the Company.
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10.1
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2015 Stock Incentive Plan of the Company.
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Exhibit 3.1
Text of Amended Articles of Incorporation
The first sentence of Article Fourth has been amended in its entirety to read as follows:
Fourth: The Corporation shall have the authority to issue 3,910,000,000 shares, of which
3,900,000,000 shall be common stock, $0.001 par value (Common Stock) and 10,000,000 shares
shall be preferred stock $0.001 par value (Preferred Stock).
Exhibit 10.1
VIASPACE INC.
2015 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and
retain the best available personnel, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Companys business.
2. Definitions. As used herein, the following definitions shall apply:
(a) Administrator means the Board or any of the Committees appointed to administer
the Plan.
(b) Affiliate and Associate shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.
(c) Applicable Laws means the legal requirements relating to the administration of
stock incentive plans, if any, under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents
therein.
(d) Assumed means that (i) pursuant to a Corporate Transaction defined in
Section (p)(i), (p)(ii) or (p)(iii) or a Related Entity Disposition, the contractual obligations
represented by the Award are assumed by the successor entity or its Parent in connection with the
Corporate Transaction or Related Entity Disposition or (ii) pursuant to a Corporate Transaction
defined in Section (p)(iv) or 2(q)(v), the Award is affirmed by the Company. The Award shall not
be deemed Assumed for purposes of terminating the Award (in the case of a Corporate Transaction)
and the termination of the Continuous Service of the Grantee (in the case of a Related Entity
Disposition) if pursuant to a Corporate Transaction or a Related Entity Disposition the Award is
replaced with a comparable award with respect to shares of capital stock of the successor entity or
its Parent. The determination of Award comparability shall be made by the Administrator and its
determination shall be final, binding and conclusive.
(e) Award means the grant of an Option, SAR, Dividend Equivalent Right, Restricted
Stock, Performance Unit, Performance Share, or other right or benefit under the Plan.
(f) Award Agreement means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.
(g) Board means the Board of Directors of the Company.
(h) Change in Control means a change in ownership or control of the Company effected
through either of the following transactions:
(i) the direct or indirect acquisition by any person or related group of persons (other than
an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a
person that directly or indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the
Companys outstanding securities pursuant to a tender or exchange offer made directly to the
Companys stockholders which a majority of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period of thirty-six (36) months or less
such that a majority of the Board members (rounded up to the next whole number) ceases, by reason
of one or more contested elections for Board membership, to be comprised of individuals who are
Continuing Directors.
(i) Code means the Internal Revenue Code of 1986, as amended.
(j) Committee means any committee appointed by the Board to administer the Plan.
(k) Common Stock means the common stock of the Company.
(l) Company means VIASPACE Inc., a Nevada corporation.
(m) Consultant means any person (other than an Employee or a Director, solely with
respect to rendering services in such persons capacity as a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.
(n) Continuing Directors means members of the Board who either (i) have been Board
members continuously for a period of at least thirty-six (36) months or (ii) have been Board
members for less than thirty-six (36) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
(o) Continuous Service means that the provision of services to the Company or a
Related Entity in any capacity of Employee, Director or Consultant, is not interrupted or
terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved
leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any capacity of Employee,
Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized personal leave. For
purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90)
days, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then
the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three
(3) months and one (1) day following the expiration of such ninety (90) day period.
(p) Corporate Transaction means any of the following transactions:
(i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the Company is
incorporated;
(ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company (including the capital stock of the Companys subsidiary corporations);
(iii) the complete liquidation or dissolution of the Company;
(iv) any reverse merger in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of the Companys
outstanding securities are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or
(v) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Companys outstanding securities but
excluding any such transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction.
(q) Covered Employee means an Employee who is a covered employee under
Section 162(m)(3) of the Code.
(r) Director means a member of the Board or the board of directors of any Related
Entity.
(s) Disability means as defined under the long-term disability policy of the Company
or the Related Entity to which the Grantee provides services regardless of whether the Grantee is
covered by such policy. If the Company or the Related Entity to which the Grantee provides service
does not have a long-term disability plan in place, Disability means that a Grantee is unable to
carry out the responsibilities and functions of the position held by the Grantee by reason of any
medically determinable physical or mental impairment for a period of not less than ninety (90)
consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.
(t) Dividend Equivalent Right means a right entitling the Grantee to compensation
measured by dividends paid with respect to Common Stock.
(u) Employee means any person, including an Officer or Director, who is an employee
of the Company or any Related Entity. The payment of a directors fee by the Company or a Related
Entity shall not be sufficient to constitute employment by the Company.
(v) Exchange Act means the Securities Exchange Act of 1934, as amended.
(w) Fair Market Value means, as of any date, the value of Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system on the date of
determination (or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was reported), as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, but selling prices are not reported, the
Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the date of determination (or, if no such prices were reported on
that date, on the last date such prices were reported), as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good
faith.
(x) Grantee means an Employee, Director or Consultant who receives an Award under
the Plan.
(y) Immediate Family means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in
law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any
person sharing the Grantees household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Grantee) control the management of assets, and any other
entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting
interests.
(z) Incentive Stock Option means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code
(aa) Non-Qualified Stock Option means an Option not intended to qualify as an
Incentive Stock Option.
(bb) Officer means a person who is an officer of the Company or a Related Entity
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
(cc) Option means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.
(dd) Parent means a parent corporation, whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(ee) Performance-Based Compensation means compensation qualifying as
performance-based compensation under Section 162(m) of the Code.
(ff) Performance Shares means Shares or an Award denominated in Shares which may be
earned in whole or in part upon attainment of performance criteria established by the
Administrator.
(gg) Performance Units means an Award which may be earned in whole or in part upon
attainment of performance criteria established by the Administrator and which may be settled for
cash, Shares or other securities or a combination of cash, Shares or other securities as
established by the Administrator.
(hh) Plan means this 2015 Stock Incentive Plan.
(ii) Related Entity means any Parent or Subsidiary of the Company and any business,
corporation, partnership, limited liability company or other entity in which the Company or a
Parent or a Subsidiary of the Company holds a substantial ownership interest, directly or
indirectly.
(jj) Related Entity Disposition means the sale, distribution or other disposition by
the Company or a Parent or a Subsidiary of the Company of all or substantially all of the interests
of the Company or a Parent or a Subsidiary of the Company in any Related Entity effected by a sale,
merger or consolidation or other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity, other than any Related Entity Disposition
to the Company or a Parent or a Subsidiary of the Company.
(kk) Restricted Stock means Shares issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator.
(ll) Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.
(mm) SAR means a stock appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in the value of Common
Stock.
(nn) Share means a share of the Common Stock.
(oo) Subsidiary means a subsidiary corporation, whether now or hereafter existing,
as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 10, below, the maximum aggregate number of Shares
which may be issued pursuant to all Awards (including Incentive Stock Options) is 100,000,000
Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired
Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which is forfeited or canceled,
expires or is settled in cash, shall be deemed not to have been issued for purposes of determining
the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually
have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.
4. Administration of the Plan.
(a) Plan Administrator.
(i) Administration with Respect to Directors and Officers. With respect to grants of
Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
(ii) Administration With Respect to Consultants and Other Employees. With respect to
grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board. The Board may authorize one or more Officers to grant such Awards and may limit such
authority as the Board determines from time to time.
(iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, as of and after the date that the exemption for the Plan under Section 162(m) of the
Code expires, as set forth in Section 18 herein, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of
a Committee) which is comprised solely of two or more Directors eligible to serve on a committee
making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to
Covered Employees, references to the Administrator or to a Committee shall be deemed to be
references to such Committee or subcommittee.
(iv) Administration Errors. In the event an Award is granted in a manner inconsistent
with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the
Plan (including any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the authority, in its discretion:
(i) to select the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of other consideration to be covered by
each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted hereunder;
(vi) to amend the terms of any outstanding Award granted under the Plan, provided that any
amendment that would adversely affect the Grantees rights under an outstanding Award shall not be
made without the Grantees written consent;
(vii) to construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the Plan;
(viii) to establish additional terms, conditions, rules or procedures to accommodate the rules
or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such
rules or laws; provided, however, that no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions which are inconsistent with the provisions
of the Plan; and
(ix) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.
5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of
the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who
has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors or Consultants who are residing in foreign jurisdictions as
the Administrator may determine from time to time.
6. Terms and Conditions of Awards.
(a) Type of Awards. The Administrator is authorized under the Plan to award any type
of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) an
Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value of
the Shares and with an exercise or conversion privilege related to the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria or other conditions,
or (iii) any other security with the value derived from the value of the Shares. Such awards
include, without limitation, Options, SARs, or sales or bonuses of Restricted Stock, Dividend
Equivalent Rights, Performance Units or Performance Shares, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or alternative.
(b) Designation of Award. Each Award shall be designated in the Award Agreement. In
the case of an Option, the Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options
which become exercisable for the first time by a Grantee during any calendar year (under all plans
of the Company or any Parent or Subsidiary of the Company) exceeds $100,000, such excess Options,
to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated
as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option.
(c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall
determine the provisions, terms, and conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form
of payment (cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, increase in share price,
earnings per share, total stockholder return, return on equity, return on assets, return on
investment, net operating income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator. Partial achievement of
the specified criteria may result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.
(d) Acquisitions and Other Transactions. The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.
(e) Deferral of Award Payment. The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award (but only to the extent that such deferral programs would not result
in an accounting compensation charge unless otherwise determined by the Administrator). The
Administrator may establish the election procedures, the timing of such elections, the mechanisms
for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral program.
(f) Separate Programs. The Administrator may establish one or more separate programs
under the Plan for the purpose of issuing particular forms of Awards to one or more classes of
Grantees on such terms and conditions as determined by the Administrator from time to time.
(g) Individual Option and SAR Limit. Following the date that the exemption from
application of Section 162(m) of the Code described in Section 18 (or any exemption having similar
effect) ceases to apply to Awards, the maximum number of Shares with respect to which Options and
SARs may be granted to any Grantee in any fiscal year of the Company shall be 5,000,000 Shares. In
connection with a Grantees commencement of Continuous Service, a Grantee may be granted Options
and SARs for up to an additional 5,000,000 Shares which shall not count against the limit set forth
in the previous sentence.] The foregoing limitations shall be adjusted proportionately in
connection with any change in the Companys capitalization pursuant to Section 10, below. To the
extent required by Section 162(m) of the Code or the regulations thereunder, in applying the
foregoing limitation[s] with respect to a Grantee, if any Option or SAR is canceled, the canceled
Option or SAR shall continue to count against the maximum number of Shares with respect to which
Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or
in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to
reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or SAR.
(h) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.
(i) Term of Award. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term of an Incentive Stock Option shall be no more than
ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option
granted to a Grantee who, at the time the Option is granted, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company, the term of the Incentive Stock Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the Award Agreement.
(j) Transferability of Awards. Incentive Stock Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the
Grantee; provided, however, that the Grantee may designate a beneficiary of the Grantees Incentive
Stock Option in the event of the Grantees death on a beneficiary designation form provided by the
Administrator. Other Awards shall be transferred by will and by the laws of descent and
distribution, and during the lifetime of the Grantee, by gift and or pursuant to a domestic
relations order to members of the Grantees Immediate Family to the extent and in the manner
determined by the Administrator.
(k) Time of Granting Awards. The date of grant of an Award shall for all purposes be
the date on which the Administrator makes the determination to grant such Award, or such other date
as is determined by the Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.
7. Award Exercise or Purchase Price, Consideration and Taxes.
(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award
shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns
stock representing more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less
than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or
(B) granted to any Employee other than an Employee described in the preceding paragraph, the
per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not
less than eighty-five percent (85%) of the Fair Market Value per Share on the date of grant.
(iii) In the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.
(iv) In the case of other Awards, such price as is determined by the Administrator.
(v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be
determined in accordance with the provisions of the relevant instrument evidencing the agreement to
issue such Award.
(b) Consideration. Subject to Applicable Laws, the consideration to be paid for the
Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined
at the time of grant). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares issued under the
Plan the following:
(i) cash;
(ii) check;
(iii) surrender of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require (including withholding of Shares otherwise deliverable
upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall be exercised (but
only to the extent that such exercise of the Award would not result in an accounting compensation
charge with respect to the Shares used to pay the exercise price unless otherwise determined by the
Administrator);
(iv) with respect to Options, payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (B) shall provide written directives
to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm
in order to complete the sale transaction; or
(v) any combination of the foregoing methods of payment.
(c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the Administrator for the
satisfaction of any foreign, federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon
exercise of an Award the Company shall withhold or collect from Grantee an amount sufficient to
satisfy such tax obligations.
8. Exercise of Award.
(a) Procedure for Exercise; Rights as a Stockholder.
(i) Any Award granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Award
Agreement.
(ii) An Award shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person entitled to exercise
the Award and full payment for the Shares with respect to which the Award is exercised, including,
to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase
price as provided in Section 7(b)(iv). Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to Shares subject to an Award, notwithstanding the exercise of
an Option or other Award. The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Award. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is issued, except as provided in
the Award Agreement or Section 10, below.
(b) Exercise of Award Following Termination of Continuous Service.
(i) An Award may not be exercised after the termination date of such Award set forth in the
Award Agreement and may be exercised following the termination of a Grantees Continuous Service
only to the extent provided in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise an Award following the
termination of the Grantees Continuous Service for a specified period, the Award shall terminate
to the extent not exercised on the last day of the specified period or the last day of the original
term of the Award, whichever occurs first.
(iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the
time permitted by law for the exercise of Incentive Stock Options following the termination of a
Grantees Continuous Service shall convert automatically to a Non-Qualified Stock Option and
thereafter shall be exercisable as such to the extent exercisable by its terms for the period
specified in the Award Agreement.
9. Conditions Upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an Award unless the exercise of
such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all
Applicable Laws, and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
(b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required by any Applicable
Laws.
10. Adjustments Upon Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding Award, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Options and SARs may be
granted to any Grantee in any fiscal year of the Company, as well as any other terms that the
Administrator determines require adjustment shall be proportionately adjusted for (i) any increase
or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or similar transaction affecting the
Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt
of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any
other transaction with respect to Common Stock including a corporate merger, consolidation,
acquisition of property or stock, separation (including a spin-off or other distribution of stock
or property), reorganization, liquidation (whether partial or complete) or any similar transaction;
provided, however that conversion of any convertible securities of the Company shall not be deemed
to have been effected without receipt of consideration. Such adjustment shall be made by the
Administrator and its determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof
shall be made with respect to, the number or price of Shares subject to an Award.
11. Corporate Transactions/Related Entity Dispositions.
(a) Termination of Award to Extent Not Assumed.
(i) Corporate Transaction. Effective upon the consummation of a Corporate
Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall
not terminate to the extent they are Assumed in connection with the Corporate Transaction.
(ii) Related Entity Disposition. Effective upon the consummation of a Related Entity
Disposition, for purposes of the Plan and all Awards, there shall be a deemed termination of
Continuous Service of each Grantee who is at the time engaged primarily in service to the Related
Entity involved in such Related Entity Disposition and each Award of such Grantee which is at the
time outstanding under the Plan shall be exercisable in accordance with the terms of the Award
Agreement evidencing such Award. However, such Continuous Service shall not be deemed to terminate
as to the portion of any such award that is Assumed.
(b) Acceleration of Award Upon Corporate Transaction/Change in Control/Related Entity
Disposition.
The Administrator shall have the authority, exercisable either in advance of any actual or
anticipated Corporate Transaction, Change in Control or Related Entity Disposition or at the time
of an actual Corporate Transaction, Change in Control or Related Entity Disposition and exercisable
at the time of the grant of an Award under the Plan or any time while an Award remains outstanding,
to provide for the full or partial automatic vesting and exercisability of one or more outstanding
unvested Awards under the Plan and the release from restrictions on transfer and repurchase or
forfeiture rights of such Awards in connection with a Corporate Transaction, Change in Control or
Related Entity Disposition, on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Award vesting and exercisability
or release from such limitations upon the subsequent termination of the Continuous Service of the
Grantee within a specified period following the effective date of the Corporate Transaction, Change
in Control or Related Entity Disposition. The Administrator may provide that any Awards so vested
or released from such limitations in connection with a Change in Control or Related Entity
Disposition, shall remain fully exercisable until the expiration or sooner termination of the
Award.
12. Effective Date and Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board or its approval by the stockholders of the Company. It shall
continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 17,
below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.
13. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the Plan. To the extent necessary
to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.
(b) No Award may be granted during any suspension of the Plan or after termination of the
Plan.
(c) No amendment, suspension or termination of the Plan (including termination of the Plan
under Section 12, above) shall adversely affect any rights under Awards already granted to a
Grantee, unless consented to by the Grantee.
14. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
(b) The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Companys counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.
15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantees Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or any Related Entity to
terminate the Grantees Continuous Service at any time, with or without cause, and with or without
notice.
16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be
deemed compensation for purposes of computing benefits or contributions under any retirement plan
of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the availability or amount of
benefits is related to level of compensation. The Plan is not a Retirement Plan or Welfare
Plan under the Employee Retirement Income Security Act of 1974, as amended.
17. Stockholder Approval. The grant of Incentive Stock Options under the Plan shall
be subject to approval by the stockholders of the Company within twelve (12) months before or after
the date the Plan is adopted excluding Incentive Stock Options issued in substitution for
outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder
approval shall be obtained in the degree and manner required under Applicable Laws. The
Administrator may grant Incentive Stock Options under the Plan prior to approval by the
stockholders, but until such approval is obtained, no such Incentive Stock Option shall be
exercisable. In the event that stockholder approval is not obtained within the twelve (12) month
period provided above, all Incentive Stock Options previously granted under the Plan shall be
exercisable as Non-Qualified Stock Options.
18. Effect of Section 162(m) of the Code. The Plan, and all Awards issued thereunder,
are intended to be exempt from the application of Section 162(m) of the Code, which restricts under
certain circumstances the Federal income tax deduction for compensation paid by a public company to
named executives in excess of $1 million per year. The exemption is based on Treasury Regulation
Section 1.162-27(f), in the form existing on the effective date of the Plan, with the understanding
that such regulation generally exempts from the application of Section 162(m) of the Code
compensation paid pursuant to a plan that existed before a company becomes publicly held. Under
such Treasury Regulation, this exemption is available to the Plan for the duration of the period
that lasts until the earlier of (i) the expiration of the Plan, (ii) the material modification of
the Plan, (iii) the exhaustion of the maximum number of shares of Common Stock available for Awards
under the Plan, as set forth in Section 3(a), (iv) the first meeting of shareholders at which
directors are to be elected that occurs after the close of the third calendar year following the
calendar year in which the Company first becomes subject to the reporting obligations of Section 12
of the Exchange Act, or (v) such other date required by Section 162(m) of the Code and the rules
and regulations promulgated thereunder. The Committee may, without shareholder approval, amend the
Plan retroactively and/or prospectively to the extent it determines necessary in order to comply
with any subsequent clarification of Section 162(m) of the Code required to preserve the Companys
Federal income tax deduction for compensation paid pursuant to the Plan. To the extent that the
Administrator determines as of the date of grant of an Award that (i) the Award is intended to
qualify as Performance-Based Compensation and (ii) the exemption described above is no longer
available with respect to such Award, such Award shall not be effective until any stockholder
approval required under Section 162(m) of the Code has been obtained.
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