Milwaukee,
Wisconsin
July
10, 2007
|
By
Order of the Board of Directors,
/s/
John King
John
King
Secretary
|
1.
|
Effect
a one-for-fifteen stock split of the common stock, par value $0.001
per
share, of the Company.
|
2. |
Adopt
the 2007 Stock Incentive Plan.
|
Name
of Beneficial Owner (1)
|
Common
Stock
Beneficially
Owned
|
Percentage
of
Common
Stock (2)
|
John
King
|
34,500,000
|
9.67%
|
David
Marks SEP IRA(3)
|
40,500,000
|
11.34%
|
Frank
Crivello SEP IRA (4)
|
210,000,000
|
58.81%
|
Senegis
LLC (5)
|
27,710,000
|
7.76%
|
All
officers and directors as a group (2 persons)
|
75,000,000
|
21.00%
|
(1)
|
Except
as otherwise indicated, the address of each beneficial owner is c/o
Tech
Laboratories, Inc.
1818
North Farwell Avenue, Milwaukee, Wisconsin 53202.
|
(2)
|
Applicable
percentage ownership is based on an assumption of 357,076,887 shares
of
common stock outstanding as of July 10, 2007, assuming full conversion
of
the Preferred Stock, together with other securities exercisable
or
convertible into shares of common stock within 60 days of such
date by
each stockholder. Beneficial ownership is determined in accordance
with
the rules of the Securities and Exchange Commission and generally
includes
voting or investment power with respect to securities. Shares of
common
stock that are currently obtainable or obtainable within 60 days
of July
10, 2007 by exercise or conversion of other securities are deemed
to be
beneficially owned by the person holding such securities for the
purpose
of computing the percentage of ownership of such person, but are
not
treated as outstanding for the purpose of computing the percentage
ownership of any other
person.
|
(3)
|
Of
the shares attributed to Mr. Marks, 3,000,000 shares are registered
in the
name of the Irrevocable Children’s Trust (“ICT”) of which Mr. Marks is a
trustee and 3,000,000 are registered in the name of Phoenix Investors,
LLC
(“Phoenix) of which Mr. Marks is Managing Director.
|
(4)
|
Mr.
Crivello is also the managing member of Crivello Group, LLC which
owns
10,000,000 shares of common stock.
|
(5)
|
Lyanne
Greystoke has voting and dispositive power with respect to the shares
owned by Senegis LLC.
|
By
Order of the Board of Directors
|
||||
/s/
John King
John
King
Secretary
|
TECH LABORATORIES, INC. | ||
|
|
|
By: | ||
John King, Chief Executive Officer and Secretary |
||
1.
|
Definitions.
|
(a)
|
"Board"
-
The Board of Directors of the
Company.
|
(b)
|
"Code"
-
The Internal Revenue Code of 1986, as amended from time to
time.
|
(c)
|
"Committee"
-
The Compensation Committee of the Company's Board, or such other
committee
of the Board that is designated by the Board to administer the
Plan,
composed of not less than two members of the Board all of whom
are
disinterested persons, as contemplated by Rule 16b-3 ("Rule
16b-3")
promulgated under the Securities Exchange Act of 1934, as amended
(the
"Exchange
Act").
|
(d)
|
"Company"
-TECH LABORATORIES, INC. and its subsidiaries including subsidiaries
of
subsidiaries.
|
(e)
|
"Exchange
Act"
-
The Securities Exchange Act of 1934, as amended from time to
time.
|
(f)
|
"Fair
Market Value"
-
The fair market value of the Company's issued and outstanding Stock
as
determined in good faith by the Board or
Committee.
|
(g)
|
"Grant"
-
The grant of any form of stock option, stock award, or stock purchase
offer, whether granted singly, in combination or in tandem, to
a
Participant pursuant to such terms, conditions and limitations
as the
Committee may establish in order to fulfill the objectives of the
Plan.
|
(h)
|
"Grant
Agreement"
-
An agreement between the Company and a Participant that sets forth
the
terms, conditions and limitations applicable to a
Grant.
|
(i)
|
"Option"
-
Either an Incentive Stock Option, in accordance with Section 422
of Code,
or a Nonstatutory Option, to purchase the Company's Stock that
may be
awarded to a Participant under the Plan. A Participant who receives
an
award of an Option shall be referred to as an "Optionee."
|
(j)
|
"Participant"
-
A director, officer, employee or consultant of the Company to whom
an
Award has been made under the Plan.
|
(k)
|
"Restricted
Stock Purchase Offer"
-
A Grant of the right to purchase a specified number of shares of
Stock
pursuant to a written agreement issued under the
Plan.
|
(l)
|
"Securities
Act"
-
The Securities Act of 1933, as amended from time to
time.
|
(m)
|
"Stock"
-
Authorized and issued or unissued shares of common stock of the
Company.
|
(n)
|
"Stock
Award"
-
A Grant made under the Plan in stock or denominated in units of
stock for
which the Participant is not obligated to pay additional
consideration.
|
2.
|
Administration.
The Plan shall be administered by the Board, provided however,
that the
Board may delegate such administration to the Committee. Subject
to the
provisions of the Plan, the Board and/or the Committee shall have
authority to (a) grant, in its discretion, Incentive Stock Options
in
accordance with Section 422 of the Code, or Nonstatutory Options,
Stock
Awards or Restricted Stock Purchase Offers; (b) determine in good
faith
the fair market value of the Stock covered by any Grant; (c) determine
which eligible persons shall receive Grants and the number of shares,
restrictions, terms and conditions to be included in such Grants;
(d)
construe and interpret the Plan; (e) promulgate, amend and rescind
rules
and regulations relating to its administration, and correct defects,
omissions and inconsistencies in the Plan or any Grant; (f) consistent
with the Plan and with the consent of the Participant, as appropriate,
amend any outstanding Grant or amend the exercise date or dates
thereof;
(g) determine the duration and purpose of leaves of absence which
may be
granted to Participants without constituting termination of their
employment for the purpose of the Plan or any Grant; and (h) make
all
other determinations necessary or advisable for the Plan's administration.
The interpretation and construction by the Board of any provisions
of the
Plan or selection of Participants shall be conclusive and final.
No member
of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
Grant
made thereunder.
|
3.
|
Eligibility.
|
(a)
|
General:
The persons who shall be eligible to receive Grants shall be directors,
officers, employees or consultants to the Company. The term consultant
shall mean any person, other than an employee, who is engaged by
the
Company to render services and is compensated for such services.
An
Optionee may hold more than one Option. Any issuance of a Grant
to an
officer or director of the Company subsequent to the first registration
of
any of the securities of the Company under the Exchange Act shall
comply
with the requirements of Rule
16b-3.
|
(b)
|
Incentive
Stock Options:
Incentive Stock Options may only be issued to employees of the
Company.
Incentive Stock Options may be granted to officers or directors,
provided
they are also employees of the Company. Payment of a director's
fee shall
not be sufficient to constitute employment by the
Company.
|
The
Company shall not grant an Incentive Stock Option under the Plan
to any
employee if such Grant would result in such employee holding the
right to
exercise for the first time in any one calendar year, under all
Incentive
Stock Options granted under the Plan or any other plan maintained
by the
Company, with respect to shares of Stock having an aggregate fair
market
value, determined as of the date of the Option is granted, in excess
of
$100,000. Should it be determined that an Incentive Stock Option
granted
under the Plan exceeds such maximum for any reason other than a
failure in
good faith to value the Stock subject to such option, the excess
portion
of such option shall be considered a Nonstatutory Option. To the
extent
the employee holds two (2) or more such Options which become exercisable
for the first time in the same calendar year, the foregoing limitation
on
the exercisability of such Option as Incentive Stock Options under
the
Federal tax laws shall be applied on the basis of the order in
which such
Options are granted. If, for any reason, an entire Option does
not qualify
as an Incentive Stock Option by reason of exceeding such maximum,
such
Option shall be considered a Nonstatutory
Option.
|
(c)
|
Nonstatutory
Option:
The provisions of the foregoing Section 3(b) shall not apply to
any Option
designated as a "Nonstatutory
Option"
or which sets forth the intention of the parties that the Option
be a
Nonstatutory Option.
|
(d)
|
Stock
Awards and Restricted Stock Purchase Offers:
The provisions of this Section 3 shall not apply to any Stock Award
or
Restricted Stock Purchase Offer under the
Plan.
|
4.
|
Stock.
|
(a)
|
Authorized
Stock:
Stock subject to Grants may be either unissued or reacquired
Stock.
|
(b)
|
Number
of Shares:
Subject to adjustment as provided in Section 5(i) of the Plan,
the total
number of shares of Stock which may be purchased or granted directly
by
Options, Stock Awards or Restricted Stock Purchase Offers, or purchased
indirectly through exercise of Options granted under the Plan shall
not
exceed Fifteen Million (15,000,000). If any Grant shall for any
reason
terminate or expire, any shares allocated thereto but remaining
unpurchased upon such expiration or termination shall again be
available
for Grants with respect thereto under the Plan as though no Grant
had
previously occurred with respect to such shares. Any shares of
Stock
issued pursuant to a Grant and repurchased pursuant to the terms
thereof
shall be available for future Grants as though not previously covered
by a
Grant.
|
(c)
|
Reservation
of Shares:
The Company shall reserve and keep available at all times during
the term
of the Plan such number of shares as shall be sufficient to satisfy
the
requirements of the Plan. If, after reasonable efforts, which efforts
shall not include the registration of the Plan or Grants under
the
Securities Act, the Company is unable to obtain authority from
any
applicable regulatory body, which authorization is deemed necessary
by
legal counsel for the Company for the lawful issuance of shares
hereunder,
the Company shall be relieved of any liability with respect to
its failure
to issue and sell the shares for which such requisite authority
was so
deemed necessary unless and until such authority is
obtained.
|
(d) |
Application
of Funds:
The
proceeds received by the Company from the sale of Stock pursuant
to the
exercise of Options or rights under Stock Purchase Agreements will
be used
for general corporate purposes.
|
(e)
|
No
Obligation to Exercise:
The issuance of a Grant shall impose no obligation upon the Participant
to
exercise any rights under such
Grant.
|
5.
|
Terms
and Conditions of Options. Options granted hereunder shall be evidenced
by
agreements between the Company and the respective Optionees, in
such form
and substance as the Board or Committee shall from time to time
approve.
The form of Incentive Stock Option Agreement attached hereto as
Exhibit
A
and the three forms of a Nonstatutory Stock Option Agreement for
employees, for directors and for consultants, attached hereto as
Exhibit
B-1, Exhibit
B-2
and
Exhibit B-3,
respectively, shall be deemed to be approved by the Board. Option
agreements need not be identical, and in each case may include
such
provisions as the Board or Committee may determine, but all such
agreements shall be subject to and limited by the following terms
and
conditions:
|
(a)
|
Number
of Shares:
Each Option shall state the number of shares to which it
pertains.
|
(b)
|
Exercise
Price:
Each Option shall state the exercise price, which shall be determined
as
follows:
|
(i) |
Any
Incentive Stock Option granted to a person who at the time the
Option is
granted owns (or is deemed to own pursuant to Section 424(d) of
the Code)
stock possessing more than ten percent (10%) of the total combined
voting
power or value of all classes of stock of the Company ("Ten
Percent Holder")
shall have an exercise price of no less than 110% of the Fair Market
Value
of the Stock as of the date of grant;
and
|
(ii) |
Incentive
Stock Options granted to a person who at the time the Option is
granted is
not a Ten Percent Holder shall have an exercise price of no less
than 100%
of the Fair Market Value of the Stock as of the date of
grant.
|
For
the purposes of this Section 5(b), the Fair Market Value shall
be as
determined by the Board in good faith, which determination shall
be
conclusive and binding; provided however, that if there is a public
market
for such Stock, the Fair Market Value per share shall be the average
of
the bid and asked prices (or the closing price if such stock is
listed on
the NASDAQ National Market System or Small Cap Issue Market) on
the date
of grant of the Option, or if listed on a stock exchange, the closing
price on such exchange on such date of
grant.
|
(c)
|
Medium
and Time of Payment:
The exercise price shall become immediately due upon exercise of
the
Option and shall be paid in cash or check made payable to the Company.
Should the Company's outstanding Stock be registered under Section
12(g)
of the Exchange Act at the time the Option is exercised, then the
exercise
price may also be paid as follows:
|
(i) |
in
shares of Stock held by the Optionee for the requisite period necessary
to
avoid a charge to the Company's earnings for financial reporting
purposes
and valued at Fair Market Value on the exercise date,
or
|
(ii) |
through
a special sale and remittance procedure pursuant to which the Optionee
shall concurrently provide irrevocable written instructions (a)
to a
Company designated brokerage firm to effect the immediate sale
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 plus all applicable
Federal, state and local income and employment taxes required to
be
withheld by the Company by reason of such purchase and (b) to the
Company
to deliver the certificates for the purchased shares directly to
such
brokerage firm in order to complete the sale
transaction.
|
At
the discretion of the Board, exercisable either at the time of
Option
grant or of Option exercise, the exercise price may also be paid
(i) by
Optionee's delivery of a promissory note in form and substance
satisfactory to the Company and permissible under applicable securities
rules and bearing interest at a rate determined by the Board in
its sole
discretion, but in no event less than the minimum rate of interest
required to avoid the imputation of compensation income to the
Optionee
under the Federal tax laws, or (ii) in such other form of consideration
permitted by the State of Delaware corporations law as may be acceptable
to the Board.
|
(d)
|
Term
and Exercise of Options:
Any Option granted to an employee of the Company shall become exercisable
over a period of no longer than five (5) years, and no less than
twenty
percent (20%) of the shares covered thereby shall become exercisable
annually. No Option shall be exercisable, in whole or in part,
prior to
one (1) year from the date it is granted unless the Board shall
specifically determine otherwise, as provided herein. In no event
shall
any Option be exercisable after the expiration of ten (10) years
from the
date it is granted, and no Incentive Stock Option granted to a
Ten Percent
Holder shall, by its terms, be exercisable after the expiration
of five
(5) years from the date of the Option. Unless otherwise specified
by the
Board or the Committee in the resolution authorizing such Option,
the date
of grant of an Option shall be deemed to be the date upon which
the Board
or the Committee authorizes the granting of such Option.
|
(e)
|
Termination
of Status as Employee, Consultant or Director:
If
Optionee's status as an employee shall terminate for any reason
other than
Optionee's disability or death, then Optionee (or if the Optionee
shall
die after such termination, but prior to exercise, Optionee's personal
representative or the person entitled to succeed to the Option)
shall have
the right to exercise the portions of any of Optionee's Incentive
Stock
Options which were exercisable as of the date of such termination,
in
whole or in part, not less than 30 days nor more than three (3)
months
after such termination (or, in the event of "termination
for good cause"
as that term is defined in Delaware case law related thereto, or
by the
terms of the Plan or the Option Agreement or an employment agreement,
the
Option shall automatically terminate as of the termination of employment
as to all shares covered by the Option).
|
(f)
|
Disability
of Optionee:
If
an Optionee is disabled (within the meaning of Section 22(e)(3)
of the
Code) at the time of termination, the three (3) month period set
forth in
Section 5(e) shall be a period, as determined by the Board and
set forth
in the Option, of not less than six months nor more than one year
after
such termination.
|
(g)
|
Death
of Optionee:
If
an Optionee dies while employed by, engaged as a consultant to,
or serving
as a Director of the Company, the portion of such Optionee's Option
which
was exercisable at the date of death may be exercised, in whole
or in
part, by the estate of the decedent or by a person succeeding to
the right
to exercise such Option at any time within (i) a period, as determined
by
the Board and set forth in the Option, of not less than six (6)
months nor
more than one (1) year after Optionee's death, which period shall
not be
more, in the case of a Nonstatutory Option, than the period for
exercise
following termination of employment or services, or (ii) during
the
remaining term of the Option, whichever is the lesser. The Option
may be
so exercised only with respect to installments exercisable at the
time of
Optionee's death and not previously exercised by the
Optionee.
|
(h)
|
Nontransferability
of Option:
No
Option shall be transferable by the Optionee, except by will or
by the
laws of descent and distribution.
|
(i)
|
Recapitalization:
Subject to any required action of shareholders, the number of shares
of
Stock covered by each outstanding Option, and the exercise price
per share
thereof set forth in each such Option, shall be proportionately
adjusted
for any increase or decrease in the number of issued shares of
Stock of
the Company resulting from a stock split, stock dividend, combination,
subdivision or reclassification of shares, or the payment of a
stock
dividend, or any other increase or decrease in the number of such
shares
affected without receipt of consideration by the Company; provided,
however, the conversion of any convertible securities of the Company
shall
not be deemed to have been "effected
without receipt of consideration"
by the Company.
|
(j)
|
Rights
as a Shareholder:
An
Optionee shall have no rights as a shareholder with respect to
any shares
covered by an Option until the effective date of the issuance of
the
shares following exercise of such Option by Optionee. No adjustment
shall
be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights
for which
the record date is prior to the date such stock certificate is
issued,
except as expressly provided in Section 5(i) hereof.
|
(k)
|
Modification,
Acceleration, Extension, and Renewal of Options:
Subject to the terms and conditions and within the limitations
of the
Plan, the Board may modify an Option, or, once an Option is exercisable,
accelerate the rate at which it may be exercised, and may extend
or renew
outstanding Options granted under the Plan or accept the surrender
of
outstanding Options (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution for such
Options,
provided such action is permissible under Section 422 of the Code
and
applicable state securities rules. Notwithstanding the provisions
of this
Section 5(k), however, no modification of an Option shall, without
the
consent of the Optionee, alter to the Optionee's detriment or impair
any
rights or obligations under any Option theretofore granted under
the
Plan.
|
(l)
|
Exercise
Before Exercise Date:
At
the discretion of the Board, the Option may, but need not, include
a
provision whereby the Optionee may elect to exercise all or any
portion of
the Option prior to the stated exercise date of the Option or any
installment thereof. Any shares so purchased prior to the stated
exercise
date shall be subject to repurchase by the Company upon termination
of
Optionee's employment as contemplated by Section 5(n) hereof prior
to the
exercise date stated in the Option and such other restrictions
and
conditions as the Board or Committee may deem
advisable.
|
(m)
|
Other
Provisions:
The Option agreements authorized under the Plan shall contain such
other
provisions, including, without limitation, restrictions upon the
exercise
of the Options, as the Board or the Committee shall deem advisable.
Shares
shall not be issued pursuant to the exercise of an Option, if the
exercise
of such Option or the issuance of shares thereunder would violate,
in the
opinion of legal counsel for the Company, the provisions of any
applicable
law or the rules or regulations of any applicable governmental
or
administrative agency or body, such as the Code, the Securities
Act, the
Exchange Act, applicable state securities rules, Delaware corporation
law,
and the rules promulgated under the foregoing or the rules and
regulations
of any exchange upon which the shares of the Company are listed.
Without
limiting the generality of the foregoing, the exercise of each
Option
shall be subject to the condition that if at any time the Company
shall
determine that (i) the satisfaction of withholding tax or other
similar
liabilities, or (ii) the listing, registration or qualification
of any
shares covered by such exercise upon any securities exchange or
under any
state or federal law, or (iii) the consent or approval of any regulatory
body, or (iv) the perfection of any exemption from any such withholding,
listing, registration, qualification, consent or approval is necessary
or
desirable in connection with such exercise or the issuance of shares
thereunder, then in any such event, such exercise shall not be
effective
unless such withholding, listing registration, qualification, consent,
approval or exemption shall have been effected, obtained or perfected
free
of any conditions not acceptable to the
Company.
|
(n)
|
Repurchase
Agreement:
The Board may, in its discretion, require as a condition to the
Grant of
an Option hereunder, that an Optionee execute an agreement with
the
Company, in form and substance satisfactory to the Board in its discretion
("Repurchase
Agreement"),
(i) restricting the Optionee's right to transfer shares purchased
under
such Option without first offering such shares to the Company or
another
shareholder of the Company upon the same terms and conditions as
provided
therein; and (ii) providing that upon termination of Optionee's
employment
with the Company, for any reason, the Company (or another shareholder
of
the Company, as provided in the Repurchase Agreement) shall have
the right
at its discretion (or the discretion of such other shareholders)
to
purchase and/or redeem all such shares owned by the Optionee on
the date
of termination of his or her employment at a price equal to: (A)
the fair
value of such shares as of such date of termination; or (B) if
such
repurchase right lapses at 20% of the number of shares per year,
the
original purchase price of such shares, and upon terms of payment
permissible under applicable state securities rules; provided that
in the
case of Options or Stock Awards granted to officers, directors,
consultants or affiliates of the Company, such repurchase provisions
may
be subject to additional or greater restrictions as determined
by the
Board or Committee.
|
6.
|
Stock
Awards and Restricted Stock Purchase
Offers.
|
(a)
|
Types
of Grants.
|
(i) |
Stock
Award.
All or part of any Stock Award under the Plan may be subject to
conditions
established by the Board or the Committee, and set forth in the
Stock
Award Agreement, which may include, but are not limited to, continuous
service with the Company, achievement of specific business objectives,
increases in specified indices, attaining growth rates and other
comparable measurements of Company performance. Such Awards may
be based
on Fair Market Value or other specified valuation. All Stock Awards
will
be made pursuant to the execution of a Stock Award Agreement substantially
in the form attached hereto as Exhibit
C.
|
(ii) |
Restricted
Stock Purchase Offer.
A
Grant of a Restricted Stock Purchase Offer under the Plan shall
be subject
to such (i) vesting contingencies related to the Participant's
continued
association with the Company for a specified time and (ii) other
specified
conditions as the Board or Committee shall determine, in their
sole
discretion, consistent with the provisions of the Plan. All Restricted
Stock Purchase Offers shall be made pursuant to a Restricted Stock
Purchase Offer substantially in the form attached hereto as Exhibit
D.
|
(b)
|
Conditions
and Restrictions.
Shares of Stock which Participants may receive as a Stock Award
under a
Stock Award Agreement or Restricted Stock Purchase Offer under
a
Restricted Stock Purchase Offer may include such restrictions as
the Board
or Committee, as applicable, shall determine, including restrictions
on
transfer, repurchase rights, right of first refusal, and forfeiture
provisions. When transfer of Stock is so restricted or subject
to
forfeiture provisions it is referred to as "Restricted
Stock".
Further, with Board or Committee approval, Stock Awards or Restricted
Stock Purchase Offers may be deferred, either in the form of installments
or a future lump sum distribution. The Board or Committee may permit
selected Participants to elect to defer distributions of Stock
Awards or
Restricted Stock Purchase Offers in accordance with procedures
established
by the Board or Committee to assure that such deferrals comply
with
applicable requirements of the Code including, at the choice of
Participants, the capability to make further deferrals for distribution
after retirement. Any deferred distribution, whether elected by
the
Participant or specified by the Stock Award Agreement, Restricted
Stock
Purchase Offers or by the Board or Committee, may require the payment
be
forfeited in accordance with the provisions of Section 6(c). Dividends
or
dividend equivalent rights may be extended to and made part of
any Stock
Award or Restricted Stock Purchase Offers denominated in Stock
or units of
Stock, subject to such terms, conditions and restrictions as the
Board or
Committee may establish.
|
(c)
|
Cancellation
and Rescission of Grants.
Unless the Stock Award Agreement or Restricted Stock Purchase Offer
specifies otherwise, the Board or Committee, as applicable, may
cancel any
unexpired, unpaid, or deferred Grants at any time if the Participant
is
not in compliance with all other applicable provisions of the Stock
Award
Agreement or Restricted Stock Purchase Offer, the Plan and with
the
following conditions:
|
(i) |
A
Participant shall not render services for any organization or engage
directly or indirectly in any business which, in the judgment of
the chief
executive officer of the Company or other senior officer designated
by the
Board or Committee, is or becomes competitive with the Company,
or which
organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to
or in
conflict with the interests of the Company. For Participants whose
employment has terminated, the judgment of the chief executive
officer
shall be based on the Participant's position and responsibilities
while
employed by the Company, the Participant's post-employment
responsibilities and position with the other organization or business,
the
extent of past, current and potential competition or conflict between
the
Company and the other organization or business, the effect on the
Company's customers, suppliers and competitors and such other
considerations as are deemed relevant given the applicable facts
and
circumstances. A Participant who has retired shall be free, however,
to
purchase as an investment or otherwise, stock or other securities
of such
organization or business so long as they are listed upon a recognized
securities exchange or traded over-the-counter, and such investment
does
not represent a substantial investment to the Participant or a
greater
than ten percent (10%) equity interest in the organization or
business.
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(ii) |
A
Participant shall not, without prior written authorization from
the
Company, disclose to anyone outside the Company, or use in other
than the
Company's business, any confidential information or material, as
defined
in the Company's Proprietary Information and Invention Agreement
or
similar agreement regarding confidential information and intellectual
property, relating to the business of the Company, acquired by
the
Participant either during or after employment with the Company.
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(iii) |
A
Participant, pursuant to the Company's Proprietary Information
and
Invention Agreement, shall disclose promptly and assign to the
Company all
right, title and interest in any invention or idea, patentable
or not,
made or conceived by the Participant during employment by the Company,
relating in any manner to the actual or anticipated business, research
or
development work of the Company and shall do anything reasonably
necessary
to enable the Company to secure a patent where appropriate in the
United
States and in foreign countries.
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(iv) |
Upon
exercise, payment or delivery pursuant to a Grant, the Participant
shall
certify on a form acceptable to the Committee that he or she is
in
compliance with the terms and conditions of the Plan. Failure to
comply
with all of the provisions of this Section 6(c) prior to, or during
the
six months after, any exercise, payment or delivery pursuant to
a Grant
shall cause such exercise, payment or delivery to be rescinded.
The
Company shall notify the Participant in writing of any such rescission
within two years after such exercise, payment or delivery. Within
ten days
after receiving such a notice from the Company, the Participant
shall pay
to the Company the amount of any gain realized or payment received
as a
result of the rescinded exercise, payment or delivery pursuant
to a Grant.
Such payment shall be made either in cash or by returning to the
Company
the number of shares of Stock that the Participant received in
connection
with the rescinded exercise, payment or
delivery.
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(d)
|
Nonassignability.
|
(i) |
Except
pursuant to Section 6(e)(iii) and except as set forth in Section
6(d)(ii),
no Grant or any other benefit under the Plan shall be assignable
or
transferable, or payable to or exercisable by, anyone other than
the
Participant to whom it was granted.
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(ii) |
Where
a Participant terminates employment and retains a Grant pursuant
to
Section 6(e)(ii) in order to assume a position with a governmental,
charitable or educational institution, the Board or Committee,
in its
discretion and to the extent permitted by law, may authorize a
third party
(including but not limited to the trustee of a "blind" trust),
acceptable
to the applicable governmental or institutional authorities, the
Participant and the Board or Committee, to act on behalf of the
Participant with regard to such
Awards.
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(e)
|
Termination
of Employment.
If
the employment or service to the Company of a Participant terminates,
other than pursuant to any of the following provisions under this
Section
6(e), all unexercised, deferred and unpaid Stock Awards or Restricted
Stock Purchase Offers shall be cancelled immediately, unless the
Stock
Award Agreement or Restricted Stock Purchase Offer provides otherwise:
|
(i) |
Retirement
Under a Company Retirement Plan.
When a Participant's employment terminates as a result of retirement
in
accordance with the terms of a Company retirement plan, the Board
or
Committee may permit Stock Awards or Restricted Stock Purchase
Offers to
continue in effect beyond the date of retirement in accordance
with the
applicable Grant Agreement and the exercisability and vesting of
any such
Grants may be accelerated.
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(ii) |
Rights
in the Best Interests of the Company.
When a Participant resigns from the Company and, in the judgment
of the
Board or Committee, the acceleration and/or continuation of outstanding
Stock Awards or Restricted Stock Purchase Offers would be in the
best
interests of the Company, the Board or Committee may (i) authorize,
where
appropriate, the acceleration and/or continuation of all or any
part of
Grants issued prior to such termination and (ii) permit the exercise,
vesting and payment of such Grants for such period as may be set
forth in
the applicable Grant Agreement, subject to earlier cancellation
pursuant
to Section 9 or at such time as the Board or Committee shall deem
the
continuation of all or any part of the Participant's Grants are
not in the
Company's best interest.
|
(iii) |
Death
or Disability of a Participant.
|
(1)
|
In
the event of a Participant's death, the Participant's estate or
beneficiaries shall have a period up to the expiration date specified
in
the Grant Agreement within which to receive or exercise any outstanding
Grant held by the Participant under such terms as may be specified
in the
applicable Grant Agreement. Rights to any such outstanding Grants
shall
pass by will or the laws of descent and distribution in the following
order: (a) to beneficiaries so designated by the Participant; if
none,
then (b) to a legal representative of the Participant; if none,
then (c)
to the persons entitled thereto as determined by a court of competent
jurisdiction. Grants so passing shall be made at such times and
in such
manner as if the Participant were
living.
|
(2)
|
In
the event a Participant is deemed by the Board or Committee to
be unable
to perform his or her usual duties by reason of mental disorder
or medical
condition which does not result from facts which would be grounds
for
termination for cause, Grants and rights to any such Grants may
be paid to
or exercised by the Participant, if legally competent, or a committee
or
other legally designated guardian or representative if the Participant
is
legally incompetent by virtue of such
disability.
|
(3)
|
After
the death or disability of a Participant, the Board or Committee
may in
its sole discretion at any time (1) terminate restrictions in Grant
Agreements; (2) accelerate any or all installments and rights;
and (3)
instruct the Company to pay the total of any accelerated payments
in a
lump sum to the Participant, the Participant's estate, beneficiaries
or
representative; notwithstanding that, in the absence of such termination
of restrictions or acceleration of payments, any or all of the
payments
due under the Grant might ultimately have become payable to other
beneficiaries.
|
(4)
|
In
the event of uncertainty as to interpretation of or controversies
concerning this Section 6, the determinations of the Board or Committee,
as applicable, shall be binding and
conclusive.
|
7.
|
Investment
Intent. All Grants under the Plan are intended to be exempt from
registration under the Securities Act provided by Rule 701 thereunder.
Unless and until the granting of Options or sale and issuance of
Stock
subject to the Plan are registered under the Securities Act or
shall be
exempt pursuant to the rules promulgated thereunder, each Grant
under the
Plan shall provide that the purchases or other acquisitions of
Stock
thereunder shall be for investment purposes and not with a view
to, or for
resale in connection with, any distribution thereof. Further, unless
the
issuance and sale of the Stock have been registered under the Securities
Act, each Grant shall provide that no shares shall be purchased
upon the
exercise of the rights under such Grant unless and until (i) all
then
applicable requirements of state and federal laws and regulatory
agencies
shall have been fully complied with to the satisfaction of the
Company and
its counsel, and (ii) if requested to do so by the Company, the
person
exercising the rights under the Grant shall (i) give written assurances
as
to knowledge and experience of such person (or a representative
employed
by such person) in financial and business matters and the ability
of such
person (or representative) to evaluate the merits and risks of
exercising
the Option, and (ii) execute and deliver to the Company a letter
of
investment intent and/or such other form related to applicable
exemptions
from registration, all in such form and substance as the Company
may
require. If shares are issued upon exercise of any rights under
a Grant
without registration under the Securities Act, subsequent registration
of
such shares shall relieve the purchaser thereof of any investment
restrictions or representations made upon the exercise of such
rights.
|
8.
|
Amendment,
Modification, Suspension or Discontinuance of the Plan. The Board
may,
insofar as permitted by law, from time to time, with respect to
any shares
at the time not subject to outstanding Grants, suspend or terminate
the
Plan or revise or amend it in any respect whatsoever, except that
without
the approval of the shareholders of the Company, no such revision
or
amendment shall (i) increase the number of shares subject to the
Plan,
(ii) decrease the price at which Grants may be granted, (iii) materially
increase the benefits to Participants, or (iv) change the class
of persons
eligible to receive Grants under the Plan; provided, however, no
such
action shall alter or impair the rights and obligations under any
Option,
or Stock Award, or Restricted Stock Purchase Offer outstanding
as of the
date thereof without the written consent of the Participant thereunder.
No
Grant may be issued while the Plan is suspended or after it is
terminated,
but the rights and obligations under any Grant issued while the
Plan is in
effect shall not be impaired by suspension or termination of the
Plan.
|
9.
|
Tax
Withholding. The Company shall have the right to deduct applicable
taxes
from any Grant payment and withhold, at the time of delivery or
exercise
of Options, Stock Awards or Restricted Stock Purchase Offers or
vesting of
shares under such Grants, an appropriate number of shares for payment
of
taxes required by law or to take such other action as may be necessary
in
the opinion of the Company to satisfy all obligations for withholding
of
such taxes. If Stock is used to satisfy tax withholding, such stock
shall
be valued based on the Fair Market Value when the tax withholding
is
required to be made.
|
10.
|
Availability
of Information. During the term of the Plan and any additional
period
during which a Grant granted pursuant to the Plan shall be exercisable,
the Company shall make available, not later than one hundred and
twenty
(120) days following the close of each of its fiscal years, such
financial
and other information regarding the Company as is required by the
bylaws
of the Company and applicable law to be furnished in an annual
report to
the shareholders of the Company.
|
11.
|
Notice.
Any written notice to the Company required by any of the provisions
of the
Plan shall be addressed to the chief personnel officer or to the
chief
executive officer of the Company, and shall become effective when
it is
received by the office of the chief personnel officer or the chief
executive officer.
|
12.
|
Indemnification
of Board. In addition to such other rights or indemnifications
as they may
have as directors or otherwise, and to the extent allowed by applicable
law, the members of the Board and the Committee shall be indemnified
by
the Company against the reasonable expenses, including attorneys'
fees,
actually and necessarily incurred in connection with the defense
of any
claim, action, suit or proceeding, or in connection with any appeal
thereof, to which they or any of them may be a party by reason
of any
action taken, or failure to act, under or in connection with the
Plan or
any Grant granted thereunder, and against all amounts paid by them
in
settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction
of
a judgment in any such claim, action, suit or proceeding, except
in any
case in relation to matters as to which it shall be adjudged in
such
claim, action, suit or proceeding that such Board or Committee
member is
liable for negligence or misconduct in the performance of his or
her
duties; provided that within sixty (60) days after institution
of any such
action, suit or Board proceeding the member involved shall offer
the
Company, in writing, the opportunity, at its own expense, to handle
and
defend the same.
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13.
|
Governing
Law. The Plan and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the Code or the
securities
laws of the United States, shall be governed by the law of the
State of
Delaware and construed accordingly.
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14.
|
Effective
and Termination Dates. The Plan shall become effective on the date
it is
approved by the holders of a majority of the shares of Stock then
outstanding. The Plan shall terminate ten years later, subject
to earlier
termination by the Board pursuant to Section 8.
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TECH
LABORATORIES, INC.,
a
Delaware corporation
By:
John
King
Its: Chief
Executive Officer
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