Exhibit 2 - Form 8K dated February15, 2002

 

**UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934

Date of Report: **February 15, 2002**
 
**ELECTRONIC SYSTEMS TECHNOLOGY INC.(A Washington Corporation)****
Commission File no. 000-27793IRS Employer Identification no. 91-1238077

415 N. Quay St. #4Kennewick WA 99336(Address of principal executive offices)

 

Registrant's telephone number, including area code:(509)735-9092
 

 

 

 
**ITEM 5. OTHER EVENTS**
During the Company's scheduled Board of Directors Meeting on February15, 2002, the Board of Directors awarded Stock Options for Employees and Directors, as wasrecommended by the Board's Employee/Director Stock Option Committee, subject to theconditions delineated in the Committee's recommendations and in accordance with theElectronic Systems Technology, Inc. Stock Option Plan for Directors, Officers, andEmployees, as approved by Shareholder vote on June 7, 1996. The exercise price of theawarded stock options was $0.42 per share. Employees and Directors, who were recipients ofthe stock options and conditions relating to the stock options approved by the Board ofDirectors, are delineated on attached Exhibit 20.1.
**ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, ANDEXHIBITS.**
Exhibit 20.1 - Summary of Employee/Director Stock Option Committeerecommendations regarding Employee and Director Stock Options, as approved by theCompany's Board of Directors, February 15, 2002.
 

 

 

 

 

 
**SIGNATURES**
Pursuant to the requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized.

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

/s/ T. L. KIRCHNER

By: T.L. KirchnerPresident

Date: February 21, 2002
 

EXHIBIT 20.1 - SUMMARY OF EMPLOYEE/DIRECTOR STOCK OPTIONCOMMITTEE RECOMMENDATIONS REGARDING EMPLOYEE AND DIRECTOR STOCK OPTIONS, AS APPROVED BY THE COMPANY'S BOARD OF DIRECTORS, FEBRUARY 15, 2002.

EXHIBIT 20.1

February 15, 2002

To: EST Board of Directors

From: Employee/Director Stock Option Committee

Subject: Recommendations

The committee recommends to the Board of Directors that the individualemployees and directors with no less than three years continuous tenure named herein begranted stock options, effective February 15, 2002, in the amounts tabulated and subjectto the conditions herein delineated and in accordance with the Electronic SystemsTechnology Stock Option Plan for Directors, Officers, and Employees, as ratified byshareholder vote on June 7, 1996.
**Name**Status**Option SharesMelvin BrownDirector25,000Jon A. CorreioDirector25,000Tom KirchnerDirector25,000John L. SchooleyDirector25,000Robert SouthworthDirector25,000 David B. StreckerEmployee15,000Eric P. MarskeEmployee15,000Alan B. CookEmployee15,000Gary L. SchmitzEmployee5,000George M. StoltzEmployee5,000 
Recommended Option Conditions:

1. Each option grant will be at an exercise price per share equal tomarket price at the time of grant. Market price will be the mean of bid and ask pricesrecorded on the National Daily Quotation Service "pink sheet" for the effectivedate of the option grant. If no activity is reported for that date the "pinksheet" with closest preceding date with recorded activity will establish marketprice.

2. Each grant must be exercised by the optionee not later than threeyears (1095) days from the date of the grant.

3. Options will be exercised in minimum blocks of 5,000 shares at anyone time. Options not exercised within the three year (1095 day) period from option grantwill terminate and not carry over.

4. Rule 144 of the Securities Act of 1933 as amended will apply to allstock acquired by exercise of the option grants. Rule 144 prohibits resale for a period ofone year after acquisition and restricts resale quantities for one additional year. Eachoptionee shall make an independent inquiry as to all other restrictions.

5. The company shall have the right, but not obligation, to register allor any portion of the optioned shares at any time. The intent of registration is torelieve the Rule 144 resale restrictions which may still be in force at the time ofregistration.

6. In the event of termination of employment or board membership, theoptionee shall have a period of ninety days in which to exercise any options which he hasbeen granted, except under the conditions of paragraph 7 and 8, which shall supersede theprovisions of this paragraph. Unless otherwise extended by the board, all optionsterminated at the end of the ninety-day period.

7. If recapitalization and/or similar events result in the change ofshare unit values, the optionee will receive equivalent shares. If the company is not thesurviving entity by virtue of merger, acquisition, etc., the optionee will have a windowof ten days in which to exercise his option. The last day of the window will be five daysprior to the legal conclusion of any such event.

8. In the event of company acquisition, merger, reorganization and othertransactions altering the company structure any outstanding options then in force must beimmediately exercised.

9. Option grants are not transferable or assignable except to anemployee's estate in accordance with the laws of inheritance in the event of optionee'sdeath.

10. All facets of the stock option program shall be appropriatelydocumented in accordance with the advice of the company's legal counsels and shall complywith all relevant legal requirements in the State of Washington and all Securities andExchange Commission rules, regulations, and disclosure requirements.**********