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Exhibit 10.1
MAINSPRING, INC.
AMENDED AND RESTATED 1996 OMNIBUS STOCK PLAN
1. Purpose and Eligibility
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The purpose of this 1996 Amended and Restated Omnibus Stock Plan (the
"Plan") of Mainspring, Inc. (the "Company") is to provide incentive and
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non-qualified stock options, stock issuances and other equity interests in the
Company (each, an "Award") to employees, officers, directors, consultants and
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advisors of the Company and its Subsidiaries, all of whom are eligible to
receive Awards under the Plan. Any person to whom an Award has been granted
under the Plan is called a "Participant". Additional definitions are contained
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in Section 11.
2. Administration
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a. Administration by Board of Directors. The Plan will be
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administered by the Board of Directors of the Company (the "Board"). The Board,
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in its sole discretion, shall have the authority to grant and amend Awards, to
adopt, amend and repeal rules relating to the Plan and to interpret and correct
the provisions of the Plan and any Award. The Board shall have authority,
subject to the express limitations of the Plan, to construe and determine the
respective option agreement, Awards and the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan and any Awards, to determine
the terms and provisions of the respective option agreements and Awards, which
need not be identical, to make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration and
interpretation of the Plan. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any option agreement
or Award in the manner and to the extent it shall deem expedient to carry the
Plan, any option agreement or Award into effect and it shall be the sole and
final judge of such expediency. All decisions by the Board shall be final and
binding on all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to the Plan.
b. Appointment of Committee. To the extent permitted by applicable
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law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
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the Plan to the "Board" shall mean such Committee or the Board.
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c. Delegation to Executive Officers. To the extent permitted by
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applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.
d. Applicability of Rule 16b-3. Those provisions of the Plan which
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makes express reference to Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934 (the "Exchange Act") or, any successor rules ("Rule 16b-3")
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or which are required in order for
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certain option transactions to qualify for exemption under Rule 16b-3 shall
apply only to such persons as are required to file reports under Section 16 (a)
of the Exchange Act (a "Reporting Person").
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e. Applicability of Section 162 (m). Those provisions of the Plan
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which are required by or make express reference to Section 162 (m) of the
Internal Revenue Code or any regulations thereunder, or any successor section of
the Code or regulations thereunder ("Section 162 (m)") shall apply only upon the
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Company's becoming a company that is subject to Section 162 (m). Notwithstanding
any provisions in this Plan to the contrary, whenever the Board is authorized to
exercise its discretion in the administration or amendment of this Plan or any
Award hereunder or otherwise, the Board may not exercise such discretion in a
manner that would cause any outstanding Award that would otherwise qualify as
performance-based compensation under Section 162 (m) to fail to so qualify under
Section 162 (m).
f. Grant of Options to Directors. The selection of a director or an
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officer (as the terms "director" and "officer" are defined for purposes of Rule
16b-3) as a participant, the timing of the option grant or Award, the exercise
price of the option or the sale price of the Award and the number of shares for
which an option or Award may be granted to such director or officer shall be
determined either (i) by the Board, of which all members shall be "disinterested
persons" (as hereinafter defined), or (ii) by a committee of two or more
directors having full authority to act in the matter, of which all members shall
be "disinterested persons." For the purposes of the Plan, a director shall be
deemed to be "disinterested" only if such person qualifies as a "disinterested
person" within the meaning of Rule 16b-3 of the Exchange Act, as such terms is
interpreted from time to time. From the date on which the Company first has its
Common Stock registered under the Exchange Act, non-employee directors of the
Company are not eligible to receive options or awards of restricted stock under
the Plan.
3. Stock Available for Awards
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a. Number of Shares. Subject to adjustment under Section 3(c), the
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aggregate number of shares of Common Stock of the Company (the "Common Stock")
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that may be issued pursuant to the Plan is 3,926,908 shares. If any Award
expires, or is terminated, surrendered or forfeited, in whole or in part, the
unissued Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. If shares of Common Stock issued pursuant to the
Plan are repurchased by, or are surrendered or forfeited to, the Company at no
more than cost, such shares of Common Stock shall again be available for the
grant of Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares. Except as
may be prohibited by Rule 16b-3, (i) if an Award granted under the Plan shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject to such Award shall again be available for subsequent
option grants or Awards under the Plan, and (ii) if restricted stock awarded
under the Plan shall be repurchased by the Company, the repurchased shares
subject to such Award shall again be available for subsequent option grants or
Awards under the Plan.
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b. Per-Participant Limit. Subject to adjustment under Section 3(c),
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no Participant may be granted Awards during any one fiscal year to purchase more
than 2,500,000 shares of Common Stock.
c. Adjustment to Common Stock. In the event of any stock split, stock
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dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up,
or other similar change in capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the per-Participant share
limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option, (iii) the repurchase price
per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be
made) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is appropriate. If Section 7(f)(i) applies for any
event, this Section 3(c) shall not be applicable.
4. Stock Options
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a. General. The Board may grant options to purchase Common Stock
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(each, an "Option") and determine the number of shares of Common Stock to be
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covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.
b. Incentive Stock Options. An Option that the Board intends to be an
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"incentive stock option" as defined in Section 422 of the Code (an "Incentive
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Stock Option") shall be granted only to employees of the Company and shall be
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subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Board and the Company shall have no liability if an Option
or any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "Nonstatutory Stock Option" or
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"Nonqualified Stock Option."
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c. Dollar Limitation. For so long as the Code shall so provide,
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options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value
(determined as of the respective date or dates of grant) of more than $100,000.
The amount of Incentive Stock Options which exceed such $100,000 limitation
shall be deemed to be Nonqualified Stock Options.
d. Exercise Price. The Board shall establish the exercise price (or
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determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify the exercise price in the applicable
option agreement.
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e. Duration of Options. Each Option shall be exercisable at such
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times and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
f. Exercise of Option. Options may be exercised only by delivery to
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the Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(g) or the option agreement for
the number of shares for which the Option is exercised.
g. Payment Upon Exercise. Common Stock purchased upon the exercise of
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an Option shall be paid for by one or any combination of the following forms of
payment:
(i) by check payable to the order of the Company;
(ii) except as otherwise explicitly provided in the applicable
option agreement, and only if the Common Stock is then publicly traded, delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price; or
(iii) to the extent explicitly provided in the applicable
option agreement, by (x) delivery of shares of Common Stock owned by the
Participant (such shares not having been acquired within the prior six months by
the Participant pursuant to a stock option exercise) valued at fair market value
(as determined by the Board or as determined pursuant to the applicable option
agreement), (y) delivery of a promissory note of the Participant, with full
recourse to the Participant, to the Company (and delivery to the Company by the
Participant of a check in an amount equal to the par value of the shares
purchased), or (z) payment of such other lawful consideration as the Board may
determine.
The fair market value of any shares of the Company's Common Stock or
other non-cash consideration which may be delivered upon exercise of an option
shall be determined in such manner as may be prescribed by the Board.
h. Additional Option Provisions. The Board of Directors may, in its
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sole discretion, include additional provisions in any Award granted under the
Plan, including without limitation restrictions on transfer, repurchase rights,
commitments to pay cash bonuses, to make, arrange for or guaranty loans or to
transfer other property to optionees upon exercise of Awards, or transfer other
property to optionees upon exercise of options, or such other provisions as
shall be determined by the Board; provided that such additional provisions shall
not be inconsistent with any other term or condition of the Plan.
i. Acceleration, Extension, Etc. The Board may, in its sole
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discretion, and in all instances subject to any relevant tax and accounting
considerations which may adversely impact or impair the Company, (i) accelerate
the date or dates on which all or any particular options or
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Awards granted under the Plan any be exercised or (ii) extend the dates during
which all or any particular options or Awards granted under the Plan may be
exercised.
j. Determination of Fair Market Value. If, at the time an Option is
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granted under the Plan, the Company's Common Stock is publicly traded under the
Exchange Act, "fair market value" shall mean (i) the average (on that date) of
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the high and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded; or (ii) the last reported sale
price (on that date) of the Common Stock on the Nasdaq Market, if the Common
Stock is not then traded on a national securities exchange; or (iii) the average
of the closing bid and asked prices last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the Nasdaq Market. However, if the Common Stock is not
publicly-traded at the time an Award is granted under the Plan, "fair market
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value" shall be deemed to be the fair value of the Common Stock as determined by
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the Board after taking into consideration all factors which it deems
appropriate.
5. Restricted Stock
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a. Grants. The Board may grant Awards entitling recipients to acquire
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shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"Restricted Stock Award").
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b. Terms and Conditions. The Board shall determine the terms and
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conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
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effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
6. Other Stock-Based Awards
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The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights, phantom stock awards or stock units.
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7. General Provisions Applicable to Awards
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a. Transferability of Awards. Except as the Board may otherwise
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determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant; provided, however, that Nonstatutory
Options may be transferred pursuant to a qualified domestic relations order (as
defined in Rule 16b-3) or to a grantor-retained annuity trust or a similar
estate-planning vehicle in which the trust is bound by all provisions of the
option which are applicable to the optionee. References to a Participant, to the
extent relevant in the context, shall include references to authorized
transferees.
b. Documentation. Each Award under the Plan shall be evidenced by a
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written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan, provided that such terms and conditions do not contravene the provisions
of the Plan.
c. Board Discretion. The terms of each type of Award need not be
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identical, and the Board need not treat Participants uniformly.
d. Additional Award Provisions. The Board may, in its sole
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discretion, include additional provisions in any Award granted under the Plan,
including without limitation commitments to pay cash bonuses, make, arrange for
or guarantee loans or transfer other property to recipients upon the grant of
awards, or such other provisions as shall be determined by the Board.
e. Termination of Status. The Board shall determine the effect on an
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Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award, subject to applicable law and the provisions of the Code
related to Incentive Stock Options.
f. Acquisition of the Company - Consequences of an Acquisition.
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(i) Acquisition Intended to be Accounted for as a
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Pooling-of-Interests. Upon the consummation of an Acquisition (defined in
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section 7(g) below) intended to be accounted for as a pooling of interests: (x)
all outstanding Awards shall remain the obligation of the Company or be assumed
by the surviving or acquiring entity, and there shall be automatically
substituted for the shares of Common Stock then subject to such Awards the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition and (y) the vesting provisions of all Awards
held by a Participant shall become accelerated by one year in the event that any
such Participant who remains an employee of the Company or the acquiring or
surviving entity immediately following the consummation of the Acquisition is
terminated "without cause" (as defined below) or terminates his or her own
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employment "for good reason" (as defined below) after the consummation of the
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Acquisition but prior to the first anniversary of the consummation of the
Acquisition .
Notwithstanding the foregoing paragraph, as to any Participant, the
remaining unvested portion of any Option or Award held by such person shall
become vested and exercisable in the event of an Acquisition to be treated as a
pooling of interests, if the acceleration of such vesting is otherwise set forth
in any employment offer letter, employment agreement, option agreement or other
agreement with such person and such offer or agreement is executed at the time
of, or reasonably contemporaneous with, the initial employment of the
Participant or is otherwise set forth in any agreement which provides for the
grant of additional Awards to a Participant following commencement of
employment.
It shall be deemed to be a constructive termination "without cause" or
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"for good reason" if: (i) the Participant's responsibilities and executive
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authority are actually reduced or actually diluted in any material way without
the Participant's written consent; (ii) the Participant's annual salary or bonus
arrangement is actually reduced in any material way without written consent;
(iii) the Participant is actually relocated to another office or facility to a
location outside of a radius of 25 miles from any Company facility at which the
Participant was employed at the time of the Acquisition and without the
Participant's written consent; (iv) there occurs an actual termination of
Participant's rights to any benefits to which he is entitled to or a reduction
in scope or value thereof without the prior written consent of the Participant;
(v) there occurs an Acquisition, unless the successor to which all or a
significant portion of the Company's business and/or assets have been
transferred (directly or by operation of law) shall have assumed all duties and
obligations of the Company under this Plan; or the successor to the Company
shall have materially and adversely impaired Participant's rights under this
Plan.
(ii) Acquisition Intended to be Accounted for under the Purchase
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Method. Unless otherwise expressly provided in the applicable Option or Award,
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upon the occurrence of an Acquisition intended to be accounted for under the
purchase method, the Board or the board of directors of the surviving or
acquiring entity (as used in this Section 7(f)(ii), also the "Board"), shall, as
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to outstanding Awards (on the same basis or on different bases, as the Board
shall specify), make appropriate provision for the continuation of such Awards
by the Company or the assumption of such Awards by the surviving or acquiring
entity and by substituting on an equitable basis for the shares then subject to
such Awards either (a) the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition, (b) shares of stock
of the surviving or acquiring corporation or (c) such other securities as the
Board deems appropriate, the fair market value of which (as determined by the
Board in its sole discretion) shall not materially differ from the fair market
value of the shares of Common Stock subject to such Awards immediately preceding
the Acquisition. In addition to or in lieu of the foregoing, with respect to
outstanding Options, the Board may, upon written notice to the affected
optionees, provide that one or more Options then outstanding shall become
immediately exercisable in full and that such Options must be exercised within a
specified number of days of the date of such notice, at the end of which period
such Options shall terminate; or provide that one or more Options then
outstanding shall become immediately exercisable in full and shall be terminated
in exchange for a cash payment equal to the excess of
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the fair market value (as determined by the Board in its sole discretion) for
the shares subject to such Options over the exercise price thereof.
The Board or the board of directors of any entity assuming the
obligations of the Company hereunder, may, as to outstanding Options, also take
one or more of the following actions: (i) accelerate the date of exercise of
such Options or of any installment of any such Options; or (ii) permit the
exchange of all Options for the right to participate in any stock option or
other employee benefit plan of any successor corporation.
Notwithstanding the provisions of this Section 7(f)(ii), upon an
Acquisition intended to be accounted for under the purchase method, the vesting
provisions of all Awards held by a Participant shall, at a minimum, become
accelerated by one year in the event that (i) the acquiring entity does not
assume the Award or replace the Award held by such participant with a
substantially similar Award, or (ii) any such Participant, who remains an
employee of the Company or the acquiring or surviving entity immediately
following the consummation of the Acquisition, is terminated "without cause" or
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terminates his or her own employment "for good reason" prior to the first
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anniversary of the consummation of the Acquisition.
(iii) The foregoing provisions of this section 7(f) are subject in all
instances to the approval of the Board and any accounting considerations for any
acquisition which is intended to be treated as a "pooling of interests"
transaction pursuant to the Accounting Principles Board (APB) Opinion No. 16, if
any discretionary action by the Board of Directors would otherwise violate the
accounting rules for treatment of the Acquisition as a "pooling of interests"
under APB No. 16.
g. Acquisition Defined. An "Acquisition" shall mean: (x) any merger,
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business combination, consolidation or purchase of outstanding capital stock of
the Company after which the voting securities of the Company outstanding
immediately prior thereto represent (either by remaining outstanding or by being
converted into voting securities of the surviving or acquiring entity) less than
50% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such event (other
than as a result of a financing transaction); or (y) any sale of all or
substantially all of the capital stock or assets of the Company (other than in a
spin-off or similar transaction).
h. Assumption of Options Upon Certain Events. In connection with a
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merger or consolidation of an entity with the Company or the acquisition by the
Company of property or stock of an entity, the Board may grant Awards under the
Plan in substitution for stock and stock-based awards issued by such entity or
an affiliate thereof. The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the circumstances.
i. Pooling-of-Interests Accounting. If the Company proposes to engage
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in an Acquisition intended to be accounted for as a pooling-of-interests, and in
the event that the provisions of this Plan or of any Award hereunder, or any
actions of the Board taken in connection with such Acquisition, are determined
by the Company's or the acquiring company's independent public accountants to
cause such Acquisition to fail to be accounted for as a
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pooling-of-interests, then such provisions or actions shall be amended or
rescinded by the Board, without the consent of any Participant, to be consistent
with pooling-of-interests accounting treatment for such Acquisition.
j. Parachute Payments and Parachute Awards. Notwithstanding the
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provisions of Section 7(f), if, in connection with an Acquisition described
therein, a tax under Section 4999 of the Code would be imposed on the
Participant (after taking into account the exceptions set forth in Sections
280G(b)(4) and 280G(b)(5) of the Code), then the number of Awards which shall
become exercisable, realizable or vested as provided in such section shall be
reduced (or delayed), to the minimum extent necessary, so that no such tax would
be imposed on the Participant (the Awards not becoming so accelerated,
realizable or vested, the "Parachute Awards"); provided, however, that if the
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"aggregate present value" of the Parachute Awards would exceed the tax that, but
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for this sentence, would be imposed on the Participant under Section 4999 of the
Code in connection with the Acquisition, then the Awards shall become
immediately exercisable, realizable and vested without regard to the provisions
of this sentence. For purposes of the preceding sentence, the "aggregate present
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value" of an Award shall be calculated on an after-tax basis (other than taxes
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imposed by Section 4999 of the Code) and shall be based on economic principles
rather than the principles set forth under Section 280G of the Code and the
regulations promulgated thereunder. All determinations required to be made under
this Section 7(j) shall be made by the Company.
k. Amendment of Awards. The Board may amend, modify or terminate any
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outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that, except as otherwise provided in Section 7(i), the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
l. Conditions on Delivery of Stock. The Company will not be obligated
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to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
m. Acceleration. The Board may at any time provide that any Options
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shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of some or all restrictions, or that any other
stock-based Awards may become exercisable in full or in part or free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections
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280G and 4999 of the Code if a change in control of the Company occurs, or (ii)
disqualify all or part of the Option as an Incentive Stock Option.
8. Withholding
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The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee or recipient of an award any federal, state or
local taxes of any kind required by law to be withheld with respect to any
shares issues upon exercise of options under the Plan or the purchase of shares
subject to the award. Subject to the prior approval of the Company, which may be
withheld by the Company in its sole discretion, the optionee or recipient of an
award may elect to satisfy such obligation, in whole or in part, (i) by causing
the Company to withhold shares of Common Stock otherwise issuable pursuant to
the exercise of an option or the purchase of shares subject to an award or (ii)
by delivering to the Company shares of Common Stock already owned by the
optionee or award recipient. The shares so delivered or withheld shall have a
fair market value of the shares used to satisfy such withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined. An optionee or award recipient who has made an
election pursuant to this Section may only satisfy his or her withholding
obligation with shares of Common Stock which are not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements.
9. No Exercise of Option if Engagement or Employment Terminated for Cause
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If the employment of any Participant is terminated "For Cause," the
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Award may terminate, upon a determination of the Board, on the date of such
termination and the Option shall thereupon not be exercisable to any extent
whatsoever. For purposes of this Section 10, "For Cause" is conduct, as
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determined by the Board of Directors, involving one or more of the following:
(i) gross misconduct or inadequate performance by the Participant which is
injurious to the Company; or (ii) the commission of an act of embezzlement,
fraud or deliberate disregard of the rules or policies of the Company which
results in economic loss, damage or injury to the Company; or (iii) the
unauthorized disclosure of any trade secret or confidential information of the
Company (or any client, customer, supplier or other third party who has a
business relationship with the Company) or the violation of any noncompetition
or nonsolicitation covenant or assignment of inventions obligation with the
Company; or (iv) the commission of an act which constitutes unfair competition
with the Company or which induces any customer or prospective customer of the
Company to break a contract with the Company or to decline to do business with
the Company; or (v) the conviction of the Participant of a felony, either in
connection with the performance of his obligations to the Company or which shall
adversely affect the Participant's ability to perform such obligations; or (vi)
the commission of an act of fraud or breach of fiduciary duty which results in
loss, damage or injury to the Company; (vii) the failure of the Participant to
perform in a material respect his or her employment obligations without proper
cause. In making such determination, the Board shall act fairly and in utmost
good faith. The Board may in its discretion waive or modify the provisions of
this Section at a meeting of the Board with respect to any individual
Participant with regard to the facts and circumstances of any particular
situation involving a determination under this Section.
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10. Miscellaneous
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a. Definitions.
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(i) "Company," for purposes of eligibility under the Plan,
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shall include any present or future subsidiary corporations of Mainspring, Inc.,
as defined in Section 424(f) of the Code (a "Subsidiary"), and any present or
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future parent corporation of Mainspring, Inc., as defined in Section 424(e) of
the Code. For purposes of Awards other than Incentive Stock Options, the term
"Company" shall include any other business venture in which the Company has a
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direct or indirect significant interest, as determined by the Board in its sole
discretion.
(ii) "Code" means the Internal Revenue Code of 1986, as
----
amended, and any regulations promulgated thereunder.
(iii) "Employee" for purposes of eligibility under the Plan
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shall include a person to whom an offer of employment has been extended by the
Company.
b. No Right To Employment or Other Status. No person shall have
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any claim or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continued employment or any
other relationship with the Company. The Company expressly reserves the right at
any time to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan.
c. No Rights As Stockholder. Subject to the provisions of the
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applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder thereof.
d. Effective Date and Term of Plan. The Plan shall become
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effective on the date on which it is adopted by the Board. No Awards shall be
granted under the Plan after the completion of ten years from the date on which
the Plan was adopted by the Board, but Awards previously granted may extend
beyond that date.
e. Amendment of Plan. The Board may amend, suspend or terminate
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the Plan or any portion thereof at any time.
f. Governing Law. The provisions of the Plan and all Awards made
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hereunder shall be governed by and interpreted in accordance with the laws of
the state of incorporation of the Company (Delaware), without regard to any
applicable conflicts of law.
Adopted by the Board of Directors on:
February 9, 2000
Approved by the stockholders on:
March 29, 2000
