JuneBox.com, Inc.
2000 Equity Incentive Plan
as of June 20, 2000
Purpose JuneBox.com, Inc., a Wisconsin
corporation (the "Company"), wishes
to recruit, reward, and retain
employees, directors, and other
service providers, including
consultants. To further these
objectives, the Company hereby sets
forth the JuneBox.com, Inc. 2000
Equity Incentive Plan (the "Plan"),
effective as of June 20, 2000 (the
"Effective Date"), to provide
options ("Options") to employees,
directors, and other service
providers of the Company and its
Related Companies to purchase
shares of the Company's common
stock (the "Common Stock").
Participants All Employees of the Company and of
any Eligible Affiliates are
eligible for Options under this
Plan. Eligible individuals become
"optionees" when the Administrator
grants them an option under this
Plan. The Administrator may also
grant options to directors,
consultants, and certain other
service providers. The term
optionee also includes, where
appropriate, a person authorized to
exercise an Option in place of the
original recipient. A director
serving on behalf of an investor
may, in advance of a grant, request
that the Company grant the option
directly to the investor, provided
that the resulting grant may not
qualify for exemption from
registration under Rule 701 or for
registration on Form S-8.
Employee means any person employed
as a common law employee of the
Company or of a Related Company.
Administrator The Administrator is the Board of
Directors of the Company (the
"Board"), unless the Board
specifies a committee of the Board.
The Board of Directors of School
Speciality, Inc. ("SSI") may act as
Administrator of this Plan, either
directly or through its
compensation committee, so long as
SSI is a Related Company, subject
to ratification by the Company's
Board of any actions taken. After
an initial public offering ("IPO")
covering the Company's stock, the
Administrator will be the
<PAGE>
Compensation Committee of the
Board, unless the Board either
specifies another committee or acts
under the Plan as though it were
the Compensation Committee.
The Administrator is responsible
for the general operation and
administration of the Plan and for
carrying out its provisions and has
full discretion in interpreting and
administering the provisions of the
Plan. Subject to the express
provisions of the Plan, the
Administrator may exercise such
powers and authority of the Board
as the Administrator may find
necessary or appropriate to carry
out its functions. The
Administrator may delegate its
functions (other than those
described in the Granting of
Options section) to officers or
other Employees of the Company.
The Administrator's powers will
include, but not be limited to, the
power to amend, waive, or extend
any provision or limitation of any
Option. The Administrator may act
through meetings of a majority of
its members or by unanimous
consent.
Granting of Subject to the terms of the Plan,
Options the Administrator will, in
its sole discretion, determine
the persons who receive Options,
the terms of such Options,
the schedule for
exercisability (including any
requirements that the optionee
or the Company satisfy
performance criteria),
the time and conditions for
expiration of the Options, and
the form of payment due upon
exercise.
The Administrator's determinations
under the Plan need not be uniform
and need not consider whether
possible recipients are similarly
situated.
Options granted to Employees may be
"incentive stock options" ("ISOs")
within the meaning of Section 422
of the Internal Revenue Code of
1986 (the "Code"), or the
corresponding provision of any
subsequently enacted tax statute,
or nonqualified stock options
("NQSOs"), and the
<PAGE>
Administrator will specify which form
of option it is granting. (If the
Administrator fails to specify the
form of an option grant to an
Employee, it will be an ISO to the
extent the tax laws permit.) Any
options granted to outside
directors or other persons who are
not Employees must be nonqualified
stock options.
Substitutions The Administrator may grant Options
in substitution for options or
other equity interests held by
individuals who become Employees of
the Company or of a Related Company
as a result of the Company's or
Related Company's acquiring or
merging with the individual's
employer or acquiring its assets or
through transfer from SSI. In
addition, the Administrator may
provide for the Plan's assumption
of options granted outside the Plan
to persons who would have been
eligible under the terms of the
Plan to receive a grant, including
both persons who provided services
to any acquired company or business
and persons who provided services
to the Company or any Related
Company. If appropriate to conform
the Options to the interests for
which they are substitutes, the
Administrator may grant substitute
Options under terms and conditions
(including Exercise Price) that
vary from those the Plan otherwise
requires.
Awards in substitution for SSI's
options in connection with the
distribution by SSI of the
Company's Common stock to its
public stockholders (the
"Distribution") will retain their
pre-Distribution exercise schedule
and expiration dates, but any
Change of Control provisions will
thereafter refer to the Company
under the rules set forth in this
Plan for any Options that have not
become fully exercisable on or
before the Distribution.
Director Each director of the Company who is
Formula not an Employee of the Company
Options or a Related Company (an "Eligible
Director") will receive a formula
stock option ("Formula Option") as
of the Effective Date with respect
to 15,000 shares of Common Stock,
as will each Eligible Director
later appointed or elected to the
Board (with the grant made as of
the date of his first election or
appointment). Each Eligible
Director serving on the Board at
each annual meeting of the
Company's shareholders (beginning
with the first meeting after
December 31, 2000) will receive a
Formula Option as of that meeting
with respect to 5,000 shares of
Common Stock. The Exercise Price
for Formula Options will be the
Fair Market Value on the Date of
Grant.
Exercise Unless the Administrator specifies
Schedule otherwise, each Formula
Option will become exercisable as
to 20% of the covered shares on the
first anniversary of its Date of
Grant, an additional 30% on the
second anniversary, and the
remaining 50% on or after the third
anniversary. A Formula Option will
become exercisable in its entirety
upon the director's death,
disability, or attainment of age
70. Options will be forfeited to
the extent they are not then
exercisable if a director resigns
or fails to be reelected as a
director. Exercisable options will
expire as provided under Option
Expiration.
Date Of Grant The Date of Grant will be the date
as of which the Plan or the
Administrator grants an Option to a
person, as specified in the Plan or
in the Administrator's minutes or
other written evidence of action.
Exercise Price The Exercise Price is the value of
the consideration that an optionee
must provide in exchange for one
share of Common Stock. The
Administrator will determine the
Exercise Price under each Option
and may set the Exercise Price
without regard to the Exercise
Price of any other Options granted
at the same or any other time. The
Company may use the consideration
it receives from the optionee for
general corporate purposes.
The Exercise Price per share for
NQSOs may not be less than 100% of
the Fair Market Value of a share on
the Date of Grant. For ISOs, the
Exercise Price per share must be at
least 100% of the Fair Market Value
(on the Date of Grant) of a share
of Common Stock covered by the
Option; provided, however, that if
the Administrator decides to grant
an ISO to someone covered by Code
Sections 422(b)(6) and 424(d) (as a
more-than-10%-stockholder), the
Exercise Price must be at least
110% of the Fair Market Value.
<PAGE>
Fair Market Fair Market Value of a share
Value of Common Stock for
purposes of the Plan will be
determined as follows:
if the Company has no publicly-
traded stock, the
Administrator will determine
the Fair Market Value for
purposes of the Plan using any
measure of value it determines
in good faith to be
appropriate;
if the Common Stock trades on
a national securities
exchange, the closing sale
price on the Date of Grant;
if the Common Stock does not
trade on any such exchange,
the closing sale price as
reported by the National
Association of Securities
Dealers, Inc. Automated
Quotation System ("Nasdaq")
for such date;
if no such closing sale price
information is available, the
average of the closing bid and
asked prices that Nasdaq
reports for such date; or
if there are no such closing
bid and asked prices, the
average of the closing bid and
asked prices as reported by
any other commercial service
for such date.
For any date that is not a trading
day, the Fair Market Value of a
share of Common Stock for such date
will be determined by using the
closing sale price or the average
of the closing bid and asked
prices, as appropriate, for the
immediately preceding trading day.
The Administrator can substitute a
particular time of day or other
measure of "closing sale price" if
appropriate because of changes in
exchange or market procedures.
With respect to any Options granted
as of the IPO or conditioned on the
IPO, the Fair Market Value will be
treated as equal to the price
established in the IPO for any such
Options if they are granted on or
before the date on which the IPO's
underwriters price the IPO or
granted on the following day before
trading opens in the Common Stock.
The Administrator has sole
discretion to determine the Fair
Market Value for purposes of this
Plan, and all Options are
<PAGE>
conditioned on the optionees'
agreement that the Administrator's
determination is conclusive and
binding even though others might
make a different and also
reasonable determination.
Exercisability The Administrator will determine
the times and conditions for
exercise of each Option.
Options will become exercisable at
such times and in such manner as
the Administrator determines and
the Option Agreement indicates;
provided, however, that the
Administrator may, on such terms
and conditions as it determines
appropriate, accelerate the time at
which the optionee may exercise any
portion of an Option.
If the Administrator does not
specify otherwise, Options will
become exercisable as to one-sixth
of the covered shares on the sixth
month anniversary of the Date of
Grant and as to an additional
2.778% on the first day of each
succeeding month, so long as the
optionee remains employed or
continues his relationship as a
service provider, and will expire
as of the tenth anniversary of the
Date of Grant (unless they expire
earlier under the Plan or the
Option Agreement). The
Administrator has the sole
discretion to determine that a
change in service-providing
relationship eliminates any further
service credit on the exercise
schedule.
No portion of an Option that is
unexercisable at an optionee's
termination of service-providing
relationship (for any reason) will
thereafter become exercisable (and
the optionee will immediately
forfeit any unexercisable portions
at his termination of service-
providing relationship), unless the
Option Agreement provides
otherwise, either initially or by
amendment.
Termination of service-providing
relationship will not occur for
optionees who are Employees,
officers, or directors of SSI until
the earlier of (i) the date they
leave all service-providing
relationships with both SSI and the
Company and (ii) the first day of
the 13th month beginning after the
date SSI ceases to be a Related
Company, unless the SSI Board of
Directors or a committee of such
board agrees to other treatment.
<PAGE>
Change of Upon a Change of Control, all
Control Options will become fully
exercisable, unless the
optionee's Option Agreement
provides otherwise. A Change of
Control for this purpose means the
occurrence of any one or more of
the following events (and, before
the Distribution, also includes
comparable changes with respect to
SSI):
(i) sale of all or
substantially all of the
assets of the Company to one
or more individuals, entities,
or groups (other than an
Excluded Owner);
(ii) complete or substantially
complete dissolution or
liquidation of the Company
(other than into an Excluded
Owner);
(iii) a person, entity, or
group (other than an Excluded
Owner) acquires or attains
ownership of more than 50% of
the undiluted total voting
power of the Company's then-
outstanding securities
eligible to vote to elect
members of the Board ("Company
Voting Securities");
(iv) completion of a merger or
consolidation of the Company
with or into any other entity
(other than an Excluded Owner)
unless the holders of the
Company Voting Securities
outstanding immediately before
such completion, together with
any trustee or other fiduciary
holding securities under a
Company benefit plan, retain
control because they hold
securities that represent
immediately after such merger
or consolidation at least 50%
of the combined voting power
of the then outstanding voting
securities of either the
Company or the other surviving
entity or its ultimate parent;
or
(v) after an IPO, the
individuals who constitute the
Board immediately before a
proxy contest cease to
constitute at least a majority
of the Board (excluding any
Board seat that is vacant or
otherwise unoccupied)
immediately following the
proxy contest.
An "Excluded Owner" consists of
SSI, the Company, any Related
Company, any Company benefit plan,
or any
<PAGE>
underwriter temporarily
holding securities for an offering
of such securities.
Even if other tests are met, a
Change of Control has not occurred
under any circumstance in which the
Company files for bankruptcy
protection or is reorganized
following a bankruptcy filing. The
Administrator may determine that a
particular optionee's Options will
not become fully exercisable as a
result of what the Administrator,
in its sole discretion, determines
is the optionee's insufficient
cooperation with the Company with
respect to a Change of Control. In
addition, the acceleration will not
occur if it would prevent use of
"pooling of interest" accounting
for a reorganization, merger, or
consolidation of the Company that
the Board approves.
The Company's IPO will not
constitute a Change of Control.
The Company's Distribution will
constitute a Change of Control but
only for persons whose service-
providing relationship continues
with SSI but not with the Company
immediately after the Distribution.
The Administrator may allow
conditional exercises in advance of
the completion of a Change of
Control that are then rescinded if
no Change of Control occurs. The
Administrator may also provide that
the accelerations under the Change
of Control occur automatically up
to six months after the Change of
Control.
Substantial Upon a Change of Control that
Corporate is also a Substantial
Change Corporate Change, the Options will
become exercisable
(unless the Change of Control
section provides otherwise) and the
Plan and any unexercised Options
will terminate (after the
occurrence of one of the
alternatives set forth in the next
full paragraph) unless either (i)
such termination would prevent use
of "pooling of interest" accounting
for a reorganization, merger, or
consolidation of the Company that
the Board approves, (ii) an
agreement with an optionee provides
otherwise, or (iii) provision is
made in writing in connection with
such transaction for
the assumption or continuation
of outstanding Options (which
could include replacement by
SSI), or
the substitution for such
options or grants of any
options or grants covering the
stock or securities of
<PAGE>
a successor employer entity, or
a parent or subsidiary of such
successor or by SSI or a
successor to SSI, with
appropriate adjustments as to
the number and kind of shares
of stock and prices, in which
event the Options will
continue in the manner and
under the terms so provided.
If an Option would otherwise
terminate under the preceding
sentence and the Administrator
considers that the Fair Market
Value of the Common Stock as a
result of the Substantial Corporate
Change exceeds or is likely to
exceed the Exercise Price, the
Administrator will either
provide that optionees will
have the right, at such time
before the completion of the
transaction causing such
termination as the Board or
the Administrator reasonably
designates, to exercise any
unexercised portions of the
Option, including those
portions that the Change of
Control will make exercisable
or
cause the Company, or agree to
allow the successor, to cancel
each Option after payment to
the optionee of an amount in
cash, cash equivalents, or
successor equity interests
substantially equal to the
Fair Market Value under the
transaction minus the Exercise
Price for the shares covered
by the Option (and, where the
Board or the Administrator
determines it is appropriate,
any required tax
withholdings).
The Administrator may allow
conditional exercises in advance of
the completion of a Substantial
Corporate Change that are then
rescinded if no Substantial
Corporate Change occurs.
The Board or other Administrator
may take any actions described in
the Substantial Corporate Change
section, without any requirement to
seek optionee consent.
A "Substantial Corporate Change"
means any of the following events:
a sale as described in clause
(i) under Change of Control,
<PAGE>
a dissolution or liquidation
as described in clause (ii),
an ownership change as
described in clause (iii), but
with the percentage ownership
increased to 100%,
merger, consolidation, or
reorganization of the Company
with or into one or more
corporations or other entities
in which the Company is not
the surviving entity, other
than a transaction intended
primarily to change the
Company's state of
incorporation or that
satisfies clause (iv) under
Change of Control, or
any other transaction
(including a merger or
reorganization in which the
Company survives) approved by
the Board that results in any
person or entity (other than
an Excluded Owner) owning 100%
of Company Voting Securities.
Limitation on An Option granted to an Employee
ISOs will be an ISO only to
the extent that the aggregate Fair
Market Value (determined at the
Date of Grant) of the stock with
respect to which ISOs are
exercisable for the first time by
the optionee during any calendar
year (under the Plan and all other
plans of the Company and its
subsidiary corporations, within the
meaning of Code Section 422(d)),
does not exceed $100,000. This
limitation applies to Options in
the order in which such Options
were granted. If, by design or
operation, the Option exceeds this
limit, the excess will be treated
as an NQSO.
Method of To exercise any exercisable portion
Exercise of an Option, the optionee must:
Deliver notice of exercise to
the Secretary or Assistant
Secretary of the Company (or
to whomever the Administrator
designates), in a form
complying with any rules the
Administrator may issue,
signed or otherwise
authenticated by the optionee,
and specifying the number of
shares of Common Stock
underlying the portion of the
Option the optionee is
exercising;
Pay the full Exercise Price by
cash or a cashier's or
certified check for the shares
of Common Stock
<PAGE>
with respect
to which the Option is being
exercised, unless the
Administrator consents to
another form of payment (which
could include loans from the
Company or the use of Common
Stock); and
Deliver to the Administrator
such representations and
documents as the
Administrator, in its sole
discretion, may consider
necessary or advisable.
After an IPO, payment in full of
the Exercise Price need not
accompany the written notice of
exercise if the exercise complies
with a previously-approved cashless
exercise method, including, for
example, that the notice directs
that the stock certificates (or
other indicia of ownership) for the
shares issued upon the exercise be
delivered to a licensed broker
acceptable to the Company as the
agent for the individual exercising
the option and at the time the
stock certificates (or other
indicia) are delivered to the
broker, the broker will tender to
the Company cash or cash
equivalents acceptable to the
Company and equal to the Exercise
Price and any required withholding
taxes.
If the Administrator agrees to
allow an optionee to pay through
tendering shares of Common Stock to
the Company, the individual can
only tender stock he has held for
at least six months at the time of
surrender. Shares of stock offered
as payment will be valued, for
purposes of determining the extent
to which the optionee has paid the
Exercise Price, at their Fair
Market Value on the date of
exercise. The Administrator may
also, in its discretion, accept
attestation of ownership of Common
Stock and issue a net number of
shares upon Option exercise, or,
after an IPO, by having a broker
tender to the Company cash equal to
the Exercise Price and any
withholding taxes.
Option No one may exercise an Option more
Expiration than ten years after
its Date of Grant (or five years
for ISOs granted to 10% owners
covered by Code Sections 422(b)(6)
and 424(d)). An Optionee will
immediately forfeit and can never
exercise any portion of an Option
that is unexercisable at his
termination of service-providing
relationship (for any reason),
unless the Option Agreement
provides otherwise, either
initially or by amendment. Unless
the Option Agreement provides
otherwise, either initially or by
<PAGE>
amendment, no one may exercise
otherwise exercisable portions of
an Option after the first to occur
of:
Employment The 90th day after the
Termination date of termination of
service-providing relationship
(other than for death or
Disability), where termination
of service-providing
relationship means the time
when the employer-employee or
other service-providing
relationship between the
individual and the Company
(and all Related Companies)
ends for any reason. The
Administrator may provide that
Options terminate immediately
upon termination of employment
for "cause" under an
Employee's employment or
consultant's services
agreement or under another
definition specified in the
Option Agreement. Unless the
Option Agreement provides
otherwise, termination of
service-providing relationship
does not include instances in
which the Company immediately
rehires a common law employee
as an independent contractor.
The Administrator, in its sole
discretion, will determine all
questions of whether
particular terminations or
leaves of absence are
terminations of employment and
may decide to suspend the
exercise schedule during a
leave rather than to terminate
the option. Unless the Option
Agreement or the
Exercisability section
provides otherwise,
terminations of employment
include situations in which
the optionee's employer ceases
to be related to the Company
closely enough to be a Related
Company for new grants.
Gross Misconduct For the Company's termination
of the optionee's service-
providing relationship as a
result of the optionee's Gross
Misconduct, the time of such
termination. For purposes of
this Plan, "Gross Misconduct"
means the optionee has
committed fraud,
misappropriation,
embezzlement, or willful
misconduct that has
resulted or is likely to
result in material harm
to the Company or a
Related Company;
committed or been
indicted for or convicted
of, or pled guilty or no
contest to, any
<PAGE>
misdemeanor (other than
for minor infractions or
traffic violations)
involving fraud, breach
of trust,
misappropriation, or
other similar activity or
otherwise relating to the
Company, or any felony;
or
committed an act of gross
negligence or otherwise
acted with willful
disregard for the
Company's or a Related
Company's best interests
in a manner that has
resulted or is likely to
result in material harm
to the Company or a
Related Company.
If the optionee has a written
employment or other agreement
in effect at the time of his
termination that specifies
"cause" for termination,
"Gross Misconduct" for
purposes of his termination
will refer to "cause" under
the employment or other
agreement, rather than to the
foregoing definition.
Disability For disability, the earlier of
(i) the first anniversary of
the optionee's termination of
employment for disability and
(ii) 90 days after the
optionee no longer has a
disability, where "disability"
means the inability to engage
in any substantial gainful
activity because of any
medically determinable
physical or mental impairment
that can be expected to result
in death or that has lasted or
can be expected to last for a
continuous period of not less
than 12 months, or, if the
Company then maintains long-
term disability insurance, the
date as of which the
individual is eligible for
benefits under that insurance;
or
Death The date 24 months after the
optionee's death.
If exercise is permitted after
termination of service-providing
relationship, the Option will
nevertheless expire as of the date
that the former service provider
violates any covenant not to
compete or other post-employment
covenant in effect between the
Company or a Related Company and
the former employee or other
service provider. In addition, an
optionee who exercises an Option
more than 90 days after termination
of employment with the Company
and/or Eligible Affiliates will
only receive ISO treatment to the
extent the law permits, and becoming
<PAGE>
or remaining an employee
of another related company (that is
not an Eligible Affiliate) or an
independent contractor will not
prevent loss of ISO status because
of the formal termination of
employment.
Nothing in this Plan extends the
term of an Option beyond the tenth
anniversary of its Date of Grant,
nor does anything in this Option
Expiration section make an Option
exercisable that has not otherwise
become exercisable, unless the
Administrator specifies otherwise.
Option Option Agreements (which could be
Agreement certificates) will set
forth the terms of each Option and
will include such terms and
conditions, consistent with the
Plan, as the Administrator may
determine are necessary or
advisable. To the extent the
agreement is inconsistent with the
Plan, the Plan will govern. The
Option Agreements may contain
special rules.
Put and Call The Administrator may provide in
Rights; other Option Agreements or
Restrictions other agreements that the Company
has the right (or
obligation) to purchase outstanding
Options, or the shares received
from exercising an Option, under
certain circumstances, including
termination of service-providing
relationship for any reason or
death and may provide for rights of
first refusal. The Administrator
may distinguish between
unexercisable and exercisable
Options. The Administrator may
provide in Option Agreements that
individuals who receive shares from
exercising an Option may not
transfer such shares without
complying with the agreement's
conditions.
Stock Subject Except as adjusted below under
To Plan Corporate Changes,
the aggregate number of shares
of Common Stock that may be
issued under Options may not
exceed 20% of the shares of
Common Stock (including
preferred that is convertible
into common as though it had
been converted) issued and
outstanding as of the date on
which the Administrator seeks
to make an additional grant
(provided that a decrease in
shares outstanding will not
invalidate any previously
issued Option),
the maximum number of shares
that may be granted under
Options for a single
individual in a calendar year
may not exceed 1,200,000, and
<PAGE>
the aggregate number of shares
of Common Stock that may be
issued under ISOs may not
exceed 3,500,000.
The Common Stock will come from
either authorized but unissued
shares or from previously issued
shares that the Company reacquires,
including shares it purchases on
the open market or holds as
treasury shares. If any Option
expires, is canceled, or terminates
for any other reason, the shares of
Common Stock available under that
Option will again be available for
the granting of new Options (but
will be counted against that
calendar year's limit, if any, for
a given individual). Shares used
as payment for the Exercise Price
or any required withholdings will
be added back to the totals
available for issuance.
No adjustment will be made for a
dividend or other right (except a
stock dividend) for which the
record date precedes the date of
exercise.
The optionee will have no rights of
a stockholder with respect to the
shares of stock subject to an
Option except to the extent that
the Company has issued certificates
for, or otherwise confirmed
ownership of, such shares upon the
exercise of the Option.
The Company will not issue
fractional shares pursuant to the
exercise of an Option, unless the
Administrator determines otherwise,
but the Administrator may, in its
discretion, direct the Company to
make a cash payment in lieu of
fractional shares.
Person Who During the optionee's lifetime and
May Exercise except as provided
under Transfers, Assignments, and
Pledges, only the optionee or his
duly appointed guardian or personal
representative may exercise the
Options. After his death, his
personal representative or any
other person authorized under a
will or under the laws of descent
and distribution may exercise any
then exercisable portion of an
Option. If someone other than the
original recipient seeks to
exercise any portion of an Option,
the Administrator may request such
proof as it may consider necessary
or appropriate of the person's
right to exercise the Option.
Adjustments Subject to any required action by
Upon changes the Company (which it
In Capital agrees to promptly take) or its
stockholders, and subject to
the provisions of applicable
corporate law, if, after the Date
<PAGE>
Stock of Grant of an Option,
the outstanding shares of
Common Stock increase or
decrease or change into or are
exchanged for a different
number or kind of security
because of any
recapitalization,
reclassification, stock split,
reverse stock split,
combination of shares,
exchange of shares, stock
dividend, or other
distribution payable in
capital stock, or
some other increase or
decrease in such Common Stock
occurs without the Company's
receiving consideration
(excluding, unless the
Administrator determines
otherwise, stock repurchases),
the Administrator must make a
proportionate and appropriate
adjustment in the number of shares
of Common Stock underlying each
Option, so that the proportionate
interest of the optionee
immediately following such event
will, to the extent practicable, be
the same as immediately before such
event. (This adjustment does not
apply to Common Stock that the
optionee has already purchased,
which is subject to the adjustments
applicable to Common Stock.)
Unless the Administrator determines
another method would be
appropriate, any such adjustment to
an Option will not change the total
price with respect to shares of
Common Stock underlying the
unexercised portion of the Option
but will include a corresponding
proportionate adjustment in the
Option's Exercise Price. The Board
or other Administrator may take any
actions described in this section
without any requirement to seek
optionee consent.
The Administrator will make a
commensurate change to the maximum
number and kind of shares provided
in the Stock Subject to Plan
section.
All references to numbers of shares
of Common Stock in the Plan and in
any Option grants made on or before
the IPO Effective Date assume that
the Company has 17.5 million shares
of Common Stock outstanding and
thus relate to proportionate
amounts of that level of equity.
After the Company first has at
least 17.5 million shares
outstanding, numbers will not be
adjusted except as otherwise
provided in this Adjustments
section.
Any issue by the Company of any
class of preferred stock, or
securities convertible into shares
of common or preferred
<PAGE>
stock of any class, will not affect, and
no adjustment by reason thereof will
be made with respect to, the number
of shares of Common Stock subject
to any Option or the Exercise Price
except as this Adjustments section
specifically provides. The grant
of an Option under the Plan will
not affect in any way the right or
power of the Company to make
adjustments, reclassifications,
reorganizations or changes of its
capital or business structure, or
to merge or to consolidate, or to
dissolve, liquidate, sell, or
transfer all or any part of its
business or assets.
Related Employees of Eligible Affiliates
Company will be entitled to
Employees participate in the Plan, except as
otherwise designated by
the Board or the Administrator.
"Eligible Affiliate" means each of
the Related Companies, except as
the Administrator otherwise
specifies. For ISO grants,
"Related Company" means any
corporation in an unbroken chain of
corporations including the Company
if, at the time an Option is
granted to a Participant under the
Plan, each corporation (other than
the last corporation in the
unbroken chain) owns stock
possessing 50% or more of the total
combined voting power of all
classes of stock in another
corporation in such chain. Related
Company also includes a single-
member limited liability company
included within the chain described
in the preceding sentence. The
Board or the Administrator may use
a different definition of Related
Company for NQSOs and may include
other forms of entity at the same
level of equity relationship (or
such other level as the Board or
the Administrator specifies).
Legal The Company will not issue any
Compliance shares of Common Stock
under an Option until all
applicable requirements imposed by
Federal and state securities and
other laws, rules, and regulations,
and by any applicable regulatory
agencies or stock exchanges, have
been fully met. To that end, the
Company may require the optionee to
take any reasonable action to
comply with such requirements
before issuing such shares,
including compliance with any
Company black-out periods or
trading restrictions. No provision
in the Plan or action taken under
it authorizes any action that
Federal or state laws otherwise
prohibit.
The Plan is intended to conform to
the extent necessary with all
provisions of the Securities Act of 1933
<PAGE>
("Securities Act") and the
Securities Exchange Act of 1934 and
all regulations and rules the
Securities and Exchange Commission
issues under those laws.
Notwithstanding anything in the
Plan to the contrary, the
Administrator must administer the
Plan, and Options may be granted
and exercised, only in a way that
conforms to such laws, rules, and
regulations. To the extent
permitted by applicable law, the
Plan and any Options will be
treated as amended to the extent
necessary to conform to such laws,
rules, and regulations.
Purchase For Unless a registration statement
Investment under the Securities Act
And Other covers the shares of Common Stock
Restrictions an optionee receives
upon exercising his Option, the
Administrator may require,
at the time of such exercise, that
the optionee agree in writing to
acquire such shares for investment
and not for public resale or
distribution, unless and until the
shares subject to the Option are
registered under the Securities
Act. Unless the shares are
registered under the Securities
Act, the optionee must acknowledge:
that the shares purchased on
exercise of the Option are not
so registered,
that the optionee may not sell
or otherwise transfer the
shares unless
such sale or transfer
complies with all
applicable laws, rules,
and regulations,
including all applicable
Federal and state
securities laws, rules,
and regulations, and
either
the shares have been
registered under the
Securities Act in
connection with the
sale or transfer
thereof, or
counsel satisfactory
to the Company has
issued an opinion
satisfactory to the
Company that the
sale or other
transfer of such
shares is exempt
from registration
under the Securities
Act.
Additionally, the Common Stock,
when issued upon the exercise of an
Option, will be subject to any
other transfer restrictions, rights
of first refusal, rights of
repurchase, and
<PAGE>
voting agreements
set forth in or incorporated by
reference into other applicable
documents, including the Option
Agreements, or the Company's
articles or certificate of
incorporation, by-laws, or
generally applicable stockholders'
agreements.
The Administrator may, in its sole
discretion, take whatever
additional actions it deems
appropriate to comply with such
restrictions and applicable laws,
including placing legends on
certificates and issuing stop-
transfer orders to transfer agents
and registrars.
Tax Withholding The optionee must satisfy all
applicable Federal, state, and
local income and employment tax
withholding requirements before the
Company will deliver stock
certificates or otherwise recognize
ownership upon the exercise of an
Option. The Company may decide to
satisfy the withholding obligations
through additional withholding on
salary or wages. If the Company
does not or cannot withhold from
other compensation, the optionee
must pay the Company, with a
cashier's check or certified check,
the full amounts, if any, required
for withholding. Payment of
withholding obligations is due
before the Company will issue any
shares on exercise or, if the
Administrator so requires, at the
same time as is payment of the
Exercise Price. If the
Administrator so determines, the
optionee may instead satisfy the
withholding obligations by
directing the Company to retain
shares from the Option exercise, by
tendering previously owned shares,
or by attesting to his ownership of
shares (with the distribution of
net shares), or, after an IPO, by
having a broker tender to the
Company cash equal to the
withholding taxes. Without any
requirement to seek an optionee's
consent, the Company may require
the optionee to use one or more
specified brokerage firms to
exercise and to hold shares
received from Options until the
later of two years after exercise
or one year after the Date of
Grant.
Transfers, Unless the Administrator otherwise
Assignments, approves in advance in
And Pledges writing for estate planning or
other purposes, an Option
may not be assigned, pledged, or
otherwise transferred in any way,
whether by operation of law or
otherwise or through any legal or
equitable proceedings (including
bankruptcy), by the optionee to any
person, except by will or by
operation of applicable laws of
descent and distribution. If
necessary to comply with Rule 16b-3,
the optionee may not transfer or
pledge shares of Common
<PAGE>
Stock acquired upon exercise of an
Option until at least six months have
elapsed from (but excluding) the
Date of Grant, unless the
Administrator approves otherwise in
advance in writing. The
Administrator may, in its
discretion, expressly provide that
an optionee may transfer his
Option, without receiving
consideration, to (i) members of
his immediate family (children,
grandchildren, or spouse), (ii)
trusts for the benefit of such
family members, or (iii)
partnerships whose only partners
are such family members.
Amendment or The Board may amend, suspend, or
Termination terminate the Plan at
of Plan and any time, without the consent of
Options the optionees or their
beneficiaries; provided, however,
that such actions are
consistent with this section.
Except as required by law or by the
Substantial Corporate Change
section, the Administrator may not,
without the optionee's or
beneficiary's consent, modify the
terms and conditions of an Option
so as to materially adversely
affect the optionee. No amendment,
suspension, or termination of the
Plan will, without the optionee's
or beneficiary's consent, terminate
or materially adversely affect any
right or obligations under any
outstanding Options, except as
provided in the Substantial
Corporate Change Section.
Privileges of No optionee and no beneficiary or
Stock other person claiming
Ownership under or through such optionee will
have any right, title, or
interest in or to any shares of
Common Stock allocated or reserved
under the Plan or subject to any
Option except as to such shares of
Common Stock, if any, already
issued to such optionee.
Effect on Whether exercising an Option causes
Other Plans the optionee to accrue
or receive additional benefits
under any pension or other plan is
governed solely by the terms of
such other plan.
Limitations on Notwithstanding any other
Liability provisions of the Plan, no
individual acting as a director,
officer, other employee, or agent
of the Company will be liable to
any optionee, former optionee,
spouse, beneficiary, or any other
person for any claim, loss,
liability, or expense incurred in
connection with the Plan, nor will
such individual be personally
liable because of any contract or
other instrument he executes in
such other capacity. The Company
will indemnify and hold harmless
each director, officer, other
employee, or agent of the Company
to whom any duty or power relating
to the administration or
interpretation of the Plan has been
<PAGE>
or will be delegated, against any
cost or expense (including
attorneys' fees) or liability
(including any sum paid in
settlement of a claim with the
Board's approval) arising out of
any act or omission to act
concerning this Plan unless arising
out of such person's own fraud or
bad faith.
No Employment Nothing contained in this Plan
Contract constitutes an employment
contract between the Company and
the optionees. The Plan does not
give any optionee any right to be
retained in the Company's employ,
nor does it enlarge or diminish the
Company's right to end the
optionee's employment or other
relationship with the Company.
Applicable Law The laws of the State of Wisconsin
(other than its choice of law
provisions) govern this Plan and
its interpretation.
Duration of Unless the Board extends the Plan's
Plan term, the Administrator may not grant Options
after June 20, 2010. The Plan will
then terminate but will continue to
govern unexercised and unexpired
Options.
Approval of The Plan must be submitted to
The Plan Company stockholders for
their approval within 12 months
before or after the Board adopts
the Plan to qualify any Options
designated as ISOs for treatment as
such. If the stockholders do not
so approve the Plan, any
outstanding ISOs will be treated as
void and of no effect.
In addition, the Company will
submit the Plan to its public
stockholders on or before the first
meeting of the public stockholders
that occurs at least 12 months
after the Company's IPO.
