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EXHIBIT 4.1
IPC COMMUNICATIONS, INC.
1999 STOCK INCENTIVE PLAN
Section 1. Purpose
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The Plan authorizes the Compensation Committee of the Board to
provide employees, directors and consultants of the Corporation or its
Subsidiaries, who are in a position to contribute to the long-term success of
the Corporation and its Subsidiaries, with Options to acquire Common Stock of
the Corporation. The Corporation believes that this incentive program will cause
those persons to increase their interests in the welfare of the Corporation and
its Subsidiaries, and aid in attracting and retaining employees and consultants
of outstanding ability.
Section 2. Definitions
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Unless the context clearly indicates otherwise, the following
terms, when used in the Plan, shall have the meanings set forth in this Section:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Cause" means any of the following: (i) commission of the
any act of fraud or dishonesty with respect to the business of the Corporation
or its Subsidiaries, (ii) willful misconduct or gross negligence in connection
with the performance of a Grantee's duties to the Corporation and its
Subsidiaries, (iii) indictment for, or conviction of, any crime or an offence
involving moral turpitude, (iv) commission of any act injurious to the interest
of the Corporation, or (v) breach of any material provision of any applicable
employment or consulting agreement. Notwithstanding the foregoing, if any
Grantee is party to an employment or consulting agreement governing the terms of
his employment or consultancy with the Corporation or its Subsidiaries, and such
agreement includes a definition of cause, then for purposes hereof, cause shall
have the meaning ascribed thereto in such agreement.
(c) "Change in Control" shall mean (i) approval by the
stockholders of the Corporation of a transaction that would result in the
reorganization, merger or consolidation of the Corporation with one or more
persons, and, upon consummation thereof, would result in persons who,
immediately prior to such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934) at least 50%
of the securities entitled to vote generally in the election of directors of the
Corporation, beneficially owning (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in the aggregate immediately after
such transaction less than 50% of the securities entitled to vote generally in
the election of directors of the entity resulting from such transaction; (ii)
the acquisition of all or substantially all of the assets of the Corporation or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) of at least 50% of the outstanding securities
of the Corporation entitled to vote generally in the election of directors by
any person or by any persons acting in concert, or approval by the stockholder
of the Corporation of any transaction which would result in such an acquisition
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(other than by any person or persons who beneficially own (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934), immediately
after the closing date of the transactions contemplated by the Merger Agreement
at least 50% of the outstanding securities of the Corporation entitled to vote
generally in the election of directors); or (iii) a complete liquidation or
dissolution of the Corporation, or approval of the Corporation of a plan for
such liquidation or dissolution; provided, however, that in no event shall any
of the transactions contemplated by the Merger Agreement (or shareholder
approval thereof) constitute a Change in Control.
(d) "Committee" means the Compensation Committee of the Board;
provided, however, that with respect to any Option granted or to be granted to
any member of the Compensation Committee, Committee shall mean the Board acting
through a majority of its members who are not members of the Compensation
Committee.
(e) "Common Stock" means the common stock par value $.01 per
share, of the Corporation.
(f) "Consultant" means any person who is engaged to perform
services for the Corporation or any of its Subsidiaries, or has agreed to
perform services for the Corporation or any of its Subsidiaries, other than as
an Employee or Director.
(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Corporation" means IPC Communications, Inc., a Delaware
corporation.
(i) "Director" means any member of the Board.
(j) "Disability" means a physical or mental impairment that
causes the Grantee to be unable to engage in any substantial gainful activity
and that is expected to result in death or is expected to last for a continuous
period of at least 12 months. Notwithstanding the foregoing, if any Grantee is
party to any employment or consulting agreement governing the terms of his
employment or consultancy with the Corporation or its Subsidiaries, and such
agreement includes a definition of disability, then for purposes hereof,
disability shall have the meaning ascribed thereto in such agreement.
(k) "Employee" means any employee of the Corporation or any of
its Subsidiaries, or any person who has agreed to become an employee of the
Corporation or any of its Subsidiaries. The term Employee shall include
directors who are otherwise employed by the Corporation or any Subsidiary.
(l) "Fair Market Value" means, as of any date, the fair market
value of a share of Common Stock as determined by the Committee acting in good
faith in its sole discretion; provided, however, that if the Common Stock is
listed on a national securities exchange or quoted in an interdealer quotation
system, the fair market value shall be based on the last sales
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price or, if unavailable, the average of the closing bid and asked prices per
share of the Common Stock on such date (or, if there was no trading or quotation
in the Common Stock on such date, on the next preceding date on which there was
trading or quotation) as provided by one of such organizations. Notwithstanding
the foregoing, the Fair Market Value of a share of Common Stock on the closing
date of the transactions contemplated by the Merger Agreement shall be deemed to
be the "Cash Election Price" as defined in the Merger Agreement.
(m) "Incentive Stock Option" means an Option designated by the
Committee as an Option that is intended to be an incentive stock option within
the meaning of Section 422(b) of the Code.
(n) "Grantee" means a person granted an Option under the Plan.
(o) "Merger Agreement" means the Agreement and Plan of Merger,
dated as of December 18, 1997 by and between the Corporation and Arizona
Acquisition Corp., a Delaware corporation.
(p) "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option, or an Incentive Stock Option that, subsequent to the
date of grant thereof, fails to satisfy the requirements of Section 422(b) or
(d) of the Code.
(q) "Option" means an option granted pursuant to the Plan to
purchase shares of the Common Stock.
(r) "Plan" means this Stock Incentive Plan as set forth herein
and as amended from time to time.
(s) "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations thereunder as presently in effect of
hereafter amended.
(t) "Stock Option Agreement" shall mean a written agreement
between the Corporation and the Grantee, or a certificate accepted by the
Grantee, evidencing the grant of an Option hereunder and containing such terms
and conditions, not inconsistent with the Plan, as the Committee shall approve.
(u) "Subsidiary" shall mean (i) any corporation with respect
to which the Corporation owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of stock of such corporation, or (ii) any
entity which the Committee reasonably expects to become a Subsidiary within the
meaning of clause (i).
Section 3. Shares of Common Stock Subject to the Plan
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Subject to adjustment as provided in Section 7, the Common
Stock which may be issued pursuant to Options granted under the Plan shall not
exceed 1,538,322 shares in the aggregate (16% of outstanding on fully diluted
basis). Common Stock issuable under the Plan
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may be authorized but unissued shares or reacquired shares of Common Stock.
Common Stock subject to Options that are forfeited, lapse or terminate in whole
or in part for any reason, shall be available for issuance pursuant to other
Options.
SECTION 4. Administration of the Plan
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered
by the Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select the Employees, Directors and
Consultants to whom Options may be granted;
(ii) to determine the number of shares of Common
Stock subject to each such Option; provided, however, that
during any calendar year, no individual may be granted Options
with respect to more than 250,000 shares of Common Stock;
(iii) to determine whether an Option shall be an
Incentive Stock Option or a Nonqualified Stock Option;
(iv) to determine the terms and conditions of any
Option granted under the Plan (including, but not limited to,
the exercise price, the period, if any, over which Options
shall vest and become excercisable (which period may be
accelerated at any time in the discretion of the Committee),
and performance conditions relating to an Option, based in
each case on such considerations as the Committee shall
dertermine), and all other matters to be determined in
connection with an Option;
(v) to determine whether, to what extent and under
what circumstances the exercise price of an Option may be
paid, in cash, Common Stock, or other property, or an Option
may expire or be canceled, forfeited, or surrendered;
(vi) to determine the restrictions or conditions
related to the delivery, holding and disposition of shares of
Common Stock received upon excercise of an Option;
(vii) to prescribe the form of each Stock Option
Agreement, which need not be identical for each Grantee;
(viii) to adopt, amend, suspend, waive and rescind
such rules and regulations and appoint such agents as the
Committee may deem necessary of advisable to administer the
Plan;
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(ix) to correct any defect or supply any omission or
reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any Option, Stock Option Agreement or
other instrument hereunder; and
(x) to make all other decisions and determinations as
may be required under the terms of the Plan or as the
Committee may deem necessary or advisable for the
administration of the Plan.
The Committee may, at any time, grant new or additional options to any eligible
Employee, Director or Consultant who has previously received Options under the
Plan, or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Committee, without regard to such previously granted Options
or other options.
Other provisions of the Plan notwithstanding, the Board may
perform any function of the Committee under the Plan, including without
limitation for the purpose of ensuring that transactions under the Plan by
Grantees who are then subject to Section 16 of the Securities Exchange Act of
1934 in respect of the Corporation are exempt under Rule 16b-3 thereunder. In
any case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the
Board.
(b) MANNER OF EXCERCISE OF COMMITTEE AUTHORITY. Any action of
the Committee with respect to the Plan shall be final, conclusive and binding on
all persons, including the Corporation, Subsidiaries, Grantees, any person
claiming any rights under the Plan from or through any Grantee and stockholders,
except to the extent the Committee may subsequently modify, or take further
action not consistent with, its prior action. If not specified in the Plan, the
time at which the Committee must or may make any determination shall be
determined by the Committee, and any such determination may thereafter by
modified by the the Committee (subject to Section 10). The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Corporation or any
subsidiary of the Corporation the authority, subject to such terms as the
Committee shall determine, to perform such functions as the Committee may
determine, to the extent permitted under applicable law.
(c) LIMITATION OF LIABILITY. Each member of the Committee
shall be entitled to, in good faith, rely or act upon any report of other
information furnished to him by any officer or other employee of the Corporation
or any subsidiary, the Corporation's independent certified public accountants or
any executive compensation consultant, legal counsel or other proessional
retained by the Corporation to assist in the administration of the Plan. To the
fullest extent permitted by applicable law, no member of the Committee, nor any
officer or employee of the Corporation acting on behalf of the Committee, shall
be personally liable for any action, determination or interpretation taken or
made in good faith with respect to the Plan, and all
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members of the Committee any any officer or employee of the Corporation acting
on its behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action, determination or
interpretation.
Section 5. Option Terms
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Unless otherwise determined by the Committee and set forth in
a Stock Option Agreement, Options granted under the Plan shall contain the
following terms and conditions:
(a) TYPE OF OPTION. Each Option shall be an Incentive Stock
Option to the maximum extent permitted by Section 422(d) of the Code, and any
excess over such maximum shall be a Nonqualified Stock Option.
(b) EXERCISE PRICE. The exercise price per share of Common
Stock subject to each Option shall equal the Fair Market Value on the date the
Option is granted.
(c) VESTING. Each Option shall vest and become exercisable in
five equal installments on each of the first five anniversaries on the date the
Option is granted; provided, however that the Option shall be vested and
exercisable as to no less than 75% of the shares of Common Stock subject thereto
as of the end of any period of 30 consecutive trading days during which the Fair
Market value averages at least 300% of the Fair Market Value on the date the
Option is granted, and shall be vested and exercisable as to 100% of the shares
of Common Stock subject thereto as of the end of any period of 30 consecutive
trading days during which the Fair Market value averages at least 450% of the
Fair Market Value on the date the Option is granted; and provided further that
each Option shall become vested and exercisable in full immediately prior to a
Change in Control.
(d) TERMINATION. Options held by any Grantee shall terminate
upon the earliest of:
(i) the termination of the Grantee's employment,
directorship or consultancy with the Corporation and its
Subsidiaries for Cause;
(ii) the later of (x) 180 days after the Grantee's
termination of employment, directorship or consultancy with
the Corporation and its Subsidiaries (which shall be deemed to
include the sale of any Subsidiary of the Corporation that
employs such Grantee) for any reason other than Cause, death
or Disability, or (y) 180 days following the end of any
"blackout period" imposed by the Corporation's general counsel
that is in effect on the date of such termination; provided,
however, that during any such 180-day period, the Options
shall be exercisable only to the extent vested and exercisable
as of the date of such termination;
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(iii) one year after the Grantee's termination of
employment, directorship or consultancy with the Corporation
and its Subsidiaries by reason of death or Disability;
provided, however, that during any such one year period, the
Options shall be exercisable to the extent such Options would
have been vested and exercisable pursuant to Section 5(c) (but
without regard to the provisos contained therein) as of the
anniversary of the date of grant next following such
termination, assuming such termination had not occurred;
(iv) the tenth anniversary of the date of grant; and
(v) upon the consummation of any transaction whereby
the Corporation (or any successor to the Corporation or
substantially all of its business) becomes a wholly-owned
subsidiary of any other corporation (but after giving effect
to Section 5(c)), unless such other corporation shall continue
or assume the Plan as it relates to Options then outstanding
(in which case such other corporation shall be treated as the
Corporation for all purposes hereunder, and, pursuant to
Section 7, the Committee of such other corporation shall make
appropriate adjustment in the number and kind of shares of
Common Stock subject thereto and the exercise price per share
thereof to reflect consummation of such transaction). If the
Plan is not to be so assumed, the Corporation shall notify the
Grantee of consummation of such transaction at least ten days
in advance thereof. If such other corporation is an affiliate
of the Corporation immediately prior to consummation of any
such transaction, Options shall not terminate and shall remain
Options to purchase Common Stock of the Corporation unless the
Plan is in fact so continued or assumed by such other
corporation.
Section 6. Exercise of Options
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A Grantee shall exercise an Option by delivery of written
notice to the Corporation setting forth the number of shares with respect to
which the Option is to be exercised, together with cash, certified check, bank
draft, wire transfer, or postal or express money order payable to the order of
the Corporation for an amount equal to the exercise price of such shares and any
income tax required to be withheld. The Committee may, in its sole discretion,
permit a Grantee to pay all or a portion of the exercise price or tax
withholding obligations by delivery of Common Stock or other property (including
notes or other contractual obligations of the Grantee to make payment on a
deferred basis, such as through "cashless exercise" arrangements, to the extent
permitted by applicable law), and the methods by which Common Stock will be
delivered or deemed to be delivered by the Grantee.
Section 7. Adjustment upon Changes in Capitalization
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In the event any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
exchange of Common Stock or other securities, Common Stock dividend or other
special and nonrecurring dividend or distribution
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(whether in the form of cash, securities or other property), liquidation,
dissolution, or other similar corporate transaction or event, affects the Common
Stock such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Grantees under the Plan, then the Committee shall,
in such manner as it may deem equitable, adjust any or all of (i) the number and
kind of shares of Common Stock deemed to be available thereafter for grants of
Options under Section 3, (ii) the number and kind of shares of Common Stock that
may be delivered or deliverable in respect of outstanding Options, (iii) the
number of shares with respect to which Options may be granted to a given Grantee
in the specified period as set forth in Section 4(a)(ii), and (iv) the exercise
price. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Options (including, without
limitation, cancellation of Options in exchange for the in-the-money value, if
any, of the vested portion thereof, or substitution of Options using stock of a
successor or other entity) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence)
affecting the Corporation or any Subsidiary or the financial statements of the
Corporation or any Subsidiary, or in response to changes in applicable laws,
regulations, or accounting principles.
Section 8. Restrictions on Issuance of Shares
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The Corporation shall not be obligated to deliver Common Stock
upon the exercise or settlement of any Option or take any other action under the
Plan until the Corporation shall have determined that applicable federal and
state laws, rules, and regulations have been complied with and such approvals of
any regulatory or governmental agency have been obtained and contractual
obligations to which the Option may be subject have been satisfied. The
Corporation, in its discretion, may postpone the issuance or delivery of Common
Stock under any Option until completion of such stock exchange listing or
registration or qualification of Common Stock or other required action under any
federal or state law, rule, or regulation as the Corporation may consider
appropriate, and may require any Grantee to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of Common Stock under the Plan. The Corporation shall file
a registration statement on Form S-8 (or other appropriate form) with respect to
the Common Stock to be issued pursuant to the Plan and shall use its best
efforts to maintain the effectiveness of such registration statement (and
maintain the currency of any related prospectus) for so long as Options are
outstanding or may be granted under the Plan.
Section 9. General Provisions
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(a) Each Option grant shall be evidenced by a Stock Option
Agreement.
(b) The grant of an Option in any year shall not give the
Grantee any right to similar grants in future years or any right to continue
such Grantee's employment relationship with the Corporation. All Grantees shall
remain subject to discharge to the same extent as if the Plan were not in
effect.
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(c) No Grantee, and no beneficiary or other persons claiming
under or through the Grantee shall have any right, title or interest by reason
of any Option to any particular assets of the Corporation, or any shares of
Common Stock allocated or reserved for the purposes of the Plan or subject to
any Option except as set forth herein. The Corporation shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.
(d) Unless otherwise permitted in the discretion of the
Committee with respect to Nonqualified Stock Options, no Option or other right
under the Plan may be sold, transferred, assigned, pledged or otherwise
encumbered, except by will or the laws of descent and distribution, and an
Option shall be exercisable during the Grantee's lifetime only by the Grantee.
(e) The Corporation shall have the right to require that the
Grantee make such provision, or furnish the Corporation such authorization,
necessary or desirable so that the Corporation may satisfy its obligation, under
applicable laws, to withhold or otherwise pay for income or other taxes of the
Grantee attributable to the grant, exercise or cancellation of Options granted
under the Plan or the sale of Common Stock issued with respect to Options. This
authority shall include authority to withhold or receive Common Stock or other
property and to make cash payments in respect thereof in satisfaction of a
Grantee's tax obligations.
Section 10. Amendment or Termination
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The Board may alter, amend, suspend, discontinue or terminate
the Plan at any time; provided, however, that no such action shall adversely
affect the rights of Grantees of Options previously granted hereunder and,
provided further, however, that any stockholder approval necessary or desirable
in order to comply with applicable law, regulation or listing requirement shall
be obtained in the manner required therein.
Section 11. Effective Date of Plan
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The Plan shall be effective immediately after the closing of
the transactions contemplated by the Merger Agreement, subject to the approval
of the Plan by the Corporation's shareholders either before or after such
effective date.
