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EXHIBIT 4.1
2000 STOCK PLAN
1. PURPOSE. The purposes of this 2000 Stock Plan (the "Plan") of Pacific CMA,
Inc., a Colorado corporation (the "Company"), are (a) to ensure the retention of
the services of existing executive personnel, key employees, and directors of
the Company or its affiliates; (b) to attract and retain competent new executive
personnel, key employees, and directors; (c) to provide incentive to all such
personnel, employees and directors to devote their utmost effort and skill to
the advancement and betterment of the Company, by permitting them to participate
in the ownership of the Company and thereby in the success and increased value
of the Company; and (d) to allow vendors, service providers, consultants,
business associates, strategic partners, and others, with or that the Board of
Directors anticipates will have an important business relationship with the
Company or its affiliates, the opportunity to participate in the ownership of
the Company and thereby to have an interest in the success and increased value
of the Company.
2. AWARD OPPORTUNITIES.
Awards (individually, an "Award"; collectively, the "Awards") under the
Plan may be granted in the form of (a) incentive stock options ("Incentive Stock
Options") to acquire shares of voting and/or non-voting common stock of the
Company ("Common Stock"), as provided in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), (b) non-statutory stock options
("Nonstatutory Stock Options") to acquire Common Stock, and (c) Common Stock
that is restricted and must be purchased by the Plan participant ("Restricted
Common Stock").
Incentive Stock Options and Nonstatutory Stock Options may hereinafter be
referred to individually as an "Option" and collectively as "Options."
3. ADMINISTRATION.
(A) COMMITTEE. The Plan shall be administered by the Company's Board of
Directors (the "Board") or by a committee (the "Committee") of the Board
authorized by the Board. The Committee shall consist of two or more
persons, at least two of whom shall be directors of the Company, who shall
be appointed by, and serve at the pleasure of, the Board. No person serving
as a member of the Board or the Committee shall act on any matter relating
solely to such person's own interest under the Plan or any Option or shares
thereunder. At any time that the Company has a class of equity securities
registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (i) only directors who, at the time of
service, qualify as "disinterested persons" within the meaning of Rule
16b-3 under the Exchange Act shall be members of the Committee and (ii) all
references in the Plan to the Board shall refer only to the Committee.
(B) AUTHORITY. The Board, or the Committee, to the extent the Board has
delegated such authority to the Committee, shall have full and final
authority with respect to the Plan (i) to interpret all provisions of the
Plan consistent with law; (ii) to determine the persons who will receive
Awards; (iii) to determine the frequency of grant of Awards; (iv) to
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determine the type of, the number of shares of Common Stock subject to, and
the exercise period and price of each Option to be granted to each eligible
persons; (v) to determine the type of, the number and the purchase price of
shares of Restricted Common Stock to be granted to each person; (vi) to
prescribe the form and terms of instruments evidencing any Award granted
under the Plan; (vii) to determine the term of the restricted period and
other conditions applicable to Restricted Common Stock; (viii) to adopt,
amend and rescind general and special rules and regulations for the Plan's
administration; and (ix) to make all other determinations necessary or
advisable for the administration of the Plan. The Board may, with the
consent of the person who has been granted an Award under the Plan, amend
the instrument regarding such Award consistent with the provisions of the
Plan, unless otherwise required by law.
(C) INDEMNIFICATION. No member of the Board or the Committee shall be
liable for any action taken or determination made in good faith. The
members of the Board and the Committee shall be indemnified by the Company
for any acts or omissions in connection with the Plan to the full extent
permitted by Colorado and Federal laws.
4. ELIGIBILITY. Participation in the Plan shall be determined by the Board and
shall be limited to executive personnel, key employees, and directors of the
Company or its affiliates, and vendors, service providers, consultants, business
associates, strategic partners, and others with or that the Board anticipates
will have an important business relationship with the Company or its affiliates
(individually, a "Participant"; collectively, the "Participants").
5. STOCK SUBJECT TO PLAN.
Subject to adjustments as provided in Section 8(A) hereof, the aggregate
amount of Common Stock as to which Awards may be granted under the Plan shall be
2,200,000, and may be authorized but unissued shares or treasury shares.
The Board, or its designee, shall maintain records showing the cumulative
number of shares of Common Stock underlying outstanding Options, the cumulative
number of shares of Common Stock subject to right of purchase as Restricted
Common Stock and the applicable restricted periods under the Plan, and the
number of shares of Common Stock delivered in settlement of any other Award
under the Plan.
If an Option granted hereunder shall expire or terminate for any reason
without having been fully exercised, or if any shares of Common Stock to be
issued pursuant to an Award are not issued for any reason then, the shares of
Common Stock underlying the unexercised portion of such expired or terminated
Option and by the unissued portion of such Award shall again become available
for the purposes of the Plan.
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6. OPTIONS.
(A) ALLOTMENT OF SHARES.
The Board may, in its sole discretion and subject to the provisions of
the Plan, grant to Participants, at such times as it deems appropriate
following adoption of the Plan by the Board, Options to purchase Common
Stock, subject to the approval of the Plan by the Company's stockholders.
Furthermore, grants intended to be Incentive Stock Options are subject to
the limitations set forth in paragraph (F) of this Section 6.
Options may be allotted to Participants in such amounts as the Board,
in its sole discretion, may from time to time determine. Notwithstanding
the foregoing, only Participants who qualify to receive Incentive Stock
Options under the applicable provisions of the Code shall be eligible to be
granted an Incentive Stock Option pursuant to the Plan. All Participants
shall be eligible to be granted any other form of Award available under the
Plan.
(B) EXERCISE PRICE.
The price per share at which each Nonstatutory Stock Option granted
under the Plan may be exercised, as to any particular Nonstatutory Stock
Option, shall be determined by the Board at the time such Nonstatutory
Stock Option is granted. The exercise price for any share of Common Stock
underlying any Option that is intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code shall be not less than
one hundred percent (100%) of the fair market value of one share of Common
Stock at the time such Option is granted. In the case of a Participant who
owns shares representing more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Company or of its
affiliates (as determined under Section 424(d) of the Code) at the time the
Incentive Stock Option is granted, such exercise price shall not be less
than one hundred ten percent (110%) of the fair market value of one share
of Common Stock at the time such Option is granted.
If the Common Stock is listed on a national securities exchange, the
high and low selling prices thereof are reported on Nasdaq, or the bid and
asked closing prices thereof are quoted on the OTC Bulletin Board at the
time an Option is granted, then the fair market value of one share of
Common Stock shall be the average of the highest and lowest selling prices
of the Common Stock as reported by such exchange, as reported on Nasdaq, or
as quoted on the OTC Bulletin Board on the date such Option is granted or,
if there were no sales of Common Stock on said date, then on the next prior
business day on which there were sales of Common Stock. If the Common Stock
is traded other than on a national securities exchange, the high and low
selling prices thereof are not reported on Nasdaq, or the bid and asked
prices thereof are not quoted on the OTC Bulletin Board at the time an
Option is granted, then the fair market value of one share of Common Stock
shall be the determined using such method on the next prior business day on
which such trading or quoting occurred. If no such trading or quoting is
available, then the Board shall make a good faith determination of the
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fair market value of one share of Common Stock using any reasonable method
of valuation. Unless another date is specified by the Board, the date on
which the Board approves the granting of an Option shall be deemed the date
on which the Option is granted.
(C) OPTION PERIOD. An Option granted under the Plan shall terminate, and
the right of the Participant (or the Participant's estate, personal
representative, or beneficiary) to exercise the Option shall expire, on the
date determined by the Board at the time the Option is granted (the
"Expiration Date"). No Incentive Stock Option shall be exercisable more
than ten (10) years after the date on which it was granted, and no
Nonstatutory Stock Option shall be exercisable more than ten (10) years and
one (1) day after the date on which it was granted. In the case of a
Participant who owns shares representing more than ten percent (10%) of the
total combined voting power of all classes of capital stock of the Company
or of its affiliates (as determined under Section 424(d) of the Code), no
Incentive Stock Option shall be exercisable more than five (5) years after
the date on which it is granted.
(D) VESTING SCHEDULE; TERMINATION. An Option granted under the Plan
shall be considered terminated in whole or in part, to the extent that, in
accordance with the provisions of the Plan, it can no longer be exercised
for the Common Stock originally subject to the Option.
(1) VESTING SCHEDULE. All Options granted hereunder shall be
subject to an eighteen-month vesting schedule whereby one-third (1/3)
of such Option shall be vested immediately upon grant, one third (1/3)
shall vest at nine months after grant, and one-third (1/3) shall vest
at eighteen months after grant, unless otherwise provided herein,
shall be then exercisable; PROVIDED, HOWEVER, that any such vesting
requirement of any outstanding Option granted hereunder shall be fully
accelerated in the event of a Sale, as that term is defined
hereinafter, so long as such acceleration would not result in a
"modification" (as defined in Section 424(h)(3) of the Code) of any
Incentive Stock Option. Notwithstanding the immediately preceding
vesting schedule, the Board in its sole discretion may modify, in any
manner and to any extent it deems appropriate, or waive any or all of
such vesting requirements.
(2) TERMINATION FOR ANY REASON EXCEPT CAUSE, DEATH, OR DISABILITY. If
the Participant (who is an employee or non-employee advisor,
consultant, or director) terminates his relationship as an employee or
non-employee advisor, consultant, or director or is terminated for any
reason, except cause, death, or permanent and total disability, the
Option, to the extent (and only to the extent) that it would have been
exercisable by the Participant on the date of termination, may be
exercised by the Participant no later than three (3) months after the
date of termination, but in any event no later than the Expiration
Date.
(3) TERMINATION FOR CAUSE. If the Participant (who is an
employee or non-employee advisor, consultant, or director) is
terminated for cause, the Option, to the
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extent (and only to the extent) that it would have been exercisable by
the Participant on the date of termination, may be exercised by the
Participant no later than fifteen (15) days after the date of
termination, but in any event no later than the Expiration Date.
(4) TERMINATION BECAUSE OF DEATH OR DISABILITY. If the
Participant (who is an employee or non-employee advisor, consultant,
or director) is terminated because of death or permanent and total
disability of the Participant, the Option, to the extent that it is
exercisable by the Participant on the date of termination, may be
exercised by the Participant (or the Participant's legal
representative) no later than one (1) year after the date of
termination, but in any event no later than the Expiration Date.
(E) MANNER OF EXERCISE AND PAYMENT.
(1) EXERCISE.
Each Option granted under the Plan shall be deemed exercised to
the extent that the Participant shall deliver to the Company written
notice of the number of full shares of Common Stock underlying the
whole or that portion of the Option then being exercised. The
Participant shall at the same time tender to the Company payment in
full for such shares, which payment may be in cash or, subject to
Section 6(E)(2), in previously issued shares of Common Stock of the
same class for which the Option is being exercised or partly in cash
and partly in previously issued shares of Common Stock of such same
class, and shall comply with such other reasonable requirements as the
Board may establish, pursuant to Section 8(C). These provisions shall
not preclude exercise of an Option, or payment of the exercise price
thereunder, by any other proper legal method specifically approved by
the Board.
Subject to Colorado law, no person, estate, or other entity shall
have any of the rights of a stockholder with reference to shares
subject to an Option until a certificate representing the shares of
Common Stock has been delivered.
An Option granted under the Plan may be exercised for any lesser
number of whole shares than the full amount for which it could then be
exercised; PROVIDED, HOWEVER, that the Board may require, in the
agreement evidencing an Option, any partial exercise to be with
respect to a specified minimum number of shares of Common Stock. Such
a partial exercise of an Option shall not affect the right to exercise
the Option from time to time in accordance with the Plan for the
remaining shares of Common Stock underlying the Option.
(2) PAYMENT IN SHARES OF COMMON STOCK.
The value of shares of Common Stock delivered for payment of the
exercise price of an Option shall be the fair market value of the
Common Stock determined as provided in Section 6(B) on the date the
Option is exercised. If certificates representing shares of Common
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Stock are used to pay all or part of the exercise price of an Option,
separate certificates shall be delivered to the Company representing
the number of shares of Common Stock so used, and an additional
certificate or certificates shall be delivered to the Participant
representing the additional shares of Common Stock to which the
Participant is entitled as a result of exercise of the Option.
Notwithstanding the foregoing and the provisions of Section 6(E)(1),
the Board, in its sole discretion, may refuse to accept shares of
Common Stock delivered for payment of the exercise price, in which
event any certificates representing such shares of Common Stock that
were actually received by the Company with the written notice of
exercise shall be returned to the exercising Participant, together
with notice by the Company of the refusal of the Company to accept
such shares of Common Stock as partial or full payment of the exercise
price.
In the event shares are delivered for payment of the exercise
price of such Option as herein provided, then, at the discretion of
the Board, the Participant may be granted an Option to purchase that
quantity and class of Common Stock equal to the quantity and class of
Common Stock delivered in partial or full payment of the exercise
price, with an exercise price equal to the current fair market value
of such Common Stock, and with a term of such Option extending to the
expiration date of the Option for which partial or full payment of the
exercise price thereof was accomplished by delivery of previously
issued shares of Common Stock.
(3) LOANS. The Company may make loans to Participants or their
respective lawful successors as the Board, in its sole discretion, may
determine (including a grantee who is a director or officer of the
Company) in connection with the exercise of Options granted under the
Plan; PROVIDED, HOWEVER, that the Board shall not authorize the making
of any loan where the possession of such discretion or the making of
such loan would result in a "modification" (as defined in Section
424(h)(3) of the Code) of any Incentive Stock Option. Such loans shall
be subject to the following terms and conditions and such other terms
and conditions as the Board shall determine at the time the loan is
made as are not inconsistent with the Plan. Such loans shall bear
interest at such rates as the Board shall determine from time to time,
which rates may be below then current market rates (except in the case
of Incentive Stock Options). In no event may any such loan exceed the
fair market value, at the date of exercise, of the shares of Common
Stock underlying the Option, or portion thereof, exercised by the
Participant. No loan shall have an initial term exceeding one (1)
year, but any such loan may be renewable at the discretion of the
Board. At the time a loan is made, Common Stock of the same class for
which the Option is being exercised having a fair market value at
least equal to the principal amount of the loan shall be pledged by
the Participant to the Company as security for payment of the unpaid
balance of the loan. Every loan shall comply with all applicable laws,
regulations, and rules of the Board of Governors of the Federal
Reserve System and any other governmental agency having jurisdiction.
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(4) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT.
Participants who are subject to Section 16 of the Exchange Act are
hereby advised that reliance on Rule 16b-3 may require that any equity
security of the Company acquired upon exercise of an Option by such
person be held at least until the date six months after the date of
grant of the Option.
(F) LIMITATIONS ON EXERCISE. In the case of Options intended to be
Incentive Stock Options, the aggregate fair market value, determined as of
the date of grant, of the shares of Common Stock underlying such Options
that are exercisable for the first time by a Participant shall be limited
to $100,000 per calendar year.
(G) WRITTEN STOCK OPTION AGREEMENT. Each Option shall be evidenced by a
written stock option agreement in a form approved by the Board. Each stock
option agreement shall be executed by the Company and by the Participant
receiving the Option.
7. RESTRICTED COMMON STOCK.
(A) GRANTING OF RESTRICTED COMMON STOCK. The Board may, in its sole
discretion and subject to the provisions of the Plan, grant to Participants
at such times as it deems appropriate following adoption of the Plan by the
Board, the right to purchase shares of Restricted Common Stock, subject to
approval of the Plan by the Company's stockholders.
(B) PRICE OF RESTRICTED COMMON STOCK. The price per share at which
Restricted Common Stock may be purchased by a Participant under the Plan
shall be determined by the Board at the time such Restricted Common Stock
is purchased. The purchase price per share of Restricted Common Stock as to
any particular Restricted Common Stock grant shall also be known as the
"Initial Price Per Share."
(C) TERMS OF RESTRICTED COMMON STOCK.
Unless otherwise established by the Board, all restrictions applicable
to the Restricted Common Stock shall lapse as follows: All Restricted
Common Stock granted hereunder shall be subject to an eighteen-month
schedule whereby restrictions in respect of one-third (1/3) of such
Restricted Common Stock shall lapse immediately upon grant, an additional
one third (1/3) shall lapse nine months after grant, and an additional
one-third (1/3) shall lapse eighteen months after grant. Each grant of
Restricted Common Stock may have a different Restricted Period. The Board
may in its sole discretion, at the time of the grant of Restricted Common
Stock is made, prescribe conditions for the incremental lapse of
restrictions during the Restricted Period and for the lapse or termination
of restrictions upon the satisfaction of other conditions with respect to
all or any portion of the Restricted Common Stock. The Board may also, in
its sole discretion, at any time shorten or terminate the Restricted Period
or waive any conditions for the lapse or termination of restrictions with
respect to all or any portion of the shares of Restricted Common Stock.
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Unless another date is specified, the date on which the Board approves
the grant of Restricted Common Stock shall be deemed the date on which the
Restricted Common Stock is granted.
In order for Participant to exercise his right to purchase shares of
Restricted Common Stock under a grant (unless that payment date is further
extended by the Board), within thirty (30) days after the date of grant,
such Participant shall execute, retroactive to the date of such grant, an
agreement reflecting the number of shares the Participant is purchasing and
the conditions imposed upon the purchase of such shares as determined by
the Board.
As payment for the purchase price of the Restricted Common Stock, the
Participant may tender to the Company payment in cash, past or future
services (valued at their fair market value on the date the Restricted
Common Stock is granted by the Board at its sole discretion), in previously
issued shares of Common Stock (taken at their fair market value on the date
the Restricted Common Stock is granted determined as provided in Section
6(B)) or in any combination thereof and shall comply with such other
reasonable requirements as the Board may establish, pursuant to this
Section 8(C). These provisions shall not preclude payment of the purchase
price of Restricted Common Stock by any other proper legal method
specifically approved by the Board. Notwithstanding the foregoing, the
Board, in its sole discretion, may refuse to accept shares of Common Stock
in payment of the purchase price, in which event any certificates
representing such shares of Common Stock that were actually received by the
Company as attempted payment for the Restricted Common Stock shall be
returned to the Participant, together with notice by the Company of the
refusal of the Company to accept such shares of Common Stock as partial or
full payment for the Restricted Common Stock.
A stock certificate representing the number of shares of Restricted
Common Stock granted to and purchased by a Participant shall be registered
in the Participant's name but shall be held in custody by the Company for
the Participant's account. The Participant shall have the rights and
privileges of a stockholder as to such shares of Restricted Common Stock,
including the right to vote such shares (in the case of voting Restricted
Common Stock), except that (i) the Participant shall not be entitled to
delivery of such certificate until the expiration or termination of the
Restricted Period and the satisfaction of any other conditions prescribed
by the Board, (ii) none of the shares may be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of during the Restricted
Period and until the satisfaction of any other conditions prescribed by the
Board, and (iii) subject to the provisions contained in Section 8(D), all
of the Restricted Common Stock, at the sole option of the Company (to be
exercised in writing, if at all, within thirty (30) days of the occurrence
of an employment or non-employee event, as set forth herein below), shall
be forfeited and all rights of the Participant to such Restricted Common
Stock shall terminate without further obligation on the part of the Company
(except for the obligation of the Company to purchase the Restricted Common
Stock from the Participant at the Initial Price Per Share) in the event the
Participant has not remained in the continuous employment of the Company or
its affiliates or in continuous service as a non-employee advisor,
consultant, or director until the expiration or termination of the
Restricted Period and the satisfaction of any other conditions prescribed
by the Board applicable to such Restricted Common Stock. The Board shall
decide in each case to what extent leaves of
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absence for government or military service, illness, temporary disability
or other reasons shall not, for this purpose, be deemed interruption of
continuous employment or service as a non-employee advisor, consultant, or
director.
At the discretion of the Board, cash and stock dividends may be either
currently paid or withheld by the Company for the Participant's account,
and interest may be paid on the amount of cash dividends withheld at a rate
and subject to such terms as determined by the Board.
Each certificate evidencing shares of Restricted Common Stock shall be
inscribed with a legend substantially as follows:
"The shares of common stock of Pacific CMA, Inc., evidenced by this
certificate, are subject to the terms and restrictions of Pacific CMA,
Inc.'s 2000 Stock Plan. Such shares are subject to forfeiture or
cancellation under the terms of said Plan and shall not be sold,
transferred, assigned, pledged, encumbered, or otherwise alienated or
hypothecated except pursuant to the provisions of said Plan, a copy of
which is available from Pacific CMA, Inc., upon request."
Upon the expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the Board or at such
earlier time as provided for herein, the restrictions applicable to the
shares of Restricted Common Stock shall lapse and a stock certificate for
the number of shares of Restricted Common Stock with respect to which the
restrictions have lapsed shall be delivered, free of all such restrictions,
except any that may be imposed by law, to the Participant or the
Participant's beneficiary or estate, as the case may be. The Company shall
not be required to deliver any fractional shares but will pay, in lieu
thereof, the fair market value (determined in accordance with Section 6(B)
as of the date the restrictions lapse) of such fractional shares to the
Participant.
(D) TERMINATION OF EMPLOYMENT/SERVICES
All of the Participant's rights to the shares of Restricted Common
Stock shall be forfeited, if the Participant (who is an employee or
non-employee advisor, consultant, or director) is terminated or terminates
his employment with or service for the Company or its affiliates for any
reason except for death or permanent and total disability prior to the
expiration of the restrictions on such shares, and such forfeited shares
shall be purchased by the Company at the Initial Price Per Share within a
reasonable time period established by the Board. Any attempt to dispose of
any such shares in contravention of the foregoing restrictions shall be
null and void and without effect.
If a Participant, who has been in the continuous employ or service of
the Company or its affiliates since the date on which the Restricted Common
Stock was granted, dies or becomes permanently and totally disabled while
in such employment or service and prior to
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the lapse of the restrictions on the Restricted Common Stock all such
restrictions shall lapse and cease to be effective as of the end of the
month in which the Participant's employment terminates due to death or
permanent and total disability.
(E) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT. Participants
who are subject to Section 16 of the Exchange Act are hereby advised that
reliance on Rule 16b-3 may require that any equity security of the Company
acquired upon exercise of Restricted Common Stock by such person be held at
least until the date six months after the date of grant of the Restricted
Common Stock.
8. OTHER PROVISIONS.
(A) ADJUSTMENT OF SHARES.
In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company
by reason of merger, consolidation, or reorganization in which the Company
is the surviving corporation or of a recapitalization, stock split,
combination of shares, reclassification, reincorporation, stock dividend,
or other change in the corporate structure of the Company, appropriate
adjustments shall be made by the Board in the aggregate number and kind of
shares subject to this Plan, and the number and kind of shares and the
price per share subject to outstanding Incentive Stock Options,
Nonstatutory Stock Options, and Restricted Common Stock in order to
preserve, but not to increase, the benefits to the Participant then holding
such Awards.
In the event that the Company at any time proposes to sell
substantially all of its assets, merge into, consolidate with or to enter
into any other reorganization in which the Company is not the surviving
corporation, or if the Company is the surviving corporation and the
ownership of the outstanding capital stock of the Company following the
transaction changes by 50% or more as a result of such transaction (a
"Sale"), the Plan and all unexercised Incentive Stock Options or
Nonstatutory Stock Options granted hereunder and all offers to purchase
Restricted Common Stock shall terminate, unless provision is made in
writing in connection with such transaction for (i) the continuance of the
Plan and for the assumption of Incentive Stock Options and Nonstatutory
Stock Options theretofore granted, and all outstanding offers to purchase
Restricted Common Stock, or the substitution for such Incentive Stock
Options, Nonstatutory Stock Options and offers to purchase Restricted
Common Stock of new Options covering, and new offers to purchase, shares of
a successor corporation, with appropriate adjustments as to number and kind
of shares and prices, in which event the Plan and the Incentive Stock
Options, Nonstatutory Stock Options and offers to purchase Restricted
Common Stock theretofore granted or the new Incentive Stock Options,
Nonstatutory Stock Options, and new offers to purchase Restricted Common
Stock substituted therefor, shall continue in the manner and under the
terms so provided or (ii) the substitution for the Plan and all outstanding
Incentive Stock Options and Nonstatutory Stock Options of a program or plan
to provide rights to the holders of such Options to receive on exercise of
such rights, the type and amount of consideration they would have received
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had they exercised all Options prior to such transaction and less the
aggregate exercise price of such Options (which rights shall vest and be
generally subject to the terms of such Options in the case of unvested
Options). If such provision is not made in such transaction, then the Board
shall cause written notice of the proposed transaction to be given to the
Participants holding Incentive Stock Options, Nonstatutory Stock Options or
rights of purchase not less than thirty (30) days prior to the anticipated
effective date of the proposed transaction, and all Incentive Stock
Options, Nonstatutory Stock Options, and rights of purchase shall be
accelerated and, concurrent with the effective date of the proposed
transaction, such Participants shall have the right to exercise Incentive
Stock Options, Nonstatutory Stock Options and accept rights of purchase in
respect to any or all shares then subject thereto. The Board shall have the
right, with respect to any specific Incentive Stock Option, Nonstatutory
Stock Option, or rights of purchase granted under the Plan, to provide that
all Incentive Stock Options, Nonstatutory Stock Options or rights of
purchase shall be accelerated in any event upon the effective date of the
proposed transaction.
(B) NON-TRANSFERABILITY. No Award granted to a Participant under the
Plan shall be transferable other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in the Code; provided that transfer pursuant to a qualified domestic
relations order shall not be permitted with respect to Incentive Stock
Options or in circumstances where such transfer would cause a lapse of
restriction for purposes of Section 83 of the Code. Any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of, or to
subject to execution, attachment, or similar process, any Award other than
as permitted in the preceding sentence shall give no right to the purported
transferee.
(C) COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES.
No Option shall be exercisable and no shares shall be delivered in
settlement of any Award and no unrestricted Common Stock shall be issued
for Restricted Common Stock under the Plan except in compliance with all
applicable Federal and state laws and regulations including, without
limitation, compliance with the rules of all domestic stock exchanges on
which the Company's shares may be listed. Any certificate issued to
evidence shares of Common Stock for which an Award is exercised or with
respect to which Restricted Common Stock restrictions lapse shall bear such
legends and statements as the Board deems advisable in order to assure
compliance with Federal and state laws and regulations. No Award shall be
exercisable and no Common Stock shall be delivered and no Restricted Common
Stock shall be issued under the Plan until the Company has obtained consent
or approval from such regulatory bodies, Federal or state, having
jurisdiction over such matters as the Board may deem advisable.
In the case of the exercise of an Award by a person or estate
acquiring the right to exercise such Award by bequest or inheritance or in
the case of a person or estate acquiring by bequest or inheritance the
right to receive Restricted Common Stock because of the lapse
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of the restrictions, the Board may require reasonable evidence as to the
ownership of the Award and may require such consents and releases of taxing
authorities as it may deem advisable.
(D) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor its
operation, nor any document describing or referring to the Plan, or any
part thereof, shall confer upon any Participant under the Plan any right to
continue in the employ of the Company or a subsidiary or shall in any way
affect the right and power of the Company or a subsidiary to terminate the
employment of any Participant under the Plan at any time with or without
assigning a reason therefor.
(E) TAX WITHHOLDING. The Board shall have the right to deduct from
any settlement of an Award, including without limitation the delivery or
vesting of Common Stock, made under the Plan any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such
payments or to take any such other action as may be necessary in the
opinion of the Board to satisfy all obligations for payment of such taxes.
If Common Stock that would otherwise be delivered in settlement of the
Award is used to satisfy tax withholding, such Common Stock shall be valued
based on their fair market value determined in accordance with Section 6(B)
when the tax withholding is required to be made.
(F) AMENDMENT AND TERMINATION.
The Board may at any time suspend, amend, or terminate the Plan, and,
without limiting the foregoing, the Board shall have the express authority
to amend the Plan from time to time, with or without approval by the
stockholders, in the manner and to the extent that the Board believes is
necessary or appropriate in order to cause the Plan to conform to
provisions of Rule 16b-3 under the Exchange Act and any other rules under
Section 16 of the Exchange Act, as any of such rules may be amended,
supplemented, or superseded from time to time. Except for adjustments made
in accordance with Section 8(A), the Board may not, without the consent of
the grantee of the Award, alter or impair any Award previously granted
under the Plan. No Award may be granted during any suspension of the Plan
or after termination thereof.
In addition to Board approval of an amendment, if the amendment would:
(i) materially increase the benefits accruing to Participants; (ii)
increase the number of shares of Common Stock deliverable under the Plan
(other than in accordance with the provisions of Section 8(A)); or (iii)
materially modify the requirements as to eligibility for participation in
the Plan, then such amendment shall be approved by the holders of a
majority of the Company's outstanding capital stock represented and
entitled to vote at a meeting held for the purpose of approving such
amendment to the extent required by Rule 16b-3 of the Exchange Act.
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(G) EFFECTIVE DATE OF THE PLAN. The Plan was adopted by the Board
and the stockholders holding a majority of the Company's outstanding shares
entitled to vote thereon on September 1, 2000.
(H) DURATION OF THE PLAN. Unless previously terminated by the Board,
the Plan shall terminate at the close of business on August 31, 2010, and
no Award shall be granted under it thereafter, but such termination shall
not affect any Award theretofore granted.
(I) USE OF CERTAIN TERMS. The term "affiliates" shall mean the
Company's parent and subsidiaries. The terms "parent" and "subsidiary"
shall have the meanings ascribed to them in Section 424 of the Code and
unless the context otherwise requires, the other terms defined in Section
421, 422, and 424, inclusive, of the Code and regulations and revenue
rulings applicable thereto, shall have the meanings attributed to them
therein. The term "permanent and total disability" shall have the meaning
ascribed to it in Section 22(e)(3) of the Code.
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