10.3
AMERICAN POWER PARTNERS, INC.
2000 EQUITY INCENTIVE PLAN
1. INTRODUCTION AND PURPOSE
(a) The purpose of this 2000 Equity Incentive Plan (the "2000 Plan" or
the "Plan") is to provide a means by which selected Employees of American
Power Partners, Inc. (the "Company") and its Affiliates, may be given an
opportunity to benefit from increases in value of the stock of the Company
through the granting of (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) Stock Bonuses, (iv) Restricted Stock, (v) Stock Appreciation
Rights, and (vi) other awards based upon the Company's Common Stock on such
terms and conditions as the Board may determine.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees, Directors and Consultants of the Company and
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants and to provide incentives for such persons to exert maximum
efforts for the success of the Company. Any person, Employee, Director or
Consultant who receives a Stock Award is a "Participant" herein.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
subsection 3(c) hereof, be either (i) Options granted pursuant to Section 6
hereof, including Incentive Stock Options and Nonstatutory Stock Options,
(ii) Stock Bonuses or rights to purchase restricted stock granted pursuant to
Section 7 hereof, (iii) Stock Appreciation Rights granted pursuant to Section
8 hereof or (iv) other stock based awards granted pursuant to Section 9
hereof. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and shall be in such form
as required pursuant to Section 6 hereof.
2. DEFINITIONS AND RULES OF INTERPRETATION
(a) DEFINITIONS.
For the purposes of the Plan, in addition to the definitions set
forth above, the following terms shall have the respective meanings set forth
below, unless something in the subject matter or context is inconsistent
therewith:
(i) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
(ii) "BOARD" means the Board of Directors of the Company.
(iii) "CODE" means the Internal Revenue Code of 1986, as amended.
(a) "COMMITTEE" means the Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.
(v) "COMPANY" means American Power Partners, Inc..
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(vi) "COMPANY COMMON STOCK" means shares of the common stock of the
Company.
(vii) "CONCURRENT STOCK APPRECIATION RIGHT" or "CONCURRENT RIGHT"
means a right granted pursuant to subsection 8(a) hereof.
(viii) "CONTINUOUS STATUS AS AN EMPLOYEE" means the employment or
relationship as an Employee, is not interrupted or terminated by the Company
or any Affiliate. The Committee, in its sole discretion, may determine
whether Continuous Status as an Employee, shall be considered interrupted in
the case of any leave of absence approved by the Committee, including sick
leave, military leave, or any other personal leave; provided, however, that
for purposes of Incentive Stock Options and Stock Appreciation Rights
appurtenant thereto, any such leave may not exceed ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
(ix) "DIRECTOR" means a member of the Board.
(x) "DISABILITY" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(xi) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service
solely as a Director nor payment of a Director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(xii) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(xiii)"FAIR MARKET VALUE" means value per share on the date of grant
as determined by the Board based upon any reasonable valuation method, or if
publicly-traded, as reported either (a) by a nationally recognized stock
exchange, (b) by the National Association of Securities Dealers Automated
Quotation System, Inc. ("NASDAQ").
(xiv) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(xv) "INDEPENDENT STOCK APPRECIATION RIGHT" or "INDEPENDENT RIGHT"
means a right granted under subsection 8(a) hereof.
(i) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or
subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a Consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K (or any successor regulation of
similar import) promulgated pursuant to the Securities Act ("Regulation S-
K")), does not possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation S-K (or any
successor regulation of similar import); or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3 of the Exchange Act.
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(xvii) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(xviii) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(xix) "OPTION" means a stock option granted pursuant to the Plan.
(xx) "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms and
conditions of the Plan.
(xxi) "OPTIONEE" means any person who holds an outstanding Option.
(xxii) "OUTSIDE DIRECTOR" means for any given date of grant a
Director who either (i) is not then a current employee of the Company or an
"affiliated corporation" (within the meaning of Treasury regulations
promulgated under Section 162(m) of the Code), is not a former employee of
the Company or an "affiliated corporation" receiving compensation for prior
services (other than benefits under a tax qualified pension plan) during the
then current taxable year, was not an officer of the Company or an
"affiliated corporation" at any time, and is not then currently receiving
direct or indirect remuneration from the Company or an "affiliated
corporation" for services in any capacity other than as a Director, and (ii)
is otherwise considered an "outside director" for purposed of Section 162(m)
of the Code.
(xxiii) "PLAN" or "2000 PLAN" means this 2000 Equity Incentive
Plan, as the same may be amended from time to time.
(xxiv) "RESTRICTED STOCK" means an award of common stock that is
subject to such restrictions on transferability and other restrictions, if
any, as the compensation committee may impose at the date of grant or
thereafter, which restrictions may lapse separately or in combination at such
times, under such circumstances, including, without limitation a specific
period of employment or the satisfaction of pre-established performance
goals, in such installments, or otherwise, as the compensation committee may
determine.
(xxv) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3.
(xxvi) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(xxvii) "STOCK APPRECIATION RIGHT" means any of the various types
of rights which may be granted under Section 8 hereof.
(xxviii) "STOCK AWARD" means any right granted under the Plan,
including any Option, any stock bonus, any right to purchase restricted
stock, and any Stock Appreciation Right.
(xxix) "STOCK AWARD AGREEMENT" means a written agreement between
the Company and a holder of a Stock Award evidencing the terms and conditions
of an individual Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
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(xxx) "STOCK BONUS" means any stock bonus of the type which may be
granted under Section 7 hereof.
(i) "SUBSIDIARY" shall mean any corporation, if the corporation
and/or one or more Subsidiaries owns at least fifty percent
(50%) of the total combined voting power of all classes of
outstanding stock in such corporation.
(ii) "TANDEM STOCK APPRECIATION RIGHT" or "TANDEM RIGHT" means a
right granted under subsection 8(a) hereof.
The foregoing terms are not the exclusive definitions as used in
the Plan and reference is made to other capitalized terms defined in the
context of their first use herein.
(b) Rules of Interpretation.
(i) The headings and subheadings used herein or in any Option or
other instrument evidencing a Stock Award are solely for convenience of
reference and shall not constitute a part of the Plan or such document or
affect the meaning, construction or effect of any provision thereof.
(ii) All definitions set forth herein shall apply to the singular
as well as the plural form of such defined term, and all references to the
masculine gender shall include reference to the feminine or neuter gender and
visa versa, as the context may require.
(iii) Reference to "including" means including without limiting the
generality of any description preceding such term.
(iv) Unless otherwise expressly stipulated, any reference in the
Plan to any statute, act, regulation or specific provision thereof shall also
extend to any amendment, restatement or other modification to such statute,
act, regulation or specific provision thereof or any successor statute, act,
regulation or provision of similar import.
(v) Unless otherwise expressly provided, any reference in the Plan
to any specific provision of any statute or act shall include any regulations
promulgated thereunder from time to time and interpretations thereof as may
be applicable to the Plan.
3. ADMINISTRATION
(a) The Plan shall be administered by the Committee.
(b) The Committee shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how Stock Awards shall
be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a Stock Bonus, a right to purchase Restricted
Stock , a Stock Appreciation Right, another stock-based award or a
combination of the foregoing; the provisions of each Stock Award granted
(which need not be identical), including the time or times when a person
shall be permitted to receive stock pursuant to a Stock Award; whether a
person shall be permitted to receive stock upon exercise of an Independent
Stock Appreciation Right; and the number of shares with respect to which
Stock Awards shall be granted to each such person.
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(ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Committee, in the exercise of this power, may correct
any defect, omission or inconsistency in any Stock Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the
Stock Award Agreement fully effective.
(iii) To provide for such special terms as it may consider
necessary or appropriate to assure the viability of awards granted to
Employees, Directors and Consultants performing services outside the United
States by accommodating differences in local law, tax policy or custom and to
approve such supplements to, or amendments, restatements or alternative
versions of the Plan as it may consider necessary or appropriate for such
purposes without thereby affecting the terms of the Plan as in effect for any
other purposes; provided that, no such supplements, amendments, restatements
or alternative versions shall increase the share limitations contained in
Section 4 hereof.
(iv) Generally, to exercise such powers and to perform such acts as
the Committee deems necessary or expedient to promote the best interests of
the Company and which are not in conflict with the provisions of the Plan.
(c) Administration of the Plan shall be delegated to a committee
composed of not fewer than two (2) members (the "Committee"), all of the
members of which Committee shall be Non-Employee Directors and Outside
Directors. The Committee shall have, in connection with the administration
of the Plan, the powers set forth in the Plan; subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee
at any time and revest in the Board the administration of the Plan.
Notwithstanding anything in this Section 3 to the contrary, at any time the
Board or the Committee may delegate to a committee of one or more officers of
the Company the authority to grant Stock Awards to eligible persons who are
not then subject to Section 16 of the Exchange Act and to eligible persons
with respect to whom the Company does not wish to comply with Section 162(m)
of the Code.
The Board shall have the authority to correct any defect, omission or
inconsistency in the Plan and to amend the Plan as provided in Section 19. The
Board shall have the authority to appoint the Committee and to fill any vacancy
created by reason of the death, resignation or removal of any member thereof by
appointing an eligible successor.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 15 hereof relating to
adjustments upon changes in stock, the number of shares of Company Common
Stock that may be issued pursuant to Stock Awards under the Plan shall be
equal to 3,500,000 of such Stock. If any Stock Award shall for any reason
expire or otherwise terminate without having been exercised in full, the
Company Common Stock not purchased shall again become available for issuance
under the Plan. Notwithstanding the foregoing, shares of Company Common
Stock subject to Stock Appreciation Rights exercised in accordance with
Section 8 hereof shall not be available for subsequent issuance under the
Plan.
(B) THE COMPANY COMMON STOCK SUBJECT TO THE PLAN MAY CONSIST IN
WHOLE
OR IN PART OF AUTHORIZED BUT UNISSUED SHARES OR TREASURY SHARES.
SUBJECT TO
SUBSECTION 4(A), NOT MORE THAN 800,000 shares of Company Common Stock in the
aggregate may be subject to Stock Bonuses and restricted stock awards
(provided for in Section 7), Stock Appreciation Rights (provided for in
Section 8), and other awards (provided for in Section 9).
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5. ELIGIBILITY
(a) No person shall be eligible for the grant of an Incentive
Stock Option if, at the time of grant, such person owns (or is deemed to
own pursuant to Section 424(d) of the Code) Company Common Stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of capital stock of the Company or of any of its
Affiliates unless the exercise price of such Incentive Stock Option is
at least one hundred ten percent (110%) of the Fair Market Value of such
Company Common Stock at the date of grant and the Incentive Stock Option
is not exercisable after the expiration of five (5) years from the date
of grant.
(b) No person shall be eligible to be granted Stock Awards covering
more than 550,000 shares of Company Common Stock in any calendar year.
6. OPTION PROVISIONS
Each Option Agreement shall be in such form and shall contain such terms
and conditions as the Committee shall deem appropriate. The provisions of
separate Options need not be identical, but each Option Agreement shall
include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions except
as otherwise specifically provided elsewhere in the Plan.
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) PRICE. Subject to subsection 5(b) hereof, the exercise price of
each Incentive Stock Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Company Common Stock subject to the Option on
the date the Option is granted. The exercise price of each Nonstatutory
Stock Option shall be set by the Committee at the time each Option is
granted, but in no event shall (i) any exercise price be less than the par
value of the Company Common Stock and (ii) not more than 1,000,000 of Company
Common Stock shall be subject to a Nonstatutory Stock Option at an exercise
price less than one hundred percent (100%) of such Fair Market Value.
(c) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid in cash or by certified check (acceptable to the Company in accordance
with guidelines established for this purpose), bank draft or money order
payable to the order of the Company, by delivery of a full recourse
promissory note of the Optionee to the Company on terms determined by the
Committee, or by such other method as shall be determined by the Committee.
In the case of payment made by a promissory note, interest shall be payable
at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment of interest, under any applicable provisions
of the Code, of any amounts other than amounts stated to be interest.
(d) TRANSFERABILITY. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person. A Nonstatutory Stock Option may
be transferred upon such terms and conditions as are set forth in the Option
Agreement, as the Committee shall determine in its sole discretion, including
(without limitation) pursuant to a "domestic relations order" within the
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meaning of such rules, regulations or interpretation of the Securities and
Exchange Commission as are applicable for purposes of Section 16 of the
Exchange Act, or to family members, or to trusts or other entities maintained
for the benefit of family members. Notwithstanding the foregoing, the person
to whom an Option is granted may, by delivering written notice to the Company
in a form satisfactory to the Company, designate a third party who, in the
event of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) VESTING. The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not,
be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not
fully exercised. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (e.g., Change in
Control, performance or other criteria) as the Committee may deem
appropriate. During the remainder of the term of the Option (if its term
extends beyond the end of the installment periods), the Option may be
exercised from time to time with respect to any shares then remaining subject
to the Option. The provisions of this subsection 6(e) are subject to any
Option provisions governing the minimum number of shares as to which an
Option may be exercised.
(f) TERMINATION OF EMPLOYMENT. In the event an Optionee's Continuous
Status as an Employee terminates (other than upon the Optionee's death,
Disability or retirement), the Optionee may exercise his or her Option, but
only within such period of time ending on the earlier of (i) 90 days after
termination of the Optionee's Continuous Status as an Employee or such longer
or shorter period of time specified in the Option Agreement, or (ii) the
expiration of the Option's term, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement).
In the event of the retirement of an Optionee from the Company
pursuant to the Company's retirement policy then in effect, or if there be
none, then as determined by the Committee in its sole discretion, he or she
may exercise his or her Option during the period ending twelve (12) months
after his or her retirement date (or 90 days in the case of an Incentive
Stock Option). If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified in the Option Agreement, the Option
shall terminate, and the shares covered by such Option shall revert to and
again become available for issuance under the Plan.
An Optionee's Option Agreement may also provide that if the
exercise of the Option following the termination of the Optionee's Continuous
Status as an Employee, (other than upon the Optionee's death or disability)
would be prohibited at any time solely because the issuance of shares would
violate the registration requirements under the Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the first paragraph of this subsection 6(f), or (ii) the expiration
of a period of three (3) months after the termination of the Optionee's
Continuous Status as an Employee, during which the exercise of the Option
would not be in violation of such registration requirements.
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Notwithstanding the preceding, in the event an Optionee's
employment with (or services to) the Company is terminated by it for cause
(as determined by the Company), the Option shall terminate on the date of
termination and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
As used herein, "cause" shall mean (a) any breach under that person's written
employment agreement, if any, with the Company, or if the Optionee is not a
party to a written employment with the Company, "cause" shall mean (x) any
material breach by the Optionee of any agreement to which the Optionee and
the Company are both parties, (y) any act or omission to act by the Optionee
which may have a material and adverse effect on the Company's business or on
the Optionee's ability to perform services for the Company, including,
without limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by
the Optionee in connection with the business or affairs of the Company or any
affiliate of the Company.
(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Employee terminates as a result of the Optionee's Disability,
the Optionee may exercise his or her Option, but only within such period of
time ending on the earlier of (i) the date twelve (12) months following such
termination (or such longer or shorter period of time as specified in the
Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee
does not exercise his or her Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.
(h) DEATH OF OPTIONEE. In the event of a death of an Optionee during,
or within a period specified in the Option Agreement after the termination
of, the Optionee's Continuous Status as an Employee, the Option may be
exercised by the Optionee's estate, by a person who acquired the right to
exercise the Option by bequest or inheritance, or by a person designated to
exercise the option upon the Optionee's death pursuant to subsection 6(d)
hereof, but only within the period ending on the earlier of: (i) the date
twelve (12) months following the date of death (or such longer or shorter
period specified in the Option Agreement), or (ii) the expiration of the term
of such Option as set forth in the Option Agreement. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option,
the shares covered by the unexercisable portion of the Option shall revert to
and again become available under the Plan. If, after death, the Option is
not exercised within the time specified herein, the Option shall terminate,
and the shares covered by such Option shall revert to and again become
available for issuance under the Plan.
(i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, to exercise the
Option as to any part or all of the shares subject to the Option prior to the
full vesting of the Option; provided, however, any unvested shares shall be
subject to a repurchase right in the Company at the Exercise Price in the
event of the Optionee's termination.
(j) TAX WITHHOLDING. The Company shall have the right to deduct
from any settlement of an award made under the Plan, including the delivery
or vesting of Shares of Company Common Stock up to the minimum amount
necessary to cover withholding of any federal, state or local taxes required
by law, or to take such other action as may be necessary to satisfy any such
withholding obligations. The Committee may, in its discretion and subject to
such rules as it may adopt, permit participants to use shares of Company
Common Stock to satisfy the minimum required tax withholding (with prior
approval of the Committee if Shares are owned less than six months) and such
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Shares shall be valued at the Fair Market Value as of the settlement date of
the applicable award.
(k) RIGHT OF FIRST REFUSAL. Notwithstanding any other provision in
the Plan to the contrary, if the Participant desires to transfer shares of
Common Stock of the Company when such shares are not readily tradable on an
established securities market (e.g., the New York Stock Exchange or NASDAQ),
the Company shall have the right to purchase all, and not less than all, of
the shares of Company Common Stock on the terms set forth in the applicable
Stock Agreement between the Company and the Participant.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK
Each Stock Bonus or Restricted Stock award agreement shall be in such
form and shall contain such terms and conditions as the Committee shall deem
appropriate. The terms and conditions of Stock Bonus or Restricted Stock
award agreements may change from time to time, and the terms and conditions
of separate agreements need not be identical, but each Stock Bonus or
Restricted Stock award agreement shall include (through incorporation of
provisions herein by reference in the agreement or otherwise) the substance
of each of the following provisions as appropriate:
(a) PURCHASE PRICE. The purchase price under each Restricted Stock
award agreement shall be such amount as the Committee shall determine and
designate in such agreement. Notwithstanding the foregoing, the Committee
may determine that eligible participants in the Plan may be granted a Stock
Award pursuant to a Stock Bonus agreement in consideration for past services
actually rendered to the Company for its benefit.
(b) TRANSFERABILITY. Except as otherwise provided elsewhere in the
Plan, no rights under a Stock Bonus or Restricted Stock award agreement shall
be assignable by any participant under the Plan, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution,
and shall be exercisable during the lifetime of the person to whom the rights
are granted only by such person. The person to whom the Stock Award is
granted, may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of such person, shall thereafter be entitled to exercise the rights
held by such person under the Stock Bonus or Restricted Stock award
agreement.
(c) PAYMENT FOR STOCK. The purchase price determined under subsection
7(a) hereof must be paid for in cash or by certified check (acceptable to the
Company in accordance with guidelines established for this purpose), bank
draft or money order payable to the order of the Company, or by delivery of a
full recourse promissory note of the Optionee to the Company on terms
determined by the Committee.
In the case of payment made by a promissory note, interest shall be payable
at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment of interest, under any applicable provisions
of the Code, of any amounts other than amounts stated to be interest.
(d) VESTING. Shares of Company Common Stock sold or awarded under the
Plan may, but need not, be subject to a repurchase option in favor of the
Company in accordance with a vesting schedule to be determined by the
Committee.
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(e) TERMINATION OF EMPLOYMENT. In the event a Participant's Continuous
Status as an Employee terminates, the Company may repurchase or otherwise
reacquire any or all of the shares of Company Common Stock held by that
person which have not vested as of the date of termination under the terms of
the Stock Bonus or Restricted Stock purchase agreement between the Company
and such person.
8. STOCK APPRECIATION RIGHTS
(a) The Committee shall have full power and authority, exercisable in
its sole discretion, to grant Stock Appreciation Rights to Employees,
Directors and Consultants of the Company or its Affiliates under the Plan
under such terms and conditions as it shall determine. Each such right shall
entitle the holder to a distribution based on the appreciation in the Fair
Market Value per share of a designated amount of Company Common Stock.
(b) The three types of Stock Appreciation Rights authorized for
issuance under the Plan are: Tandem Stock Appreciation Rights, Concurrent
Stock Appreciation Rights and Independent Stock Appreciation Rights.
9. OTHER STOCK-BASED AWARDS
The Committee shall have the right to grant other Awards based upon
Company Common Stock having such terms and conditions as the Committee may
determine, including the grant of shares based upon certain conditions and
the grant of securities convertible into Company Common Stock.
10. TAX WITHHOLDING
The Company shall have the right to deduct from any settlement of an
award made under the Plan, including the delivery or vesting of shares of
Company Common Stock up to the minimum amount necessary to cover withholding
of any federal, state or local taxes required by law, or to take such other
action as may be necessary to satisfy any such withholding obligations. The
Committee may, in its discretion and subject to such rules as it may adopt,
permit participants to use shares of Company Common Stock to satisfy the
minimum required tax withholding (with prior approval of the Committee if
Shares are owned less than six months) and such Shares shall be valued at the
Fair Market Value as of the settlement date of the applicable award.
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11. CANCELLATION AND RE-GRANT OF OPTIONS
(a) Subject to prior approval by the Company's stockholders, the
Board or the Committee shall have the authority to effect, at any time and
from time to time , with the consent of the affected holders of Options
and/or Stock Appreciation Rights, (i) the repricing of any outstanding
Options and/or Stock Appreciation Rights under the Plan and the grant in
substitution therefor of new Options and/or Stock Appreciation Rights under
the Plan covering the same or different numbers of shares of Company Common
Stock, but having an exercise price per share not less than eighty five
percent (85%) of the Fair Market Value (one hundred percent (100%) of the
Fair Market Value in the case of an Incentive Stock Option) or, in the case
of an Incentive Stock Option granted to a 10% stockholder (as described in
subsection 5(b) hereof, not less than one hundred ten percent (110%) of the
Fair Market Value) per share of Company Common Stock on the new grant date.
Notwithstanding the foregoing, the Committee may grant an Option and/or
Stock Appreciation Right with an exercise price lower than that set forth
above if such Option and/or Stock Appreciation Right is granted as part of
a transaction to which Section 424(a) of the Code applies.
(b) Shares of Company Common Stock subject to an Option or Stock
Appreciation Right canceled under this Section 11 shall continue to be
counted against the maximum award of Options and Stock Appreciation Rights
permitted to be granted to a person pursuant to subsection 5(c) hereof.
The repricing of an Option and/or Stock Appreciation Right under this
Section 11, resulting in a reduction of the exercise price, shall be deemed
to be a cancellation of the original Option and/or Stock Appreciation Right
and the grant of a substitute Option and/or Stock Appreciation Right; in
the event of such repricing, both the original and the substituted Options
and Stock Appreciation rights shall be counted against the maximum awards
of Options and Stock Appreciation Rights permitted to be granted to a
person pursuant to subsection 5(c) hereof. The provisions of this
subsection 11(b) shall be applicable only to the extent required by Section
162(m) of the Code.
12. COVENANTS OF THE COMPANY
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Company Common Stock
required to satisfy such Stock Awards, but in any event, not more than the
number of shares of Company Common Stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of Company Common Stock under the Stock
Awards; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any Stock
Award or any stock issued or issuable pursuant to any such Stock Award.
If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Company Common Stock
under the Plan, the Company shall be relieved from any liability for
failure to issue and sell Company Common Stock under such Stock Awards
unless and until such authority is obtained.
13. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of Company Common Stock pursuant to Stock
Awards shall constitute general funds of the Company.
<PAGE>
14. MISCELLANEOUS
(a) The Committee shall have the power to accelerate the time at
which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which it will vest.
(b) Neither an Optionee nor any person to whom an Option is
transferred under subsection 6(d) hereof shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Company Common Stock subject to such Option unless and until such person
has satisfied all requirements for exercise of the Option pursuant to its
terms.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director,
Consultant, Optionee, or other holder of Stock Awards any right to continue
in the employ of the Company or any Affiliate (or to continue acting as
Director or Consultant) or shall affect the right of the Company or any
Affiliate to terminate the employment or relationship as a Director or
Consultant of any Employee, Director, Consultant or Optionee, with or
without cause.
(d) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of Company Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any Optionee during any
calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall
be treated as Nonstatutory Stock Options.
(e) The Committee shall be authorized to establish procedures
pursuant to which Participants may elect to defer the gain realized upon
exercise of a stock option, or such gain derived from other Stock Awards
granted under the Plan.
(f) The Company will not be obligated to deliver any shares of
Company Common Stock pursuant to the Plan or to remove
restrictions from such shares previously delivered under the
Plan (a) until all conditions of the Option or award have
been satisfied or removed, (b) until, in the opinion of the
Company's counsel, all applicable Federal and state laws and
regulations have been complied with, (c) if the outstanding
Company Common Stock is at the time on any stock exchange or
The Nasdaq National Market, until the shares to be delivered
have been listed or authorized to be listed on such exchange
or market upon official notice of notice of issuance, and
(d) until all other legal matters in connection with the
issuance and delivery of stock has been approved by the
Company's counsel.
If the sale of Shares of Company Common Stock has not been registered
under the Securities Act of 1933, as amended, the Company may require, as a
condition to exercise of the award, such representations or agreements as
counsel for the Company may consider appropriate to avoid violation of such
Act; including the representation or warranty of the person exercising the
option that the Shares of Company Common Stock are being purchased only for
investment and without any present intention to sell or distribute such
shares and the certificates evidencing such Stock shall bear the legend
restricting transfer as set forth in Section 17.
<PAGE>
(g) If an Option is exercised by the Participant's legal
representative or transferee, the Company will be under no obligation to
deliver Company Common Stock pursuant to such exercise until the Company is
satisfied as to the authority of such representative.
15. EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN
In the event there is any change in the shares of Common Stock of the
Company through the declaration of stock dividends or through
recapitalizations resulting in stock subdivisions or combinations or
exchanges of shares or otherwise, the number of shares available for
Option, the exercise price of outstanding Options, and the number of shares
subject to any Option shall be appropriately adjusted by the Board.
16. CHANGE IN CONTROL
Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change of Control as determined solely by the Board:
(a) Stock Awards outstanding as of the date such Change of Control is
determined to have occurred shall become exercisable to the extent provided
for in each Optionee's Award agreement.
(b) In connection with or following a Change of Control, neither the
Committee nor the Board may impose additional conditions upon exercise or
otherwise amend or restrict an Option, SAR, share of Restricted Stock,
Deferred Stock Award or Performance Award, or amend the terms of the Plan
in any manner adverse to the holder thereof, without the written consent of
such holder.
Notwithstanding the foregoing, if any right granted pursuant to
this Section 16 would make a Change of Control transaction ineligible for
pooling of interests accounting under applicable accounting principles that
but for this Section 16 would otherwise be eligible for such accounting
treatment, the Committee shall have the authority to substitute Stock for
the cash which would otherwise be payable pursuant to this Section 16
having a fair market value equal to such cash.
17. RESTRICTIONS ON COMPANY COMMON STOCK
All stock certificates representing shares of Company
Common Stock sold or awarded pursuant to the Plan shall contain a legend
substantially in the following form:
"The shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, or any state
securities or Blue Sky laws, and may not be transferred, sold, or otherwise
disposed of, except pursuant to an effective registration statement or
pursuant to an exemption from registration under the Securities Act of
1933, as amended, and applicable state securities or Blue Sky laws.
In the event that the shares of Common Stock issued pursuant to the
terms of the Plan are: (i) registered under the Securities Act, pursuant
to an effective registration statement that complies with the then
<PAGE>
applicable regulations, rules, and procedures and practices of the
Securities and Exchange Commission, and are registered in accordance with
any applicable state laws, regulations, rules, and administrative
procedures practices, or (ii) transferred pursuant to another exemption
from registration under the Securities Act and, at the request of the
Company has received a legal opinion, satisfactory to its counsel, as to
the availability of and compliance with such exemption and that the Company
Common Stock need not bear the restrictive legend stating that such Stock
has not been registered under the Securities Act, the Company may issue a
new certificate such Stock bearing the restrictive legend.
18. GRANT OF OPTIONS IN CONNECTION WITH CERTAIN ACQUISITIONS
The Board may grant Options under the Plan in substitution for
Incentive Stock Options or non-statutory stock options granted under plans
of other employers, if such grant occurs by reason of a corporate merger,
consolidation, separation, reorganization, or liquidation to which the
Company is a party, or by reason of the acquisition of property or stock of
another corporation by the Company; provided that, with respect to any
Incentive Stock Option, such transaction is a transaction to which Section
424(a) of the Code applies. The Board may impose such terms and conditions
upon the grant of any Incentive Stock Options under this Section 18 as are
necessary to ensure that the substitution will not constitute a
modification of the Option under Section 424(h) of the Code, even though
any such term or condition would otherwise be inconsistent with the
provisions of this Plan. Options granted under the provisions of this
Section 18 may be granted at a price less than the Fair Market Value of the
Common Stock on the date such Option is granted, so long as the ratio of
the Option price to the Fair Market Value of the Common Stock is no more
favorable to the Optionee than the ratio of the Option price to the Fair
Market Value of the stock subject to the old option immediately before such
substitution. Except as otherwise specifically provided in the agreement
setting forth the terms and conditions of such Option, the provisions of
this Plan shall govern any Options granted under this Section 18. Nothing
in this Section 18 shall be deemed to authorize the grant of Options under
the Plan for a number of shares in excess of the number set forth in
Section 4, nor to limit in any way the authority of the Board to grant
substituted Options in connection with such transactions other than under
the Plan.
19. AMENDMENT OF THE PLAN AND STOCK AWARDS
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 15 hereof relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by
the stockholders of the Company to the extent stockholder approval is
necessary as determined solely by counsel for the Company.
(b) The Board may in its sole discretion submit any other amendments
to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations promulgated thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide Optionees
with the maximum benefits provided or to be provided under the provision of
the Code and the regulations promulgated thereunder relating to Incentive
Stock Options and/or to bring the Plan and/or Incentive Stock Options
granted under it into compliance therewith.
<PAGE>
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of
the Plan unless (i) the Company requests the consent of the persons to whom
the Stock Award was granted and (ii) such person consents in writing.
(e) The Committee at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights
and obligations under any Stock Award shall not be altered or impaired by
any such amendment unless (i) the Company requests the consent of the
person to whom the Stock Award was granted and (ii) such person consents in
writing.
20. TERMINATION OR SUSPENSION OF THE PLAN
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on November 13, 2010. No Stock
Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.
(b) Rights and obligations under any Stock Award granted while the
Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with consent of the person to whom the Stock Award was
granted.
21. GOVERNING LAW
The provisions of the Plan and all Stock Awards made hereunder
shall be governed by and interpreted in accordance with the internal
laws of the State of Colorado or which state shall be applicable as
deemed by the Board, without regard to any applicable conflicts of law
principles.
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Adopted by the Board of Directors on
NOVEMBER 13, 2000
Approved by the Company's Stockholders on
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