FULLCOMM TECHNOLOGIES, INC.
(formerly Contessa Corporation)
2000 STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to attract
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and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Non-Employee
members of the Board and Consultants (sometimes referred to herein as
"Participants") of the Company and its Subsidiaries and to promote the success
of the Company's business.
2. CERTAIN DEFINITIONS. As used herein, the following definitions shall
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apply:
(a) "Award" or "Awards," except where referring to a particular
category of grant under the Plan, shall include Incentive Stock Options,
Nonstatutory Stock Options, Restricted Stock Awards and Stock Awards.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended,
including any successor law thereto.
(d) "Committee" means any Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock, $.01 par value, of the
Company.
(f) "Company" means Fullcomm Technologies, Inc., a Delaware
corporation.
(g) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any Non-Employee Director of the Company
whether compensated for such services or not.
(h) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Board, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers between
locations of the Company or between the Company, its Subsidiaries or its
successor.
(i) "Employee" means any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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(k) "Fair Market Value" means: (i) if the Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), the Fair Market Value on any given date shall be the average
of the highest bid and lowest asked prices of the Common Stock reported for such
date or, if no bid and asked prices were reported for such date, for the last
day preceding such date for which such prices were reported; or (ii) if the
Common Stock is admitted to trading on a United States securities exchange or
the NASDAQ National Market System, the Fair Market Value on any date shall be
the closing price reported for the Common Stock on such exchange or system for
such date or, if no sales were reported for such date, for the last day
preceding such date for which a sale was reported; (iii) notwithstanding the
foregoing, the Fair Market Value of the Common Stock on the effective date of
the Company's Initial Public Offering shall be the offering price to the public
of the Common Stock on such date; and (iv) in the absence of an established
market for the Common Stock, the Fair Market Value thereof shall be determined
in good faith by the Plan Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
(m) "Initial Public Offering" means the first underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of the Common Stock to the
public.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option.
(q) "Optionee" means an Employee, Consultant or Non-Employee Director
who receives an Option.
(r) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 2000 Stock Plan.
(t) "Plan Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(u) "Restricted Stock" means shares of Common Stock acquired pursuant
to a Restricted Stock Award under Section 12 below.
(v) "Restricted Stock Award" means any Award granted pursuant to
Section 12 of the Plan.
(w) "Share" means a share of the Common Stock, as may be adjusted from
time to time in accordance with Section 15 of the Plan.
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(x) "Stock Award" means any award granted pursuant to Section 13 of
the Plan.
(y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(z) "Termination for Cause" shall include, but not be limited to, a
finding by the Board of the Participant's: (i) performance of duties in an
incompetent manner; (ii) commission of any act of fraud, insubordination,
misappropriation or personal dishonesty relating to or involving the Company in
any material way; (iii) gross negligence; (iv) violation of any express
direction of the Company or any material violation of any rule, regulation,
policy or plan established by the Company from time to time regarding the
conduct of its employees or its business, if such violation is not remedied by
the Participant within thirty (30) days of receiving notice of such violation
from the Company; (v) violation of any obligation of Participant's consulting
relationship or Continuous Status as an Employee with the Company that is
demonstrably willful and deliberate on the Participant's part and is not
remedied by the Participant within thirty (30) days after receiving notice of
such violation from the Company; (vi) disclosure or use of confidential
information of the Company, other than as required in the performance of the
Participant's duties; (vii) actions that are clearly contrary to the best
interest of the Company; (viii) conviction of a crime constituting a felony or
any other crime involving moral turpitude, or no conviction, but the substantial
weight of credible evidence indicates that the Participant has committed such a
crime; or (ix) the Participant's use of alcohol or any unlawful controlled
substance to an extent that it interferes with the performance of the
Participant's duties.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 15
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of the Plan, the initial maximum number of shares of Common Stock that may be
issued under the Plan shall be one million (1,000,000) shares; provided,
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however, that the maximum number of shares available under the Plan shall
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automatically be increased to an amount equal to twenty percent (20%) of the
shares of Common Stock outstanding on any December 31, beginning on December 31,
2000; and provided, further, that the foregoing formula shall never result in a
decrease in the maximum number of shares of Common Stock available for issuance
under the Plan. For purposes of the foregoing limitation, the shares of Common
Stock underlying any Awards which are forfeited, canceled, reacquired by the
Company, satisfied without the issuance of Common Stock or otherwise terminated
(other than by exercise) shall be added back to the number of shares of Common
Stock available for issuance under the Plan. Notwithstanding the foregoing: (i)
no more than one million (1,000,000) shares shall be available for the award of
Incentive Stock Options; and (ii) on and after the date that the Plan is subject
to Section 162(m) of the Code, Options with respect to no more than two hundred
fifty thousand (250,000) shares of Common Stock may be granted to any one
individual Participant during any one (1) calendar year period. Common Stock to
be issued under the Plan may be either authorized and unissued shares or shares
held in treasury by the Company.
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4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by:
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(i) the full Board; or (ii) a committee of the Board comprised of two or more
"Non-Employee Directors" within the meaning of Rule 16b-3(b)(3) promulgated
under the Exchange Act. Subject to the provisions of the Plan, the Plan
Administrator is authorized to:
(a) construe the Plan and any Award under the Plan;
(b) select the Directors, officers, Employees and Consultants of
the Company and its Subsidiaries to whom Awards may be granted;
(c) determine the number of shares of Common Stock to be covered by
any Award;
(d) determine and modify from time to time the terms and
conditions, including restrictions, of any Award and to approve
the form of written instrument evidencing Awards;
(e) accelerate at any time the exercisability or vesting of all or
any portion of any Award and/or to include provisions in awards
providing for such acceleration;
(f) impose limitations on Awards, including limitations on transfer
and repurchase provisions;
(g) extend the exercise period within which Options may be exercised;
and
(h) determine at any time whether, to what extent, and under what
circumstances Common Stock and other amounts payable with respect
to an Award shall be deferred either automatically or at the
election of the Participant and whether and to what extent the
Company shall pay or credit amounts constituting interest (at
rates determined by the Plan Administrator) or dividends or
deemed dividends on such deferrals.
The determination of the Plan Administrator on any such matters shall be
conclusive.
5. DELEGATION OF AUTHORITY TO GRANT AWARDS. The Plan Administrator, in its
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discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Plan Administrator's authority and duties with respect to granting
Awards to individuals who are not subject to the reporting provisions of Section
16 of the Act or "covered employees" within the meaning of Section 162(m) of the
Code. The Plan Administrator may revoke or amend the terms of such a delegation
at any time, but such revocation shall not invalidate prior actions of the Chief
Executive Officer that were consistent with the terms of the Plan.
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6. ELIGIBILITY.
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(a) Directors, officers, Employees and Consultants of the Company or
its Subsidiaries who, in the opinion of the Plan Administrator, are mainly
responsible for the continued growth and development and future financial
success of the business shall be eligible to participate in the Plan.
(b) The Plan shall not confer upon any Participant any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
7. STOCK OPTIONS.
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(a) Options granted pursuant to the Plan may be either Options which
are Incentive Stock Options or Nonstatutory Stock Options. Incentive Stock
Options and Nonstatutory Stock Options shall be granted separately hereunder.
The Plan Administrator, shall determine whether and to what extent Options shall
be granted under the Plan and whether such Options granted shall be Incentive
Stock Options or Nonstatutory Stock Options; provided, however, that: (i)
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Incentive Stock Options may be granted only to Employees of the Company or any
Subsidiary; and (ii) no Incentive Stock Option may be granted following the
tenth (10th) anniversary of the effective date of the Plan. The provisions of
the Plan and any Option Agreement pursuant to which Incentive Stock Options
shall be issued shall be construed in a manner consistent with Section 422 of
the Code (or any successor provision) and rules and regulations promulgated
thereunder.
(b) To the extent that Options designated as Incentive Stock Options
(under all plans of the Company or any Parent or Subsidiary) become exercisable
by a Participant for the first time during any calendar year for Common Stock
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the portion of such Options which exceeds such amount shall be treated as
Nonstatutory Stock Options. For purposes of this Section 7, Options designated
as Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of Common Stock shall be determined
as of the time the Option with respect to such Common Stock is granted. If the
Code is amended to provide for a different limitation from that set forth in
this Section 7, such different limitation shall be deemed incorporated herein
effective as of the amendment date and with respect to such Options as required
or permitted by such amendment to the Code. If an Option is treated as an
Incentive Stock Option in part and as a Nonstatutory Stock Option in part by
reason of the limitation set forth in this Section 7, the Participant may
designate which portion of such Option the participant is exercising. In the
absence of such designation, the Participant shall be deemed to have exercised
the Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.
8. TERM OF PLAN. The Plan shall become effective on June 20, 2000,
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provided the Plan has been previously adopted by the Board and approved by the
shareholders of the Company as described in Section 22 of the Plan. The Plan
shall remain in effect until terminated under Section 18 of the Plan.
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9. TERM OF OPTIONS. The term of each Option shall be the term stated in
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the Option Agreement; provided, however, that in the case of an Incentive Stock
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Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement. In the
case of an Option granted to an Optionee who, at the time the Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
10. OPTION EXERCISE PRICE AND CONSIDERATION.
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(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than
one hundred ten percent (110%) of the Fair Market Value per Share on the
date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option granted to any
person, the per Share exercise price shall be no less than eighty-five
percent (85%) of the Fair Market Value per Share on the date of grant.
(b) The Option exercise price of each share purchased pursuant to an
Option shall be paid in full at the time of each exercise of the Option: (i) in
cash; (ii) by check; (iii) by cash equivalent; (iv) by delivering to the Company
a notice of exercise with an irrevocable direction to a broker-dealer registered
under the Exchange Act to sell a sufficient portion of the shares and deliver
the sale proceeds directly to the Company to pay the exercise price; (v) in the
discretion of the Plan Administrator, through the delivery to the Company of
previously-owned shares of Common Stock having an aggregate Fair Market Value
equal to the Option exercise price of the shares being purchased pursuant to the
exercise of the Option; provided, however, that shares of Common Stock delivered
in payment of the exercise price must have been held by the Participant for at
least six (6) months in order to be utilized to pay the exercise price; or (vi)
in the discretion of the Plan Administrator, through any combination of the
foregoing methods of payment.
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11. EXERCISE OF OPTION.
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(a) Procedure for Exercise; Rights as a Shareholder. Any Option
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granted hereunder shall be exercisable at such times and under such conditions
as determined by the Plan Administrator, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company through a method of payment allowable under Section 10(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 15 of the Plan.
(b) Termination of Employment. Except as set forth below, in the
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event of termination of an Optionee's Continuous Status as an Employee,
consulting relationship or Director status with the Company (as the case may
be), such Optionee may, but only within ninety (90) days (or such other period
of time as is determined by the Board, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding ninety (90) days) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that Optionee was
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
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Section 11(b) above, in the event of termination of an Optionee's Continuous
Status as an Employee, consulting relationship or Director status (as the case
may be) as a result of his or her total and permanent disability (as defined in
Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent the Optionee was otherwise entitled to exercise it at
the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
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(d) Death of Optionee.
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(i) In the event of the death of an Optionee during the term of
Optionee's Continuous Status as an Employee, consulting relationship or Director
status with the Company (as the case may be), the Option may be exercised, at
any time within twelve (12) months following the date of death (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
the Optionee was entitled to exercise the Option at the date of death. To the
extent that Optionee was not entitled to exercise the Option at the date of
death, or if the Option is not exercised by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance to the
extent so entitled within the time specified herein, the Option shall terminate.
(ii) In the event of the death of an Optionee within thirty
(30) days after the termination of Optionee's Continuous Status as an Employee,
consulting relationship or Director status with the Company (as the case may be)
pursuant to Section 11(b) above, the Option may be exercised, at any time within
six (6) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of death. To the extent
that Optionee was not entitled to exercise the Option at the date of death, or
if the Option is not exercised by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance to the
extent so entitled within the time specified herein, the Option shall terminate.
(e) Termination for Cause or Post-Termination Relationship with
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Competing Business. Notwithstanding the provisions of Section 11(b) above, in
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the event of "Termination for Cause" of an Optionee's Continuous Status as an
Employee, consulting relationship or Director status with the Company (as the
case may be) or in the event that such Optionee within the option term becomes
an employee, consultant or director of a Competing Business (as defined herein),
any Option held by the Optionee, whether vested or unvested, shall forthwith
terminate. In addition to the immediate forfeiture of all Options upon the
occurrence of the events specified in the preceding sentence, Optionee shall
automatically forfeit all shares underlying any exercised portion of an Option
for which the Company has not yet delivered the share certificates, upon refund
by the Company of the exercise price paid by the Optionee for such Shares. For
purposes of this Plan, the term "Competing Business" shall mean any person,
corporation or other entity engaged in the business of: (i) providing strategic
Internet consulting services, interactive Internet solutions, application
management services and management consulting services; or (ii) selling or
attempting to sell any product or service which is the same as or similar to
products or services sold by the Company within the last year prior to
termination of such Participant's employment, consulting relationship or
Director status, as the case may be, hereunder.
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12. RESTRICTED STOCK AWARDS.
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(a) The Plan Administrator may grant Restricted Stock Awards to any
officer, Employee or Consultant of the Company and its Subsidiaries. A
Restricted Stock Award entitles the recipient to acquire shares of Common Stock
subject to such restrictions and conditions as the Plan Administrator may
determine at the time of grant. Conditions may be based on continuing employment
(or other business relationship) and/or achievement of pre-established
performance goals and objectives.
(b) Upon execution of a written instrument setting forth the
Restricted Stock Award and paying any applicable purchase price, a Participant
shall have the rights of a shareholder with respect to the Common Stock subject
to the Restricted Stock Award, including, but not limited to, the right to vote
and receive dividends with respect thereto; provided, however, that shares of
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Common Stock subject to Restricted Stock Awards that have not vested shall be
subject to the restrictions on transferability described in Section 12(d) below.
Unless the Plan Administrator shall otherwise determine, certificates evidencing
the Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 12(c) below.
(c) The Plan Administrator at the time of grant shall specify the
date or dates and/or the attainment of pre-established performance goals,
objectives and other conditions on which Restricted Stock shall become vested,
subject to such further rights of the Company or its assigns as may be specified
in the instrument evidencing the Restricted Stock Award. If the grantee or the
Company, as the case may be, fails to achieve the designated goals or the
grantee's relationship with the Company is terminated prior to the expiration of
the vesting period, the grantee shall forfeit all shares of Common Stock subject
to the Restricted Stock Award which have not then vested.
(d) Unvested Restricted Stock may not be sold, assigned transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award.
13. STOCK AWARDS. The Plan Administrator may, in its sole discretion,
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grant (or sell at a purchase price determined by the Plan Administrator) a Stock
Award to any officer, Employee or Consultant of the Company or its Subsidiaries,
pursuant to which such individual may receive shares of Common Stock free of any
vesting restrictions (a "Stock Award") under the Plan. Stock Awards may be
granted or sold as described in the preceding sentence in respect of past
services or other valid consideration, or in lieu of any cash compensation due
to such individual.
14. WITHHOLDING TAX OBLIGATIONS.
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(a) Whenever Shares are to be issued under the Plan, the Company
shall have the right to require the Participant to remit to the Company an
amount sufficient to satisfy applicable federal, state and local tax withholding
requirements prior to the delivery of any certificate for Shares; provided,
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however, that in the case of a Participant who receives an Award of Shares under
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the Plan which is not fully vested, the Participant shall remit such amount on
the first business day following the Tax Date. The "Tax Date" for purposes of
this Section 14 shall
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be the date on which the amount of tax to be withheld is determined. If a
Participant makes a disposition of shares acquired upon the exercise of an
Incentive Stock Option within either two (2) years after the Option was granted
or one (1) year after its exercise by the Participant, the Participant shall
promptly notify the Company and the Company shall have the right to require the
Participant to pay to the Company an amount sufficient to satisfy federal, state
and local tax withholding requirements.
(b) A Participant who is obligated to pay the Company an amount
required to be withheld under applicable tax withholding requirements may pay
such amount: (i) in cash; (ii) in the discretion of the Plan Administrator,
through the delivery to the Company of previously-owned shares of Common Stock
having an aggregate Fair Market Value on the Tax Date equal to the tax
obligation, provided that the previously owned shares delivered in satisfaction
of the withholding obligations must have been held by the Participant for at
least six (6) months; or (iii) in the discretion of the Plan Administrator,
through a combination of the procedures set forth in subsections (i) and (ii) of
this Section 14(b).
(c) A Participant who is obligated to pay to the Company an amount
required to be withheld under applicable tax withholding requirements in
connection with either the exercise of a Nonstatutory Stock Option, the receipt
of a Restricted Stock Award or Stock Award under the Plan may, in the discretion
of the Plan Administrator, elect to satisfy this withholding obligation, in
whole or in part, by requesting that the Company withhold shares of stock
otherwise issued to the Participant having a Fair Market Value on the Tax Date
equal to the amount of the tax required to be withheld; provided, however, that
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shares may be withheld by the Company only if such withheld shares have vested.
Any fractional amount shall be paid to the Company by the Participant in cash or
shall be withheld from the Participant's next regular paycheck.
(d) An election by a Participant to have shares of stock withheld to
satisfy federal, state and local tax withholding requirements pursuant to
Section 14(c) must be in writing and delivered to the Company prior to the Tax
Date.
15. ADJUSTMENT OF NUMBER AND PRICE OF SHARES.
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Any other provision of the Plan notwithstanding:
(a) If, through or as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Plan Administrator shall make an appropriate or proportionate adjustment in: (i)
the number of Options that can be granted to any one individual Participant;
(ii) the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan; and (iii) the price for each share subject to
any then outstanding Options under the Plan, without changing the aggregate
exercise price (i.e., the exercise price multiplied by the number of shares) as
to which such Options remain exercisable; and (iv) the maximum
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number of shares that may be issued under the Plan, the maximum number of shares
that are available for the award of Incentive Stock Options and the maximum
number of shares that may be granted to any one individual Participant during
any one (1) calendar year period, each as set forth in Section 3 hereof. The
adjustment by the Plan Administrator shall be final, binding and conclusive.
(b) In the event that, by reason of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board shall authorize the issuance or assumption of an Option
or Options in a transaction to which Section 424(a) of the Code applies, then,
notwithstanding any other provision of the Plan, the Plan Administrator may
grant an Option or Options upon such terms and conditions as it may deem
appropriate for the purpose of assumption of the old Option, or substitution of
a new Option for the old Option, in conformity with the provisions of Code
Section 424(a) and the rules and regulations thereunder, as they may be amended
from time to time.
(c) No adjustment or substitution provided for in this Section 15
shall require the Company to issue or to sell a fractional share under any
Option Agreement or share award agreement and the total adjustment or
substitution with respect to each Option and share award agreement shall be
limited accordingly.
(d) In the case of the dissolution or liquidation of the Company,
the Plan and all Awards granted hereunder shall terminate. In the event of such
proposed termination, each Participant shall be notified of such termination and
shall be permitted to exercise for a period of at least fifteen (15) days prior
to the date of such termination all Options held by such Participant which are
then exercisable.
(e) In the case of: (i) a merger, reorganization or consolidation in
which the Company is acquired by another person or entity (other than a holding
company formed by the Company); (ii) the sale of all or substantially all of the
assets of the Company to an unrelated person or entity which is not an
"affiliate" (as defined in Rule 144 of the Securities Act of 1933) of the
Company; or (iii) the sale of all of the capital stock of the Company to an
unrelated person or entity which is not an "affiliate" of the Company (in each
case, a "Fundamental Transaction"), all Options shall be assumed or equivalent
options shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation. For the purposes of this paragraph,
the Options shall be considered assumed if, following the Fundamental
Transaction, the Options confer the right to purchase, for each Share subject to
the Options immediately prior to the Fundamental Transaction, the consideration
(whether stock, cash, or other securities or property) received in the
Fundamental Transaction by holders of Common Stock for each Share held on the
effective date of the Fundamental Transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
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consideration received in the Fundamental Transaction was not solely common
stock of the successor corporation or its Parent, the Board may, with the
consent of the successor corporation and the Participant, provide for the
consideration to be received upon the exercise of the Options, for each Share
subject to the Options, to be solely common stock of the successor corporation
or its Parent equal in Fair Market Value to the per share consideration received
by holders of Common Stock in the Fundamental Transaction.
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In the event that such successor corporation does not agree to assume
the Options or to substitute equivalent options, the Board shall provide for
each Optionee to have the right to exercise all Options then held by such
Optionee, including Options which would not otherwise be exercisable. In such
event, the Board shall notify each Optionee that such Options shall be fully
exercisable for a period of fifteen (15) days from the date of receipt of such
notice, and that such Options will terminate upon the expiration of such period.
Notwithstanding anything in the Plan to the contrary, the acceleration
of exercisability in this Section shall not occur in the event that such
acceleration would, in the opinion of the Company's independent auditors, make
the Fundamental Transaction ineligible for pooling of interests accounting
treatment and the Company intends to use such treatment with respect to such
transaction. The Board shall obtain a written statement from the Company's
independent auditors with respect to the effect of accelerated exercisability of
outstanding Options prior to providing any Optionee with the notice contemplated
by this Section.
(f) In the event that the Company shall be merged or consolidated
with another corporation or entity, other than with a corporation or entity
which is an "affiliate" of the Company, under the terms of which holders of
capital stock of the Company will receive upon consummation thereof a cash
payment for each share of capital stock of the Company surrendered pursuant to
such transaction (the "Cash Purchase Price"), the Board may provide that all
outstanding options shall terminate upon consummation of such transaction and
each Optionee shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (i) the Cash Purchase Price multiplied by the number of
shares of Capital Stock of the Company subject to outstanding options held by
such optionee exceeds (ii) the aggregate exercise price of such options.
16. NONTRANSFERABILITY. A Participant's rights under the Plan, including
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the right to any shares or amounts payable may not be assigned, pledged, or
otherwise transferred except, in the event of a Participant's death, to the
Participant's designated beneficiary or, in the absence of such a designation,
by will or by the laws of descent and distribution; provided, however, that the
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Plan Administrator may, in its discretion, at the time of grant of a
Nonstatutory Stock Option or by amendment of an Option Agreement for an
Incentive Stock Option or a Nonstatutory Stock Option, provide that Options
granted to or held by a Participant may be transferred, in whole or in part, to
one or more transferees and exercised by any such transferee, provided further
that: (i) any such transfer must be without consideration; (ii) each transferee
must be a member of such Participant's "immediate family" (as defined below) or
a trust, family limited partnership or other estate planning vehicle established
for the exclusive benefit of one or more members of the Participant's immediate
family; and (iii) such transfer is specifically approved by the Plan
Administrator following the receipt of a written request for approval of the
transfer; and provided further that any Incentive Stock Option which is amended
to permit transfers during the lifetime of the Participant shall, upon the
effectiveness of such amendment, be treated thereafter as a Nonstatutory Stock
Option. In the event an Option is transferred as contemplated in this Section,
such transfer shall become effective when approved by the Plan Administrator and
such Option may not be subsequently transferred by the transferee other than by
will or the laws of descent and distribution. Any transferred Option shall
continue to be governed by and subject to the terms and conditions of this Plan
and the relevant Option Agreement, and the transferee shall be
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entitled to the same rights as the Participant as if no transfer had taken
place. As used in this Section, "immediate family" shall mean, with respect to
any person, any spouse, child, stepchild or grandchild, and shall include
relationships arising from legal adoption.
17. TERMINATION - CERTAIN FORFEITURES. Notwithstanding any other provision
---------------------------------
of the Plan to the contrary, a Participant shall have no right to exercise any
Option or vest or receive payment of any Restricted Stock Award or Stock Award
if: (a) the Participant is Terminated for Cause; or (b) if following the
Participant's termination from the Company and prior to the Company's delivery
of the shares of Common Stock underlying an Award, the Participant becomes an
officer or director of, a consultant to or employed by a Competing Business.
Furthermore, notwithstanding any other provision of the Plan to the contrary, in
the event that a Participant receives or is entitled to the delivery or vesting
of Common Stock pursuant to an Award during the twelve (12) month period prior
to the Participant's termination from the Company or during the twelve (12)
months following the Participant's termination from the Company, the Company, in
its sole discretion, may require the Participant to return or forfeit the cash
and/or Common Stock received with respect to such award (or its economic value
as of (i) the date of the exercise of Options; (ii) the date immediately
following the end of the Restricted Period for Restricted Stock Awards; or (iii)
the date of grant with respect to Stock Awards, as the case may be) in the event
that the Participant becomes an officer or director of, a consultant to or
employed by a Competing Business within eighteen (18) months of such
Participant's termination from the Company. The Company's right to require
forfeiture under this Section 17 must be exercised within ninety (90) days after
the discovery of an occurrence triggering the Plan Administrator's right to
require forfeiture but in no event later than twenty-four (24) months after the
Participant's termination from the Company.
18. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may at any time amend,
---------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
-------------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
19. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
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pursuant to any Award under the Plan unless the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
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requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
20. RESERVATION OF SHARES. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
21. AGREEMENTS. Options and Restricted Stock Awards shall be
----------
evidenced by written agreements in such form as the Board shall approve from
time to time.
22. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
---------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
23. INFORMATION TO OPTIONEES. The Company shall provide to each Optionee,
------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
* * * * *
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