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EXHIBIT 4.1
COMPUTER AUTOMATION SYSTEMS, INC.
2000 STOCK OPTION PLAN
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COMPUTER AUTOMATION SYSTEMS, INC.
2000 STOCK OPTION PLAN
SECTION 1
GENERAL
(a) PURPOSE. This Computer Automation Systems, Inc. 2000 Stock Option
Plan (the "Plan") has been established by Computer Automation Systems, Inc. (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation opportunities that are
competitive with those of other similar companies; and (iv) further identify
Participants' interests with those of the Company's other shareholders through
compensation that is based on the Company's common stock; and thereby promote
the long-term financial interest of the Company and the Related Corporations,
including the growth in value of the Company's equity and enhancement of
long-term shareholder return. With respect to any Incentive Stock Options that
may be granted hereunder, the Plan is intended to be an incentive stock option
plan within the meaning of section 422 of the Code.
(b) PARTICIPATION. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Employees, those persons who will be granted one or more Awards under,
and thereby become "Participants" in, the Plan. In the discretion of the
Committee, a Participant may be granted more than one Award. Awards may be
granted as alternatives to, or replacements of, awards already outstanding under
the Plan or any other plan or arrangement of the Company or a Related
Corporation (including a plan or arrangement of a business or entity, all or a
portion of which is acquired by the Company or a Related Corporation).
(c) OPERATION, ADMINISTRATION, AND DEFINITIONS. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 3 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan.
SECTION 2
STOCK OPTIONS
2.1 TYPES OF OPTIONS. The grant of an "Option" entitles the Participant
to purchase shares of Stock at an Exercise Price established by the Committee.
Options granted under this Plan may be either Incentive Stock Options ("ISOs")
or Non-Qualified Options ("NQOs"), as determined in the discretion of the
Committee. An ISO is an Option that is intended to satisfy the requirements
applicable to "incentive stock options" described in section 422(b) of the Code.
An NQO is any option that is not an ISO.
2.2 EXERCISE PRICE. The "Exercise Price" of each Option shall be
established by the Committee or shall be determined by a method established by
the Committee, provided, however, that
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the exercise price of an ISO shall in no event be less than one hundred percent
(100%) of the Fair Market Value per share of Stock on the option Grant Date.
2.3 TEN PERCENT STOCKHOLDERS. If a Participant owns more than ten
percent of the total combined voting power of all shares of stock of the Company
or any Related Corporation at the time an ISO is granted to such Participant,
the Exercise Price for the ISO shall be not less than one hundred ten percent
(110%) of the Fair Market Value of the shares of Stock subject to the ISO on the
day the ISO is granted, and such ISO, by its terms shall not be exercisable
after the expiration of five years from the date the ISO is granted.
2.4 EXERCISE OF OPTIONS.
(a) An Option may be exercised only by giving written notice
specifying the number of shares as to which the Option is
being exercised, accompanied (except as otherwise provided in
Subsection (b) of this Section 2.4) by full payment for such
shares in the form of check or bank draft payable to the order
of the Company. The Committee may, in its sole discretion,
permit a Participant to pay the Exercise Price with other
shares of the Stock with a current Fair Market Value equal to
the Exercise Price of the shares to be purchased. Receipt by
the Company of such notice and payment shall constitute the
exercise of the Option or a part thereof. Within 20 days
thereafter, the Company shall deliver or cause to be delivered
to the Participant a certificate or certificates for the
number of shares then being purchased. Such shares shall be
fully paid and nonassessable. If such shares are not at that
time effectively registered under the Securities Act of 1933,
as amended, the Participant shall include with such notice a
letter, in form and substance satisfactory to the Company,
confirming that such shares are being purchased for the
Participant's own account for investment and not with a view
to distribution.
(b) The Committee may, in its sole discretion, permit a
Participant to elect to effect payment of the Exercise Price
by including with the written notice referred to in Subsection
(a), irrevocable instructions to deliver for sale to a
registered securities broker acceptable to the Company, a
number of the shares subject to the Option being exercised
sufficient, after brokerage commissions, to cover the
aggregate exercise price of such Option and, if the
Participant further elected, the Participant's withholding
obligations with respect to such exercise, together with
irrevocable instructions to such broker to sell such shares
and to remit directly to the Company such aggregate exercise
price and, if the Participant has so elected, the amount of
such withholding obligation. The Company shall not be required
to deliver to such securities broker any stock certificate for
such shares until it has received from the broker such
exercise price and, if the Participant has so elected, such
withholding obligation amount.
2.5 SETTLEMENT OF AWARD. Shares of Stock delivered pursuant to the
exercise of an option shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award Agreement.
The Committee, in its discretion, may impose such
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conditions, restrictions and contingencies with respect to shares of Stock
acquired pursuant to the exercise of an Option as it determines is desirable.
2.6 OPTION PERIOD. No ISO may be exercised later than the tenth
anniversary of the Grant Date. The exercise period for a NQO shall be as set
forth in the Award Agreement. An Option may become exercisable in such
installments, cumulative or non-cumulative, or may be immediately exercisable,
as the Committee may determine and as set forth in the Award Agreement.
2.7 MAXIMUM SIZE OF INCENTIVE STOCK OPTION AS SUCH. To the extent that
the aggregate Fair Market Value of Stock for which an Incentive Stock Option
becomes exercisable by an Participant for the first time in any calendar year
exceeds $100,000, the portion of such Incentive Stock Option which exceeds such
$100,000 limitation shall be treated as a Non-Statutory Stock Option, and not an
Incentive Stock Option under section 422 of the Code. For purposes of this
Section 2.7, all Incentive Stock Options granted to an Participant by the
Company, as well as any options that have been granted to the Participant under
any other stock incentive plans of the Company or any Related Corporation which
are intended to comply with the provisions of section 422 of the Code, shall be
considered in the order in which they were granted, and the Fair Market Value
shall be determined as of the Grant Date.
SECTION 3
OPERATION AND ADMINISTRATION
3.1 EFFECTIVE DATE. Subject to the approval of the shareholders of the
Company, the Plan shall be effective as of June 5, 2000 (the "Effective Date");
provided, however, that to the extent that Awards are granted under the Plan
prior to its approval by shareholders, the Awards shall be contingent on
approval of the Plan by the shareholders of the Company at an annual meeting,
special meeting, or by written consent.
3.2 TERM OF THE PLAN. The Plan shall terminate upon the earliest of (i)
June 5, 2010, (ii) the date on which all shares available for issuance under the
Plan have been issued as fully-vested shares, or (iii) termination of all
outstanding options in connection with a Change in Control.
3.3 STOCK SUBJECT TO PLAN.
(a) The shares of Stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Stock, including shares
repurchased by the Company. The maximum number of shares of
Stock initially reserved for issuance over the term of the
Plan shall not exceed Five Hundred Thousand (500,000) shares.
No Participant may be granted in any year Options to purchase
more than Two Hundred Fifty Thousand (250,000) shares of
Stock, subject to adjustment pursuant to this Section 3.3.
Shares to be issued upon the exercise of Options granted under
the Plan may be either authorized but unissued shares or
shares held by the Company in its treasury. If an Option
expires or terminates for any reason without having been
exercised in full, the shares not purchased thereunder shall
again be available for Options thereafter to be granted.
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(b) The number of shares of Stock available for issuance under the
Plan shall automatically increase on the first day of each
calendar year during the term of the Plan, beginning with the
2001 calendar year, by an amount equal to one and one-quarter
percent (1.25%) of the shares of Stock outstanding on the last
day of the immediately preceding calendar year, but in no
event shall such annual increase exceed Two Hundred Thousand
(200,000) shares.
(c) In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination or exchange of shares), the Committee may adjust
Awards to preserve the benefits or potential benefits of the
Awards. Action by the Committee may include: (i) adjustment of
the number and kind of shares which may be delivered under the
Plan; (ii) adjustment of the number and kind of shares subject
to outstanding Awards; (iii) adjustment of the Exercise Price
of outstanding Options; and (iv) any other adjustments that
the Committee determines to be equitable.
3.4 GENERAL RESTRICTIONS. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Stock under
the Plan or make any other distribution of benefits under the
Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the
requirements of any securities exchange or similar entity.
(b) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the
issuance may be effected on a non-certificated basis, to the
extent not prohibited by law or the rules of any stock
exchange.
3.5 TAX WITHHOLDING. All exercises of Options under the Plan are
subject to withholding of all applicable taxes, including all federal, state and
local income and employment tax withholding obligations, and the Committee may
condition the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations. The Committee may, at or
after grant, permit a Participant to satisfy such tax withholding requirements
by delivery to the Company of shares retained from the Option grant creating the
tax obligation having a value equal to the amount to be withheld. The value of
shares of Stock to be withheld or delivered shall be based on the Committee's
determination of the Fair Market Value of a share of Stock on the date the
amount of tax to be withheld is to be determined.
3.6 NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF SPECIFIED
INCENTIVE STOCK OPTION HOLDING PERIOD. The Company may require that the person
exercising an Incentive Stock Option give a written representation to the
Company, satisfactory in form and substance to its counsel and upon which the
Company may reasonably rely, that he or she will report to the Company any
disposition of shares purchased upon exercise prior to the expiration of the
holding periods specified by section 422(a)(1) of the Code. If and to the extent
that the disposition imposes upon the Company
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federal, state, local or other withholding tax requirements, or any such
withholding is required to secure for the Company an otherwise available tax
deduction, the Company shall have the right to require that the person making
the disposition remit to the Company an amount sufficient to satisfy those
requirements.
3.7 TRANSFERABILITY. Except as otherwise provided by the Committee,
Awards under the Plan are not transferable except as designated by the
Participant by will or by the laws of descent and distribution and may be
exercised during the life of the Participant only by the Participant.
3.8 TERMINATION OF SERVICE.
(a) The following provisions shall govern the exercise of any
options outstanding at the time of the Participant's
termination of Service or death:
(i) Any option outstanding at the time of the Participant's
termination of Service for any reason shall remain
exercisable for such period of time thereafter as shall
be determined by the Committee and set forth in the
documents evidencing the option, but no such option
shall be exercisable after the expiration of the option
term.
(ii) Any option exercisable in whole or in part by the
Participant at the time of death may be subsequently
exercised by his or her Beneficiary.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more
than the number of vested shares for which the option is
exercisable on the date of the Participant's termination
of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to
be outstanding for any vested shares for which the
option has not been exercised. However, the option
shall, immediately upon the Participant's termination of
Service, terminate and cease to be outstanding to the
extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Participant's Service be terminated for
Misconduct or should the Participant engage in
Misconduct while his or her options are outstanding,
then, subject to the discretion of the Committee, all
such options shall terminate immediately and cease to be
outstanding.
(b) The Committee shall have complete discretion, exercisable
either at the time an option is granted or at any time while
the option remains outstanding:
(i) to extend the period of time for which the option is to
remain exercisable following the Participant's
termination of Service
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to such period of time as the Committee shall deem
appropriate, but in no event beyond the expiration of
the option term, and/or
(ii) to permit the option to be exercised, during the
applicable post-Service exercise period, for one or more
additional installments in which the Participant would
have vested had the Participant continued in Service.
Notwithstanding the foregoing, in the event a Participant fails to
exercise an Incentive Stock Option within three months after the date
of his or her retirement, such Option will be treated as a
Non-Statutory Stock Option.
3.9 CHANGE IN CONTROL. Upon a Change in Control, each outstanding
Option shall immediately become fully exercisable, and a registration statement
under the Securities Act of 1933, as amended, with respect to shares covered by
all outstanding Options, whether to be issued by the Company or by any successor
corporation, shall be effective at all times during which the Options may be
exercised and, to facilitate resale of the shares, during the twelve months
after the last exercise of the Options.
3.10 FORM AND TIME OF ELECTIONS. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
3.11 AGREEMENT WITH COMPANY. An Award under the Plan shall be subject
to such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not, require that the Participant
sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is required.
3.12 ACTION BY COMPANY OR RELATED CORPORATION. Any action required or
permitted to be taken by the Company or any Related Corporation shall be by
resolution of its board of directors, or by action of one or more members of the
board (including a committee of the board) who are duly authorized to act for
the board, or (except to the extent prohibited by applicable law or applicable
rules of any stock exchange) by a duly authorized officer of such company.
3.13 GENDER AND NUMBER. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural,
and the plural shall include the singular.
3.14 LIMITATION OF IMPLIED RIGHTS. The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
participating employee the right to be
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retained in the employ of the Company or any Related Corporation, nor any right
or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as otherwise provided
in the Plan, no Award under the Plan shall confer upon the holder thereof any
rights as a shareholder of the Company prior to the date on which the individual
fulfills all conditions for receipt of such rights.
3.15 EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document, or other information that the person acting on
it considers pertinent and reliable, and signed, made, or presented by the
proper party or parties.
SECTION 4
COMMITTEE
4.1 ADMINISTRATION. The authority to control and manage the operation
and administration of the Plan shall be vested in a committee (the "Committee")
in accordance with this Section 4. The Committee shall be selected by the Board
and shall consist solely of two or more members of the Board who at the relevant
time are non-employee "outside directors" within the meaning of section 162(m)
of the Code. If the Committee does not exist, or for any other reason determined
by the Board, the Board may take any action under the Plan that would otherwise
be the responsibility of the Committee.
4.2 POWERS OF COMMITTEE. The Committee's administration of the Plan
shall be subject to the following:
(a) Subject to the provisions of the Plan, the Committee shall
have the authority and discretion to select from among the
Eligible Employees those persons who shall receive Awards, to
determine the time or times of receipt, to determine the types
of Awards and the number of shares covered by the Awards, to
establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards, and
(subject to the restrictions imposed by Section 5) to cancel
or suspend Awards. In making such determination, the Committee
may take into account the nature of the services rendered by
the respective employees, their present and potential
contributions to the success of the Company and its Related
Corporations, and such other factors as the Committee in its
discretion shall deem relevant. Subject to the provisions of
the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and
provisions of the respective Award Agreements (which need not
be identical), and to make all other determinations necessary
or advisable for the administration of the Plan. The
Committee's determinations on the matters referred to in this
Section 4 shall be conclusive.
(b) The Committee shall have the authority and discretion to
interpret the Plan, to establish, amend, and rescind any rules
and regulations relating to the Plan, to determine the terms
and provisions of any Award Agreement made pursuant to the
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Plan, and to make all other determinations that may be
necessary or advisable for the administration of the Plan.
(c) Any interpretation of the Plan by the Committee and any
decision made by it under the Plan is final and binding on all
persons.
(d) In controlling and managing the operation and administration
of the Plan, the Committee shall take action in a manner that
conforms to the articles and by-laws of the Company, and
applicable state corporate law.
4.3 DELEGATION BY COMMITTEE. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
4.4 INFORMATION TO BE FURNISHED TO COMMITTEE. The Company and Related
Corporations shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Related Corporations as to a Participant's employment (or other
provision of services), termination of employment (or cessation of the provision
of service), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data, or information as the Committee considers desirable to carry out the terms
of the Plan.
SECTION 5
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected Beneficiary), adversely affect the rights of any Participant or
Beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments pursuant to
subsection 3.3(c) shall not be subject to the foregoing limitations of this
Section 5.
SECTION 6
DEFINED TERMS
In addition to the other definitions contained herein, the following
definitions shall apply:
(a) Award. The term "Award" shall mean the grant of Options.
(b) Award Agreement. The term "Award Agreement" shall mean the
document evidencing the grant of the Award.
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(c) Beneficiary. The term "Beneficiary" shall mean in the event
the Committee implements a beneficiary designation procedure,
the person designated by a Participant, pursuant to such
procedure, to succeed to such person's rights under any
outstanding awards held by him or her at the time of death. In
the absence of such designation or procedure, the Beneficiary
shall be the personal representative of the estate of the
Participant or the person or persons to whom the award is
transferred by will or the laws of descent and distribution.
(d) Board. The term "Board" shall mean the Board of Directors of
the Company.
(e) Change in Control. "Change in Control" means (a) the time of
approval by the shareholders of the Company of (i) any
consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to
which shares of Stock would be converted into cash, securities
or other property, other than a merger in which the holders of
Stock immediately prior to the merger will have the same
proportionate ownership of common stock of the surviving
corporation immediately after the merger, (ii) any sale,
lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all
the assets of the Company, or (iii) adoption of any plan or
proposal for the liquidation or dissolution of the Company; or
(b) the date on which any "person" (as defined in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended), that does not currently own any equity interest in
the Company other than the Company or a subsidiary or employee
benefit plan or trust maintained by the Company or any of its
subsidiaries, shall become (together with its "affiliates" and
"associates," as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended) the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended), directly or indirectly, of more than 25% of
the Stock outstanding at the time, without the prior approval
of the Board of Directors of the Company.
(f) Code. The term "Code" means the Internal Revenue Code of 1986,
as amended. A reference to any provision of the Code shall
include reference to any successor provision of the Code.
(g) Grant Date. "Grant Date" shall mean the date the Award is
granted to the Participant.
(h) Eligible Employee. The term "Eligible Employee" shall mean any
employee of the Company or a Related Corporation and any
director, consultant, or other person providing key services
to the Company or a Related Corporation; provided, however,
that any Option granted to any person who is not at the time
of the grant an employee of the Company shall be an NQO.
Options may be granted in connection with hiring an employee
prior to the date the employee first performs services for the
Company or any Related Corporation, provided that any such
Option shall be an NQO.
(i) Fair Market Value. For purposes of determining the "Fair
Market Value" of a share of Stock as of any date, the
following rules shall apply:
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(i) If the principal market for the Stock is a national
securities exchange or the NASDAQ stock market, then the
"Fair Market Value" as of that date shall be the mean
between the lowest and highest reported sale prices of
the Stock on that date on the principal exchange on
which the Stock is then listed or admitted to trading.
(ii) If sale prices are not available or if the principal
market for the Stock is not a national securities
exchange and the Stock is not quoted on the NASDAQ stock
market, the average between the highest bid and lowest
asked prices for the Stock on such day as reported on
the NASDAQ OTC Bulletin Board Service or by the National
Quotation Bureau, Incorporated or a comparable service.
(iii) If subparagraphs (i) and (ii) next above would be
applicable, except that the day is not a business day,
the Fair Market Value of the Stock shall be determined
as of the last preceding business day.
(iv) If subparagraphs (i), (ii) and (iii) next above are
inapplicable, then the Fair Market Value of the Stock
shall be its fair market value determined in good faith
by the Committee.
(j) Misconduct. "Misconduct" shall mean the commission of any act
of fraud, embezzlement or dishonesty by the Participant, any
unauthorized use or disclosure by such person of confidential
information or trade secrets of the Company or any Related
Corporation, or any intentional wrongdoing by such person,
whether by omission or commission, which adversely affects the
business or affairs of the Company or any Related Corporation
in a material manner. This shall not limit the grounds for the
dismissal or discharge of any person in the Service of the
Company or any Related Corporation. Acts of Misconduct shall
include, but shall not be limited to, failure to return
property of the Company, solicitation of the Company's
employees, customers or suppliers, and failure to comply with
any intellectual property agreements with the Company.
(k) Incentive Stock Option. An "Incentive Stock Option" shall mean
an option which satisfies the requirements of Code section
422.
(l) Non-Qualified Option. A "Non-Qualified Option" shall mean an
option not intended to satisfy the requirements of Code
section 422.
(m) Option. "Option" shall mean an option to purchase shares of
Stock granted under the Plan.
(n) Related Corporation. The term "Related Corporation" means any
company which it is a "parent corporation" (as that term is
defined in Code section 424(e)) or a "subsidiary corporation"
(as that term is defined in Code section 424(f)) with respect
to the Company.
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(o) Service. The term "Service" shall mean the performance of
services for the Company on any Related Corporation in the
capacity of an employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to
the extent otherwise specifically provided in the documents
evidencing the Award.
(p) Stock. The term "Stock" shall mean shares of common stock,
$0.001 par value, of the Company.
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