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Exhibit 10
WEB STREET, INC.
2000 STOCK PLAN
1. ESTABLISHMENT AND PURPOSE.
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The Web Street, Inc. 2000 Stock Plan (the "Plan") is established by Web Street,
Inc. (the "Company") to attract and retain persons eligible to participate in
the Plan; motivate Participants to achieve long-term Company goals; and further
align Participants' interests with those of the Company's other stockholders.
The Plan is adopted as of July 1, 2000. Unless the Plan is earlier discontinued
by the Board as provided herein, no Award shall be granted hereunder on or after
July 1, 2010.
Certain terms used herein are defined as set forth in Section 9.
2. ADMINISTRATION; ELIGIBILITY.
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The Plan shall be administered by a Committee; provided, however, that, if at
any time no Committee shall be in office, the Plan shall be administered by the
Board. The Plan may be administered by different Committees with respect to
different groups of Eligible Individuals. As used herein, the term
"Administrator" means the Board or any of its Committees as shall be
administering the Plan.
The Administrator shall have plenary authority to grant Awards pursuant to the
terms of the Plan to Eligible Individuals. Participation shall be limited to
such persons as are selected by the Administrator. Awards may be granted as
alternatives to, or replacement of, awards outstanding under the Plan or any
other plan or arrangement of the Company or a Subsidiary (including a plan or
arrangement of a business or entity, all or a portion of which is acquired by
the Company or a Subsidiary). The provisions of Awards need not be the same
with respect to each Participant.
Among other things, the Administrator shall have the authority, subject to the
terms of the Plan:
(a) to select the Eligible Individuals to whom Awards may from time to
time be granted;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Stock Awards or any combination thereof are to be
granted hereunder;
(c) to determine the number of shares of Stock to be covered by each Award
granted hereunder;
(d) to approve forms of agreement for use under the Plan;
(e) to determine the terms and conditions, not inconsistent with the terms
of this Plan, of any Award granted hereunder (including, but not
limited to, the option price, any vesting restriction or limitation,
any vesting acceleration or forfeiture waiver and any right of
repurchase, right of first refusal or other transfer restriction
regarding any Award and the shares of Stock relating thereto, based on
such factors or criteria as the Administrator shall determine);
(f) subject to Section 8(a), to modify, amend or adjust the terms and
conditions of any Award, at any time or from time to time, including,
but not limited to, with respect to (i) performance goals and
measurements applicable to performance-based Awards pursuant
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to the terms of the Plan and (ii) extension of the post-termination
exercisability period of Stock Options;
(g) to determine to what extent and under what circumstances Stock and
other amounts payable with respect to an Award shall be deferred;
(h) to determine the Fair Market Value; and
(i) to determine the type and amount of consideration to be received by
the Company for any Stock Award issued under Section 6.
The Administrator shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
Except to the extent prohibited by applicable law, the Administrator 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 portion of its responsibilities
and powers to any other person or persons selected by it. Any such allocation or
delegation may be revoked by the Administrator at any time. The Administrator
may authorize any one or more of their members or any officer of the Company to
execute and deliver documents on behalf of the Administrator.
Any determination made by the Administrator or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Administrator or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Administrator or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Company and Participants.
No member of the Administrator, and no officer of the Company, shall be liable
for any action taken or omitted to be taken by such individual or by any other
member of the Administrator or officer of the Company in connection with the
performance of duties under this Plan, except for such individual's own willful
misconduct or as expressly provided by law.
3. STOCK SUBJECT TO PLAN.
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Subject to adjustment as provided in this Section 3, the aggregate number of
shares of Stock which may be delivered under the Plan shall not exceed 300,000.
To the extent any shares of Stock covered by an Award are not delivered to a
Participant or beneficiary thereof because the Award expires, is forfeited,
canceled or otherwise terminated, or the shares of Stock are not delivered
because the Award is settled in cash or used to satisfy the applicable tax
withholding obligation, such shares shall not be deemed to have been delivered
for purposes of determining the maximum number of shares of Stock available for
delivery under the Plan.
Subject to adjustment as provided in this Section 3, the maximum number of
shares that may be covered by Awards of Stock Options and Stock Appreciation
Rights granted to any one individual during any calendar year shall be 50,000
shares.
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In the event of any Company stock dividend, stock split, combination or exchange
of shares, recapitalization or other change in the capital structure of the
Company, corporate separation or division of the Company (including, but not
limited to, a split-up, spin-off, split-off or distribution to Company
stockholders other than a normal cash dividend), sale by the Company of all or a
substantial portion of its assets (measured on either a stand-alone or
consolidated basis), reorganization, rights offering, partial or complete
liquidation, or any other corporate transaction, Company share offering or other
event involving the Company and having an effect similar to any of the
foregoing, the Administrator may make such substitution or adjustments in the
(i) number and kind of shares that may be delivered under the Plan, (ii)
additional maximums to that imposed in the immediately preceding paragraph,
(iii) number and kind of shares subject to outstanding Awards, (iv) exercise
price of outstanding Stock Options and Stock Appreciation Rights and (v) other
characteristics or terms of the Awards as it may determine appropriate in its
sole discretion to equitably reflect such corporate transaction, share offering
or other event; provided, however, that the number of shares subject to any
Award shall always be a whole number.
4. STOCK OPTIONS.
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Stock Options may only be Non-Qualified Stock Options and may be granted alone
or in addition to other Awards granted under the Plan.
Stock Options shall be evidenced by option agreements, each in a form approved
by the Administrator. An option agreement shall indicate on its face that it is
intended to be an agreement for a Non-Qualified Stock Option. The grant of a
Stock Option shall occur as of the date the Administrator determines.
Stock Options granted under this Section 4 shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Administrator shall deem desirable:
(a) Exercise Price. The exercise price per share of Stock purchasable
under a Stock Option shall be determined by the Administrator.
(b) Option Term. The term of each Stock Option shall be fixed by the
Administrator.
(c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times, and subject to such terms
and conditions, as shall be determined by the Administrator. If the
Administrator provides that any Stock Option is exercisable only in
installments, the Administrator may at any time waive such installment
exercise provisions, in whole or in part, based on such factors as the
Administrator may determine. In addition, the Administrator may at any
time, in whole or in part, accelerate the exercisability of any Stock
Option.
(d) Method of Exercise. Subject to the provisions of this Section 4,
Stock Options may be exercised, in whole or in part, at any time
during the option term by giving written notice of exercise to the
Company specifying the number of shares of Stock subject to the Stock
Option to be purchased.
The option price of any Stock Option shall be paid in full in cash (by
certified or bank check or such other instrument as the Company may
accept) or, unless otherwise provided in the applicable option
agreement, by irrevocably authorizing a third party to sell shares of
Stock (or a sufficient portion of the shares) acquired upon exercise
of the Stock Option and remit to the Company a sufficient portion of
the sale proceeds to pay the entire exercise price and any tax
withholding resulting from such exercise.
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No shares of Stock shall be issued upon exercise of a Stock Option
until full payment therefor has been made. Upon exercise of a Stock
Option (or a portion thereof), the Company shall have a reasonable
time to issue the Stock for which the Stock Option has been exercised,
and the Optionee shall not be treated as a stockholder for any
purposes whatsoever prior to such issuance. No adjustment shall be
made for cash dividends or other rights for which the record date is
prior to the date such Stock is recorded as issued and transferred in
the Company's official stockholder records, except as otherwise
provided herein or in the applicable option agreement.
(e) Transferability of Stock Options. Except as otherwise provided in an
option agreement, no Stock Option shall be transferable by the
Optionee other than by will or by the laws of descent and
distribution. A Stock Option shall be exercisable, during the
Optionee's lifetime, only by the Optionee or by the guardian or legal
representative of the Optionee, it being understood that the terms
"holder" and "Optionee" include the guardian and legal representative
of the Optionee named in the applicable option agreement and any
person to whom an option is transferred by will or the laws of descent
and distribution.
(f) Termination by Death. Unless otherwise provided in the applicable
option agreement, if an Optionee's employment or provision of services
terminates by reason of death, any Stock Option held by such Optionee
may thereafter be exercised, to the extent then exercisable, or on
such accelerated basis as the Administrator may determine, for a
period of one year from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is shorter.
(g) Termination by Reason of Disability. Unless otherwise provided in the
applicable option agreement, if an Optionee's employment or provision
of services terminates by reason of Disability, any Stock Option held
by such Optionee may thereafter be exercised by the Optionee, to the
extent it was exercisable at the time of termination, or on such
accelerated basis as the Administrator may determine, for a period of
three years from the date of such termination of employment or
provision of services or until the expiration of the stated term of
such Stock Option, whichever period is shorter; provided, however,
that if the Optionee dies within such period, unexercised Stock Option
held by such Optionee shall, notwithstanding the expiration of such
period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of 12 months from the
date of such death or until the expiration of the stated term of such
Stock Option, whichever period is shorter.
(h) Termination by Reason of Retirement. Unless otherwise provided in the
applicable option agreement, if an Optionee's employment, or provision
of services terminates by reason of Retirement, any Stock Option held
by such Optionee may thereafter be exercised by the Optionee, to the
extent it was exercisable at the time of such Retirement, or on such
accelerated basis as the Administrator may determine, for a period of
three years from the date of such termination of employment or
provision of services or until the expiration of the stated term of
such Stock Option, whichever period is shorter; provided, however,
that if the Optionee dies within such period, any unexercised Stock
Option held by such Optionee shall, notwithstanding the expiration of
such period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of 12 months from the
date of such death or until the expiration of the stated term of such
Stock Option, whichever period is shorter.
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(i) Other Termination. Unless otherwise provided in the applicable option
agreement, if an Optionee's employment or provision of services
terminates for any reason other than death, Disability or Retirement,
any Stock Option held by such Optionee shall thereupon terminate;
provided, however, that, if such termination of employment or
provision of services of the Optionee is involuntary on the part of
the Optionee and without Cause, such Stock Option, to the extent then
exercisable, or on such accelerated basis as the Administrator may
determine, may be exercised for the lesser of 90 days from the date of
such termination of employment or provision of services or the
remainder of such Stock Option's term; and provided, further, that if
the Optionee dies within such period, any unexercised Stock Option
held by such Optionee shall, notwithstanding the expiration of such
period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of 12 months from the
date of such death or until the expiration of the stated term of such
Stock Option, whichever period is shorter.
(j) Participant Loans. The Administrator may in its discretion authorize
the Company to:
(i) lend to an Optionee an amount equal to such portion of the
exercise price of a Stock Option as the Administrator may
determine; or
(ii) guarantee a loan obtained by an Optionee from a third-party for
the purpose of tendering such exercise price.
The terms and conditions of any loan or guarantee, including the term,
interest rate, whether the loan is with recourse against the Optionee
and any security interest thereunder, shall be determined by the
Administrator, except that no extension of credit or guarantee shall
obligate the Company for an amount to exceed the lesser of (i) the
aggregate Fair Market Value per share of Stock on the date of
exercise, less the par value of the shares of Stock to be purchased
upon the exercise of the Stock Option, and (ii) the amount permitted
under applicable laws or the regulations and rules of the Federal
Reserve Board and any other governmental agency having jurisdiction.
5. STOCK APPRECIATION RIGHTS.
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Stock Appreciation Rights may be granted in conjunction with all or part of any
Stock Option granted under the Plan. Such rights may be granted either at or
after the time of grant of such Stock Option. A Stock Appreciation Right shall
terminate and no longer be exercisable upon the termination or exercise of the
related Stock Option.
A Stock Appreciation Right may be exercised by an Optionee in accordance with
this Section 5 by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Administrator. Upon such
exercise and surrender, the Optionee shall be entitled to receive an amount
determined in the manner prescribed in this Section 5. Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
Stock Appreciation Rights shall be subject to such terms and conditions as shall
be determined by the Administrator, including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they
relate are exercisable in
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accordance with the provisions of Section 4 and this Section 5.
(ii) Upon the exercise of a Stock Appreciation Right, an Optionee
shall be entitled to receive an amount in cash, shares of Stock
or both equal in value to the excess of the Fair Market Value of
one share of Stock over the option price per share specified in
the related Stock Option, multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have been
exercised, with the Administrator having the right to determine
the form of payment.
(iii) A Stock Appreciation Right shall be transferable only to, and
shall be exercisable only by, such persons permitted with respect
to the underlying Stock Option in accordance with Section 4(e).
6. STOCK AWARDS OTHER THAN OPTIONS.
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Stock Awards may be directly issued under the Plan (without any intervening
options), subject to such terms, conditions, performance requirements,
restrictions, forfeiture provisions, contingencies and limitations as the
Administrator shall determine. Stock Awards may be issued which are fully and
immediately vested upon issuance or which vest in one or more installments over
the Participant's period of employment or other service to the Company or upon
the attainment of specified performance objectives, or the Company may issue
Stock Awards which entitle the Participant to receive a specified number of
vested shares of Stock upon the attainment of one or more performance goals or
service requirements established by the Administrator.
Shares representing a Stock Award shall be evidenced in such manner as the
Administrator may deem appropriate, including book-entry registration or
issuance of one or more certificates (which may bear appropriate legends
referring to the terms, conditions and restrictions applicable to such Award).
The Administrator may require that any such certificates be held in custody by
the Company until any restrictions thereon shall have lapsed and that the
Participant deliver a stock power, endorsed in blank, relating to the Stock
covered by such Award.
A Stock Award may be issued in exchange for any consideration which the
Administrator may deem appropriate in each individual instance, including,
without limitation:
(i) cash or cash equivalents;
(ii) past services rendered to the Company or any Affiliate; or
(iii) future services to be rendered to the Company or any Affiliate
(provided that, in such case, the par value of the stock subject
to such Stock Award shall be paid in cash or cash equivalents,
unless the Administrator provides otherwise).
7. CHANGE IN CONTROL PROVISIONS.
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(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:
(i) Any Stock Options and Stock Appreciation Rights outstanding as of
the date such Change in Control is determined to have occurred
and not then exercisable and vested shall become fully
exercisable and vested to the full extent of the
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original grant;
(ii) The restrictions applicable to any outstanding Stock Award shall
lapse, and the Stock relating to such Award shall become free of
all restrictions and become fully vested and transferable to the
full extent of the original grant;
(iii) All outstanding repurchase rights of the Company with respect to
any outstanding Awards shall terminate;
(iv) Outstanding Awards shall be subject to any agreement of merger or
reorganization that effects such Change in Control, which
agreement shall provide for:
(a) The continuation of the outstanding Awards by the Company,
if the Company is a surviving corporation;
(b) The assumption of the outstanding awards by the surviving
corporation or its parent or subsidiary;
(c) The substitution by the surviving corporation or its parent
or subsidiary of equivalent awards for the outstanding
Awards; or
(d) Settlement of each share of Stock subject to an outstanding
Award for the Change in Control Price (less, to the extent
applicable, the per share exercise price); and
(v) In the absence of any agreement of merger or reorganization
effecting such Change in Control, each share of Stock subject to
an outstanding Award shall be settled for the Change in Control
Price (less, to the extent applicable, the per share exercise
price).
(b) Definition of Change in Control. For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of
either (1) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (2) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
excluding, however, the following: (1) any acquisition directly
from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company, (2) any
acquisition by the Company; (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; (4) any
acquisition by (A) Joseph Fox or Avi Fox, (B) any spouse, child
or grandchild of Joseph Fox or Avi Fox (each, an "Immediate
Family Member"), (C) a trust or trusts for the exclusive benefit
of Joseph Fox, Avi Fox and/or any Immediate Family Members or (D)
a
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partnership, limited liability company, corporation or other
entity in which Joseph Fox, Avi Fox and/or any Immediate
Family Members are the holders of all of the equity interests,
or (5) any acquisition by any Person pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection
(iii) of this Section 7(b); or
(ii) Within any period of 24 consecutive months, a change in the
composition of the Board such that the individuals who,
immediately prior to such period, constituted the Board (such
Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority
of the Board; provided, however, for purposes of this Section
7(b), that any individual who becomes a member of the Board
during such period, whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at
least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such
individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(iii) The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Corporate Transaction"); excluding, however, such a
Corporate Transaction pursuant to which (1) all or
substantially all of the individuals and entities who are the
beneficial owners, respectively, of the outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets, either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of
the outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (2) no Person (other
than the Company; any employee benefit plan (or related trust)
sponsored or maintained by the Company, by any corporation
controlled by the Company, or by such corporation resulting
from such Corporate Transaction) will beneficially own,
directly or indirectly, more than 25% of, respectively, the
outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined
voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of
directors, except to the extent that such ownership existed
with respect to the Company prior to the Corporate
Transaction, and (3) individuals who were members of the Board
immediately prior to the approval by the stockholders of the
Corporation of such Corporate Transaction will constitute at
least a majority
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of the members of the board of directors of the corporation
resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, other than to a
corporation pursuant to a transaction which would comply with
clauses (1), (2) and (3) of subsection (iii) of this Section
7(b), assuming for this purpose that such transaction were a
Corporate Transaction.
(c) Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (i) the highest reported sales price,
regular way, of a share of Stock in any transaction reported on the
New York Stock Exchange Composite Tape or other national securities
exchange on which such shares are listed or on Nasdaq, as applicable,
during the 60-day period prior to and including the date of a Change
in Control, and (ii) if the Change in Control is the result of a
tender or exchange offer or a Corporate Transaction, the highest price
per share of Stock paid in such tender or exchange offer or Corporate
Transaction. To the extent that the consideration paid in any such
transaction described above consists all or in part of securities or
other non-cash consideration, the value of such securities or other
non-cash consideration shall be determined in the sole discretion of
the Board.
8. MISCELLANEOUS.
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(a) Amendment. The Board may amend, alter, or discontinue the Plan, but
no amendment, alteration or discontinuation shall be made which would
adversely affect the rights of a Participant under an Award
theretofore granted without the Participant's consent, except such an
amendment (i) made to avoid an expense charge to the Company or an
Affiliate, or (ii) made to permit the Company or an Affiliate a
deduction under the Code. No such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is
required by law, agreement or the rules of any stock exchange or
market on which the Stock is listed.
The Administrator may amend the terms of any Stock Option or other
Award theretofore granted, prospectively or retroactively, but no such
amendment shall adversely affect the rights of the holder thereof
without the holder's consent.
Notwithstanding anything in the Plan to the contrary, if any right
under this Plan would cause a transaction to be ineligible for pooling
of interests accounting that would, but for the right hereunder, be
eligible for such accounting treatment, the Administrator may modify
or adjust the right so that pooling of interests accounting shall be
available, including the substitution of Common Stock having a Fair
Market Value equal to the cash otherwise payable hereunder for the
right which caused the transaction to be ineligible for pooling of
interests accounting.
(b) Unfunded Status of Plan. It is intended that this Plan be an
"unfunded" plan for incentive and deferred compensation. The
Administrator may authorize the creation of trusts or other
arrangements to meet the obligations created under this Plan to
deliver Common Stock or make payments, provided that, unless the
Administrator otherwise determines, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of this
Plan.
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(c) General Provisions.
(i) The Administrator may require each person purchasing or
receiving shares pursuant to an Award to represent to and
agree with the Company in writing that such person is
acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any
legend which the Administrator deems appropriate to reflect
any restrictions on transfer.
All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such stock
transfer orders and other restrictions as the Administrator
may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange or market
on which the Stock is then listed and any applicable Federal
or state securities law, and the Administrator may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(ii) Nothing contained in the Plan shall prevent the Company or any
Affiliate from adopting other or additional compensation
arrangements for its employees.
(iii) The adoption of the Plan shall not confer upon any employee,
consultant or advisor any right to continued employment or
service, nor shall it interfere in any way with the right of
the Company or any Subsidiary or Affiliate to terminate the
employment or service of any employee, consultant or advisor
at any time.
(iv) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal
income tax purposes with respect to any Award under the Plan,
the Participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless
otherwise determined by the Administrator, withholding
obligations may be settled with Stock, including Stock that is
part of the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan
shall be conditional on such payment or arrangements, and the
Company, its Subsidiaries and its Affiliates shall, to the
extent permitted by law, have the right to deduct any such
taxes from any payment otherwise due to the Participant. The
Administrator may establish such procedures as it deems
appropriate for the settlement of withholding obligations with
Stock.
(v) The Administrator shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to
whom any amounts payable in the event of the Participant's
death are to be paid.
(vi) Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company
from the value of any shares of Common Stock, cash or other
thing of value under this Plan or an Agreement to be
transferred to the Participant, and no shares of Common Stock,
cash or other thing of value under this Plan or an Agreement
shall be transferred unless and until all disputes between the
Company and the Participant have been fully and finally
resolved and the Participant has waived all claims to such
against the Company or an Affiliate.
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(vii) The grant of an Award shall in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
(viii) Unless otherwise provided in any agreement between the
Participant and the Company or an Affiliate, if any payment or
right accruing to a Participant under this Plan (without the
application of this Section (8)(c)(viii)), either alone or
together with other payments or rights accruing to the
Participant from the Company or an Affiliate ("Total
Payments"), would constitute a "parachute payment" (as defined
in Section 280G of the Code and regulations thereunder), such
payment or right shall be reduced to the largest amount or
greatest right that will result in no portion of the amount
payable or right accruing under this Plan being subject to an
excise tax under Section 4999 of the Code or being disallowed
as a deduction under Section 280G of the Code. The
determination of whether any reduction in the rights or
payments under this Plan is to apply shall be made by the
Administrator in good faith after consultation with the
Participant, and such determination shall be conclusive and
binding on the Participant. The Participant shall cooperate in
good faith with the Administrator in making such determination
and providing the necessary information for this purpose. The
foregoing provisions of this Section 8(c)(viii) shall apply
with respect to any person only if, after reduction for any
applicable Federal excise tax imposed by Section 4999 of the
Code and Federal income tax imposed by the Code, the Total
Payments accruing to such person would be less than the amount
of the Total Payments as reduced, if applicable, under the
foregoing provisions of this Plan and after reduction for only
Federal income taxes.
(ix) To the extent that the Administrator determines that the
restrictions imposed by the Plan preclude the achievement of
the material purposes of the Awards in jurisdictions outside
the United States, the Administrator in its discretion may
modify those restrictions as it determines to be necessary or
appropriate to conform to applicable requirements or practices
of jurisdictions outside of the United States.
(x) The headings contained in this Plan are for reference purposes
only and shall not affect the meaning or interpretation of
this Plan.
(xi) If any provision of this Plan shall for any reason be held to
be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereby,
and this Plan shall be construed as if such invalid or
unenforceable provision were omitted.
(xii) This Plan shall inure to the benefit of and be binding upon
each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the
Company hereunder, shall be binding upon and inure to the
benefit of the Participant's heirs, legal representatives and
successors.
(xiii) This Plan and each agreement granting an Award constitute the
entire agreement with respect to the subject matter hereof and
thereof, provided that in the event of any inconsistency
between this Plan and such agreement, the terms and
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conditions of the Plan shall control.
(xiv) In the event there is an effective registration statement
under the Securities Act pursuant to which shares of Stock
shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the
underwriters managing the registered public offering, effect
any public sale or distribution of shares received directly or
indirectly pursuant to an exercise of an Award.
(xv) None of the Company, an Affiliate or the Administrator shall
have any duty or obligation to disclose affirmatively to a
record or beneficial holder of Stock or an Award, and such
holder shall have no right to be advised of, any material
information regarding the Company or any Affiliate at any time
prior to, upon or in connection with receipt or the exercise
of an Award or the Company's purchase of Stock or an Award
from such holder in accordance with the terms hereof.
(xvi) This Plan, and all Awards, agreements and actions hereunder,
shall be governed by, and construed in accordance with, the
laws of the state of Delaware (other than its law respecting
choice of law).
9. DEFINITIONS.
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For purposes of this Plan, the following terms are defined as set forth below:
(a) "Affiliate" means a corporation or other entity controlled by the
Company and designated by the Administrator as such.
(b) "Award" means a Stock Appreciation Right, Stock Option or Stock Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (i) the conviction of the Participant for committing a
felony under Federal law or the law of the state in which such action
occurred, (ii) dishonesty in the course of fulfilling the
Participant's duties as an employee of, or consultant or advisor to,
the Company or (iii) willful and deliberate failure on the part of the
Participant to perform such duties in any material respect.
Notwithstanding the foregoing, if the Participant and the Company or
the Affiliate have entered into an employment or services agreement
which defines the term "Cause" (or a similar term), such definition
shall govern for purposes of determining whether such Participant has
been terminated for Cause for purposes of this Plan. The determination
of Cause shall be made by the Administrator, in its sole discretion.
(e) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(f) "Commission" means the Securities and Exchange Commission or any
successor agency.
(g) "Committee" means a committee of Directors appointed by the Board to
administer this Plan.
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(h) "Company" means Web Street, Inc., a Delaware corporation.
(i) "Disability" means mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of
the Company or an Affiliate, or if the Participant is not covered by
such a plan or the Participant is not an employee of the Company or an
Affiliate, a mental or physical illness that renders a Participant
totally and permanently incapable of performing the Participant's
duties for the Company or an Affiliate; provided, however, that a
Disability shall not qualify under this Plan if it is the result of
(i) a willfully self-inflicted injury or willfully self-induced
sickness; or (ii) an injury or disease contracted, suffered or
incurred while participating in a criminal offense. Notwithstanding
the foregoing, if the Participant and the Company or an Affiliate have
entered into an employment or services agreement which defines the
term "Disability" (or a similar term), such definition shall govern
for purposes of determining whether such Participant suffers a
Disability for purposes of this Plan. The determination of Disability
shall be made by the Administrator, in its sole discretion. The
determination of Disability for purposes of this Plan shall not be
construed to be an admission of disability for any other purpose.
(j) "Director" means a member of the Company's Board of Directors.
(k) "Effective Date" means July 1, 2000.
(l) "Eligible Individual" means any employee of, or any consultant or
advisor providing services to, the Company or a Subsidiary or
Affiliate who is not an officer or director of the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
(n) "Fair Market Value" means, as of any given date, the fair market value
of the Stock as determined by the Administrator or under procedures
established by the Administrator. Unless otherwise determined by the
Administrator, the Fair Market Value per share shall be the closing
sales price per share of the Stock on the principal stock exchange or
market on which the Stock is traded on the date as of which such value
is being determined or the last previous day on which a sale was
reported.
(o) "Nasdaq" means The Nasdaq Stock Market, including the Nasdaq National
Market and the Nasdaq SmallCap Market.
(p) "Non-Qualified Stock Option" means any Stock Option that is not
intended to be or designated as an "incentive stock option" within the
meaning of Section 422 of the Code.
(q) "Optionee" means a person who holds a Stock Option.
(r) "Participant" means a person granted an Award.
(s) "Representative" means (a) the person or entity acting as the executor
or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the
jurisdiction of the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian
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or temporary guardian of a Participant; (c) the person or entity which
is the beneficiary of the Participant upon or following the
Participant's death; or (d) any person to whom an Option has been
transferred with the permission of the Administrator or by operation
of law; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law
and recognized by the Administrator.
(t) "Retirement" means retirement from active employment under a pension
plan of the Company or any subsidiary or Affiliate, or under an
employment contract with any of them, or termination of employment or
provision of services at or after age 55 under circumstances which the
Administrator, in its sole discretion, deems equivalent to retirement.
(u) "Stock" means Common Stock, par value $0.01 per share, of the Company.
(v) "Stock Appreciation Right" means a right granted under Section 5.
(w) "Stock Award" means an Award made in Stock or denominated in shares of
Stock.
(x) "Stock Option" means an option granted under Section 4.
(y) "Subsidiary" means any company during any period in which it is a
"subsidiary corporation" (as such term is defined in Section 424(f) of
the Code) with respect to the Company.
In addition, certain other terms used herein have the definitions given to them
in the first places in which they are used.
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