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Exhibit 10.1.2
ACTIVEWORLDS.COM, INC.
RESTATED 1999 LONG-TERM INCENTIVE PLAN
Preamble. Activeworlds.com, Inc., a corporation incorporated under the laws of
the State of Delaware (the "Corporation"), hereby adopts the following restated
incentive plan to be known as the Activeworlds.com, Inc. Restated 1999 Long-Term
Incentive Plan (the "Plan"). This Plan supercedes and replaces the
Activeworlds.com, Inc. 1999 Long-Term Incentive Plan.
Section I. Purpose of the Plan. The purposes of the Plan are (i) to associate
more closely the interests of certain key contributors to the success of the
Corporation with those of the Corporation's stockholders by encouraging stock
ownership, (ii) to provide long-term incentives and rewards to those persons who
are in a position to contribute to the long-term success and growth of the
Corporation and its subsidiaries, and (iii) to assist the Corporation and its
Affiliates (as hereinafter defined) in retaining and attracting key employees,
independent contractors, directors and other service providers. Awards under the
Plan may be made to employees of the Corporation and its Affiliates, and other
key service providers or consultants to the Corporation and its Affiliates.
Section II. Administration.
a. The Committee. The Plan shall be administered by a committee
appointed by the Board of Directors of the Corporation (the
"Committee"). The Committee shall be composed of members who (i) to
the extent necessary to comply with Rule 16b-3 as promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") are "Non-Employee Directors" within the meaning of Rule 16b-3
and (ii) to the extent any option granted hereunder is intended to
qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code of 1986, as amended and the regulations
promulgated thereunder (the "Code"), constitute "outside directors"
within the meaning of Section 162(m) of the Code. Such Committee
shall consist of not less than two members of the Corporation's
Board of Directors. The Board of Directors may, from time to time,
remove members from, or add members to, the Committee. Vacancies on
the Committee, howsoever caused, shall be filled by the Board of
Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it
may determine. A majority of the Committee at which a quorum is
present, or acts reduced to or approved in writing by a majority of
the members of the Committee, shall be the valid acts of the
Committee.
b. Authority and Discretion of Committee. Subject to the express
provisions of the Plan and provided that all actions taken shall be
consistent with the purposes of the Plan, the Committee shall have
full and complete authority and the sole discretion to: (i) select
the individuals to whom awards shall be granted under the
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Plan (the "Participants"); (ii) determine the size and the form of
the award or awards to be granted to any Participant; (iii)
determine the time or times such awards shall be granted; (iv)
establish the terms and conditions upon which such awards may be
exercised and/or transferred; (v) alter any restrictions; (vi)
interpret and construe provisions of the Plan or of any award
granted under it; and (vii) adopt such rules and regulations,
establish, define and/or interpret any other terms and conditions,
and make all other determinations (which may be on a case-by-case
basis) deemed necessary or desirable for the administration of the
Plan. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any stock option or other award granted
under it.
c. If at any time no Committee shall be in office, the Board of
Directors shall perform the functions of the Committee.
Section III. Awards. Awards under the Plan may include any or all of the
following, as described and defined herein: Stock Options, including Incentive
Stock Options and Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Share Awards and Performance Shares.
a. Stock Options. Stock options ("Stock Options") are rights to
purchase shares of common stock $0.001 par value of the Corporation
("Common Stock") at a stated price (determined by the Committee) on
the date of grant for a predetermined period of time.
i. The Committee may grant Stock Options either alone or
in conjunction with Stock Appreciation Rights as
described in paragraph d. below. It shall determine
the number of shares of Common Stock to be covered by
each such Stock Option.
ii. The Committee will determine the conditions of Stock
Option exercise as well as the conditions upon which
Stock Options shall lapse, but in no event may any
portion of a Stock Option be exercisable later than
ten (10) years from the date of the grant.
iii. The Committee may provide for acceleration of Stock
Option exercise in case of the acquisition of a
significant portion of the assets or a significant
change in ownership of the Corporation.
iv. The exercise price of any Stock Option shall be no
less than the Fair Market Value of the Common Stock on
the date such Stock Option is granted, shall be
determined by the Committee, and shall be paid in full
upon exercise, either (a) in cash, (b) by delivery of
shares of Common Stock (valued at their Fair Market
Value on the date of purchase, as defined in Section
IV) or (c) a combination of cash and Common Stock.
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In addition, the Committee may provide for the
cashless exercise of Stock Options.
b. Incentive Stock Options. Any Stock Option designated by the
Committee as an "Incentive Stock Option" is intended to qualify as
an "incentive stock option" within the meaning of Subsection 422
(b) of the Code and shall satisfy, in addition to the conditions of
Section III.a. hereof, the conditions set forth in this Section
III.b.
i. Incentive Stock Options may only be granted to common
law employees of the Corporation or its subsidiaries.
ii. On the date on which an Incentive Stock Option is
granted, the exercise price per share provided for in
such Incentive Stock Option will not be less than the
Fair Market Value of one share of the stock for which
such Incentive Stock Option may be exercised, provided
however, that an Incentive Stock Option may only be
granted to an individual who, on the date of grant,
owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of
stock of the Corporation or of any Affiliate (a "Ten
Percent Owner") if, on the date such Incentive Stock
Option is granted, the exercise price per share
provided for in such option granted to a Ten Percent
Owner is at least 110 percent of the Fair Market Value
of one share of the stock for which such Incentive
Stock Option may be exercised.
iii. An Incentive Stock Option may only be exercised during
the ten (10) year period following the date such
Incentive Stock Option is granted, provided however,
that an Incentive Stock Option may only be granted to
a Ten Percent Owner if such Incentive Stock Option by
its terms is not exercisable after the expiration of
the five (5) year period following the date such
Incentive Stock Option is granted.
iv. To the extent that the aggregate Fair Market Value of
stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual
during any calendar year under all option plans
maintained by the Corporation or any Affiliate exceeds
$100,000, such excess shall be treated as Nonqualified
Stock Options and not as Incentive Stock Options.
c. Nonqualified Stock Options. Any Stock Option designated by the
Committee as a "Nonqualified Stock Option" is intended to qualify
as a "non-statutory stock option" within the meaning of Section 83
of the Code and shall satisfy the conditions of Section III.a.
Nonqualified Stock Options may be granted to (i) individuals who
are key employees (including officers and directors who are also
key employees) of the Corporation or any Affiliate, (ii) Directors
who are not otherwise employees of the Corporation or an Affiliate;
or (iii) employees and other persons who are consultants to or
otherwise perform services to or for the
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benefit of the Corporation, any Affiliate, or any Affiliate
(whether or not a member of the Corporation's consolidated group),
all as the Committee shall determine from time to time.
d. Stock Appreciation Rights. "Stock Appreciation Rights" are rights
to receive cash and/or Common Stock in lieu of the purchase of
shares under a related Stock Option. The Committee may grant Stock
Appreciation Rights to any recipient of a Stock Option either at
the time of the grant of the Stock Option or subsequently, by
amendment to such grant. All Stock Appreciation Rights shall be
granted under and subject to the following terms and conditions,
and such other terms and conditions as the Committee may establish:
i. Each Stock Appreciation Right shall be exercisable at
the same times and with regard to the same number of
shares as the related Stock Option is exercisable.
ii. Each Stock Appreciation Right shall entitle the holder
thereof to surrender to the Corporation a portion of
or all of the unexercised, but exercisable, related
Stock Option, and to receive with respect to each
share of Common Stock represented by such surrendered
portion cash and/or shares of Common Stock of a value
equal to the amount by which the Fair Market Value of
each such share on the date of exercise exceeds the
exercise price provided in the related Stock Option.
The recipient shall not be required to pay the Stock
Option exercise price upon surrender of the Stock
Option or exercise of the related Stock Appreciation
Right.
iii. Each surrender of a portion of or all of a Stock
Option upon the exercise of a Stock Appreciation Right
shall cause a share for share reduction in the number
of shares of Common Stock covered by the related Stock
Option.
iv. Notwithstanding any other provision of the Plan, the
Committee may, from time to time, determine the
maximum amount of cash or stock which may be paid or
issued upon exercise of Stock Appreciation Rights (a)
in any year and/or (b) to any particular Participant.
In no event, however, may the cash portion of such
payment exceed 50% of the total amount due. Any other
limitation on payments may be changed by the Committee
from time to time, provided that no such change shall
require the holder to return to the Corporation any
amount theretofore received upon the exercise of Stock
Appreciation Rights.
e. Restricted Stock Awards. "Restricted Stock Awards" are grants of
Common Stock to a Participant subject to the restrictions described
in the following subsections.
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i. The Committee may award Restricted Stock alone or in
conjunction with Performance Shares as described in
paragraph f. below. The Committee shall further
determine the number of shares of Restricted Stock to
be awarded.
ii. Restricted Stock may be subject to such terms and
conditions as the Committee may determine which may
include, without limitation, a provision that the
Restricted Stock will be forfeited unless the
recipient remains in the employ of the Corporation or
an Affiliate for a minimum period of time, or a
provision that the Restricted Stock will be forfeited
unless the Corporation or an Affiliate achieves
specified earnings, sales or other performance-based
goals. In addition, the Committee may condition the
grant of Restricted Stock on the agreement of the
recipient to make an election to disregard the risk of
forfeiture of the Restricted Stock pursuant to Section
83(b) of the Internal Revenue Code of 1986, as
amended. The period during which any Restricted Stock
remains subject to forfeiture shall be determined by
the Committee but shall not be less than one (1) year
nor more than ten (10) years. Upon the satisfaction of
any vesting requirement specified in the grant of the
Restricted Stock, such Restricted Stock will cease to
be Restricted Stock and, other than restrictions, if
any, imposed by federal or state securities or similar
laws, shall be freely transferable by the owner.
iii. Restricted Stock may not be sold, transferred or
otherwise disposed of, pledged, or otherwise
encumbered.
iv. In the event a recipient of Restricted Stock is an
employee whose employment is terminated for any reason
except death, retirement or permanent disability, any
Restricted Stock he or she holds shall be delivered to
the Corporation without compensation and on such other
terms identified in the restricted stock grant within
30 days following such termination and shall be deemed
void for all corporate purposes.
v. Upon the occurrence of the earlier of the death,
retirement, or permanent disability of the recipient
of a Restricted Stock Award, the restrictions against
disposition of shares as to which such restrictions
have not otherwise lapsed shall immediately lapse.
vi. In addition to the terms provided in paragraph e.ii.
above, the Committee may, in its discretion, provide
that any forfeitable Restricted Stock shall become
nonforfeitable upon the acquisition of a significant
portion of the assets or upon any significant change
of ownership of the Corporation.
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vii. Certificates issued in respect of Restricted Stock
granted under the Plan shall be registered in the name
of the recipient but shall bear the following legend:
"The transferability of this certificate
and the shares of stock represented
hereby is restricted and the shares are
subject to the further terms and
conditions contained in the
Activeworlds.com, Inc. 1999 Long-Term
Incentive Plan. Copies of said plan are
on file in the office of the Treasurer of
Activeworlds.com, Inc. at its offices in
Newburyport, Massachusetts."
viii. In order to enforce the restrictions, terms and
conditions on Restricted Stock, each recipient thereof
shall, immediately upon receipt of a certificate or
certificates representing such shares, deposit such
certificates, together with stock powers and other
instructions of transfer as the Committee may require,
appropriately endorsed in blank, with the Corporation
as escrow agent under an escrow agreement in such form
as shall be determined by the Committee.
f. Performance Shares. Performance Shares are rights to payment in
cash of an amount equal to the Fair Market Value of the
Corporation's Common Stock on the date the restrictions lapse on an
accompanying Restricted Stock Award. The Committee may grant
Performance Shares to a recipient of Restricted Stock either at the
time of the award of the Restricted Stock or subsequently by
amendment of such award. Any number of Performance Shares, up to an
amount equal the number of shares of the accompanying Restricted
Stock Award, may be granted by the Committee.
g. Special Rules for Awards to Covered Employees. The Committee may,
in its sole discretion, grant to any Covered Employee (as defined
below) any Stock Option for which the exercise price of a share of
the stock for which such option is granted is equal to or greater
than the Fair Market Value of a share of such stock on the date
such Stock Option is granted with the intent that such award
qualifies as "performance-based compensation" under Section 162(m)
of the Code, or any successor provision thereto (a "162(m) Award").
In the event the Corporation is a "publicly held corporation" as
defined in Section 162 (m) (2) of the Code, awards to Covered
Employees (as defined below) shall be made only in compliance with
that intent and with all of the following conditions:
i. Only the Committee shall have authority to make 162(m)
Awards to Covered Employees;
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ii. No more than One Thousand (1,000) shares of the
Corporation's Common Stock shall be included in 162(m)
Awards made to any Covered Employee in any calendar
year;
iii. In connection with his or her initial employment, an
employee may be granted options to purchase up to an
additional One Hundred (100) shares, which shall not
count against the limit set forth in subsection ii.
above;
iv. The foregoing limitations shall be adjusted
proportionately in connection with any change in the
Corporation's capitalization as described in Section
V;
v. If an option granted in connection with a 162(m) Award
is canceled in the same fiscal year of the Corporation
in which it was granted (other than in connection with
a transaction described in Article 6(g)), the canceled
option shall be counted against the limits set forth
in subsections (ii) and (iii) above. For this purpose,
if the exercise price of an option is reduced, the
transaction will be treated as a cancellation of the
option and the grant of a new option;
vi. Amounts earned in connection with 162(m) Awards shall
be based upon the attainment of performance objectives
established by the Committee in accordance with
Section 162(m). Such performance objectives may vary
by optionee and by award and shall be based upon the
attainment of specific amounts of, or changes in one
or more of the following: Fair Market Value of the
Corporation's common stock, revenues, earnings,
shareholders' equity, return on equity, assets, return
on assets, capital, return on capital, book value,
economic value added, operating margins, cash flow,
shareholder return, expenses or market share. The
Committee may provide that in measuring the
achievement of the performance objectives, a 162(m)
Award may include or exclude items such as realized
investment gains and losses, extraordinary, unusual or
non-recurring items, asset write-downs, effects of
accounting charges, currency fluctuations,
acquisitions, divestitures, reserve-strengthening and
other non-operating items; and
vii. For the purposes of this Plan, the term "Covered
Employee" is defined in Section 162(m)(3) of the Code
and generally includes (a) the Corporation's Chief
Executive Officer who is serving on the last day of
the taxable year (the "CEO") and (b) the four (4) most
highly compensated employees of the Corporation other
than the CEO whose compensation is required to be
reported to the Corporation's shareholders under the
Securities Exchange Act of 1934.
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Section IV. Miscellaneous Provisions.
1. Rights of Recipients of Awards. The holder of Stock Appreciation Rights
or any Stock Option granted under this Plan shall have no rights as a
stockholder of the Corporation with respect thereto unless and until
certificates for shares are issued. The holder of a Restricted Stock
Award will be entitled to receive any dividends on such shares in the
same amount and at the same time as they are declared on shares of
Common Stock of the Corporation and shall be entitled to vote such
shares as a stockholder of record.
a. Assignment of Options and Stock Appreciation Rights. No stock
Option or Stock Appreciation Right or any rights or interests
of the recipient therein shall be assignable or transferable
by such recipient except by will or the laws of descent and
distribution. During the lifetime of the recipient, such Stock
Option or Stock Appreciation Right shall be exercisable only
by, or payable only to, the recipient thereof.
b. Further Agreements. All Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, and Performance Share Awards
granted under this Plan shall be evidenced by agreements in
such form and containing such terms and conditions (which must
be consistent with this Plan) as the Committee may require.
c. Replacement Options and Stock. Upon cancellation of an
outstanding Stock Option or the forfeiture of Restricted
Stock, replacement Stock Options or replacement Restricted
Stock may be issued in an amount and with such terms as the
Committee may determine.
d. Legal and Other Requirements. No shares of Common Stock shall
be issued or transferred upon exercise of any award under the
Plan unless and until all legal requirements applicable to the
issuance or transfer of such shares and such other
requirements as are consistent with the Plan have been
complied with to the satisfaction of the Committee. The
Committee may require that, prior to the issuance or transfer
of Common Stock hereunder, the recipient thereof shall enter
into a written agreement to comply with any restrictions on
subsequent disposition that the Committee or the Corporation
deem necessary or advisable under any applicable law,
regulation or official interpretation thereof. Certificates of
stock issued hereunder may be legended to reflect such
restrictions.
e. Withholding of Taxes. Pursuant to applicable Federal, state,
local, or foreign laws, the Corporation may be required to
collect income or other taxes upon the grant of certain
awards, the exercise of an option, or Stock Appreciation
Right, or the lapse of restrictions on a Restricted Stock
Award. The Corporation may deduct applicable taxes from
payments made under the Plan, or require, as a condition to
such award, or to the exercise of an option or Stock
Appreciation Right, that the recipient pay the Corporation, at
such time as the Committee or the
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Corporation determines, the amount of any taxes which the
Committee or the Corporation, in their discretion, determines
are required to be withheld.
f. Right to Awards. No employee of the Corporation or other
person shall have any claim or right to be a Participant in
this Plan or to be granted an award hereunder. Neither this
Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ
of the Corporation. Nothing contained hereunder shall be
construed as giving any Participant or any other person any
equity or interest of any kind in any assets of the
Corporation or creating a trust of any kind or a fiduciary
relationship of any kind between the Corporation and any such
person. As to any claim for any unpaid amounts under the Plan,
any Participant or any other person having a claim for
payments shall be an unsecured creditor.
g. Fair Market Value The "Fair Market Value" of Common Stock
shall be (x) if the Common Stock of the Corporation is listed
on a national stock exchange or traded in the over-the-counter
market, the closing price reported on the day immediately
preceding the date of grant, (y) if the Common Stock is not
listed on a national stock exchange or traded in the
over-the-counter market but a private sale of Common Stock has
taken place within the 60 days preceding a grant or award, the
sales price per share in such private sale, unless the Board
of Directors determines in good faith that such price does not
accurately reflect the value of the Common Stock or (z) in any
other case, the value determined by the Board of Directors in
good faith.
h. Permanent Disability. A Participant shall be deemed to have a
"Permanent Disability" if, for physical or mental reasons, the
Participant is prevented from performing the Participant's
duties for 60 consecutive days, or 120 days during any
twelve-month period. A Permanent Disability shall be
determined by the Board of Directors in consultation with a
medical doctor selected by it. The Participant shall submit to
a reasonable number of examinations by the medical doctor
making the determination of Disability, and the Participant
shall authorize the disclosure and release to the Corporation
of such determination and all supporting medical records. If
the Participant is not legally competent, the Participant's
legal guardian or duly authorized attorney-in-fact shall act
in the Participant's stead for the purposes of submitting the
Participant to the examinations, and providing the
authorization of disclosure, required hereunder.
i. Retirement. "Retirement" shall mean any date on which an
employee terminates employment with the Corporation on or
after attaining age 62.
j. Indemnity. Neither the Board of Directors nor the Committee,
nor any members of either, nor any employees of the
Corporation or any Affiliate, shall be liable for any act,
omission, interpretation, construction or determination made
in good faith
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in connection with their responsibilities with respect to the
Plan. The Corporation hereby agrees to indemnify the members
of the Board of Directors, the members of the Committee, and
the employees of the Corporation and its subsidiaries with
respect to any claim, loss, damage, or expense (including
counsel fees) arising from any such act, omission,
interpretation, construction or determination to the full
extent permitted by law.
2. Affiliate. For the purposes of this Plan, the term "Affiliate" means,
with respect to a specified Person, any Person that directly or
indirectly controls, is controlled by, or is under common control with,
the specified Person. As used in this definition, the term "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise. The
term "Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization. An entity
which is included with the "affiliated group" of the Corporation as
defined by Section 1504 of the Code, or an entity which is consolidated
with the Corporation for financial reporting purposes, shall in any
case be considered an "Affiliate" as defined herein.
Section V. Amendment and Termination; Adjustments Upon Changes in Stock. The
Board of Directors of the Corporation may at any time, and from time to time,
amend, suspend or terminate the Plan in whole or in part; provided, however,
that the Board of Directors may not materially increase the benefits accruing to
participants under the Plan, increase the number of shares of Common Stock
reserved for purposes of the Plan, or materially modify the requirements as to
eligibility for participation in the Plan without further approval by the
affirmative vote of at least a majority of the holders of the outstanding shares
of Common Stock. Except as provided herein, no amendment, suspension or
termination of the Plan may affect the rights of a participant to whom an award
has been granted without such participant's consent. In the event of any merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the Corporation's corporate structure, appropriate adjustments
may be made by the Committee or by the Board of Directors of the Corporation
(or, if the Corporation is not the surviving corporation in any such
transaction, by the Board of Directors of the surviving corporation) in the
aggregate number of shares available for award under the Plan, and in the
aggregate number and kind of shares and the price per share subject to
outstanding Stock Options, Stock Appreciation Rights, Restricted Stock Awards or
Performance Share Awards.
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Section VI. Shares of Stock Available. The aggregate number of Stock Options
and Restricted Stock Awards under the Plan is One Million (1,000,000) shares of
the capital stock of the Corporation on a fully-diluted basis, assuming full
exercise of all options and conversion of all convertible shares.(1) The total
number of Stock Options and Restricted Stock Awards which may be issued
hereunder will be reduced (i) upon the exercise of an option, by the number of
shares for which such option is exercised; (ii) upon the exercise of a Stock
Appreciation Right, by the number of shares covered by the option canceled upon
such exercise; and (iii) by the number of shares which are released due to the
lapse of restrictions in case of a Restricted Stock Award. The grant and payment
of Performance Shares shall not affect the number of shares of Common Stock
subject to the Plan. Any shares subject to an option hereunder that for any
reason is canceled (other than because of the exercise of an attached Stock
Appreciation Right) or expires unexercised or shares reacquired because
restrictions do not lapse on Restricted Stock Awards will be available for
further awards. Shares of Common Stock to be delivered under the Plan may be
authorized, but unissued shares or shares reacquired on the open market.
Section VII. Effective Date and Term of the Plan. Subject to shareholder
approval, the effective date of the Plan is January 21, 1999, and awards under
the Plan may be made for a period of ten (10) years commencing on such date. The
period during which an option or other award may be exercised may extend beyond
that time as provided herein.
This Plan was adopted by the directors of the Corporation by written
consent on May 24, 2000.
Richard F. Noll, President
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(1) The aggregate number of Stock Options and Restricted Stock Awards under the
Plan was reduced from one million (1,000,000) shares of the capital stock of the
Corporation on a fully-diluted basis to six hundred and sixty-six thousand and
six hundred and sixty-seven (666,667) shares pursuant to the two-for-three
reverse stock split effective April 8, 2000. The aggregate number of Stock
Options and Restricted Stock Awards under the Plan is increased to one million
six hundred sixty six thousand and six hundred sixty seven (1,666,667) shares of
the capital stock of the Corporation on a fully-diluted basis, assuming full
exercise of all options and conversion of all convertible shares.
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