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EXHIBIT 4.1
AETHER SYSTEMS, INC.
ACQUISITIONS INCENTIVE PLAN
Effective as of December 15, 2000
PURPOSE Aether Systems, Inc., a Delaware corporation (the
"Company"), wishes to recruit, reward, and retain
employees and other service providers. To further these
objectives, particularly with respect to acquired
companies, the Company hereby sets forth the Aether
Systems, Inc. Acquisitions Incentive Plan (the "Plan"),
effective as of December 15, 2000 (the "Effective Date")
to provide options ("Options") or direct grants ("Stock
Grants" and, together with the Options, "Awards") to
employees and other service providers of the Company and
its Related Companies with respect to shares of the
Company's common stock (the "Common Stock").
PARTICIPANTS All Employees (except directors and Officers of the
Company and any Eligible Affiliates) are eligible for
Awards under this Plan. Eligible Employees become
"optionees" when the Administrator grants them an option
under this Plan or "recipients" when they receive a Stock
Grant. (Optionees and recipients are together referred to
as "participants.") The Administrator may also grant
Awards to consultants and certain other service providers.
The term participant also includes, where appropriate, a
person authorized to exercise or retain an Award in place
of the original recipient.
Employee means any person employed as a common law
employee of the Company or a Related Company.
Officer means any person who would be treated as an
executive officer for purposes of securities reporting.
ADMINISTRATOR The Administrator will be the Compensation Committee of
the Board of Directors, unless the Board either specifies
another committee of the Board or acts under the Plan as
though it were the Compensation Committee.
The Administrator is responsible for the general operation
and administration of the Plan and for carrying out its
provisions and has full discretion in interpreting and
administering the provisions of the Plan. Subject to the
express provisions of the Plan, the Administrator may
exercise such powers and authority of the
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Board as the Administrator may find necessary or
appropriate to carry out its functions. The Administrator
may delegate its functions (other than those described in
the GRANTING OF AWARDS section) to officers or other
Employees of the Company.
The Administrator's powers will include, but not be
limited to, the power to amend, waive, or extend any
provision or limitation of any Option. The Administrator
may act through meetings of a majority of its members or
by unanimous consent.
The Administrator may also make Stock Grants (with any or
no restrictions) as a bonus or other incentive or to grant
such stock or other awards in lieu of Company obligations
to pay cash under other plans or compensatory
arrangements, including any deferred compensation plans or
as a replacement for other awards.
GRANTING OF Subject to the terms of the Plan, the Administrator will,
AWARDS in its sole discretion, determine
the participants who receive Awards,
the terms of such Awards,
the schedule for exercisability or
nonforfeitability (including any requirements that
the participant or the Company satisfy performance
criteria),
the time and conditions for expiration of the
Awards, and
the form of payment due upon exercise, if any.
The Administrator's determinations under the Plan need not
be uniform and need not consider whether possible
participants are similarly situated.
All Options newly granted to Employees must be
nonqualified stock options ("NQSOs"). If the Company
wishes to award "incentive stock options" ("ISOs") within
the meaning of Section 422 of the Internal Revenue Code of
1986 (the "Code"), or the corresponding provision of any
subsequently enacted tax statute, the shareholders must
approve making such awards, except as provided under
Substitutions.
The Administrator may impose such conditions on or charge
such price for the Stock Grants as it considers
appropriate.
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Substitutions The Administrator may also grant Awards in
substitution for options or other equity interests
held by individuals who become Employees of the
Company or of a Related Company as a result of the
Company's or Related Company's acquiring or merging
with the individual's employer or acquiring its
assets. In addition, the Administrator may provide
for the Plan's assumption of awards granted outside
the Plan to persons who would have been eligible
under the terms of the Plan to receive an Award,
including both persons who provided services to any
acquired company or business and persons who
provided services to the Company or any Related
Company. If appropriate to conform the Awards to
the interests for which they are substitutes, the
Administrator may grant substitute Awards under
terms and conditions (including Exercise Price)
that vary from those the Plan otherwise requires
and may grant ISOs to replace ISOs that were
approved by the acquired company's shareholders.
DATE OF GRANT The Date of Grant will be the date the Administrator
grants an Award to a person, as specified in the Plan or
in the Administrator's minutes or other written evidence
of action.
EXERCISE PRICE The Exercise Price is the value of the consideration that
a participant must provide in exchange for one share of
Common Stock. The Administrator will determine the
Exercise Price under each Award and may set the Exercise
Price without regard to the Exercise Price of any other
Awards granted at the same or any other time. The Company
may use the consideration it receives from the participant
for general corporate purposes.
The Exercise Price per share for NQSOs may not be less
than 85% of the Fair Market Value of a share on the Date
of Grant.
The Administrator may satisfy any state law requirements
regarding adequate consideration for Restricted Stock
Grants by (i) issuing Common Stock held as treasury stock
or (ii) charging the recipients at least the par value for
the shares covered by the Restricted Stock Grant. The
Administrator may designate that a recipient may satisfy
(ii) either by direct payments or by the Administrator's
withholding from other payments due to the recipient.
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FAIR MARKET Fair Market Value (on the date of Grant) of a share
VALUE of Common Stock for purposes of the Plan will be
determined as follows:
if the Common Stock trades on a national
securities exchange, the closing sale price
on that date;
if the Common Stock does not trade on any
such exchange, the closing sale price as
reported by the National Association of
Securities Dealers, Inc. Automated Quotation
System ("Nasdaq") for such date;
if no such closing sale price information is
available, the average of the closing bid
and asked prices that Nasdaq reports for
such date;
if there are no such closing bid and asked
prices, the average of the closing bid and
asked prices as reported by any other
commercial service for such date; or
if the Company has no publicly-traded stock,
the Administrator will determine the Fair
Market Value for purposes of the Plan using
any measure of value it determines in good
faith to be appropriate;
For any date that is not a trading day, the Fair
Market Value of a share of Common Stock for such
date will be determined by using the closing sale
price or the average of the closing bid and asked
prices, as appropriate, for the immediately
preceding trading day. The Administrator can
substitute a particular time of day or other
measure of "closing sale price" or "bid and asked
prices" if appropriate because of changes in
exchange or market procedures.
The Administrator has sole discretion to determine
the Fair Market Value for purposes of this Plan,
and all Awards are conditioned on the participants'
agreement that the Administrator's determination is
conclusive and binding even though others might
make a different and also reasonable determination.
EXERCISABILITY The Administrator will determine the times and conditions
for exercise or retention of each Award.
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Awards will become exercisable or nonforfeitable at such
times and in such manner as the Administrator determines
and the Award Agreement, if any, indicates; provided,
however, that the Administrator may, on such terms and
conditions as it determines appropriate, accelerate the
time at which the participant may exercise any portion of
an Award or at which restrictions on Stock Grants lapse.
For Stock Grants, "exercise" refers to acceptance of the
Award or lapse of restrictions, as appropriate in context.
If the Administrator does not specify otherwise, Options
will become exercisable and restrictions on Stock Grants
will lapse as to 25% per year on each anniversary of the
Date of Grant, so long as the participant remains employed
or continues his relationship as a service provider, and
will expire as of the tenth anniversary of the Date of
Grant (unless they expire earlier under the Plan or the
Award Agreement). The Administrator has the sole
discretion to determine that a change in service-providing
relationship eliminates any further service credit on the
exercise schedule.
No portion of an Award that is unexercisable at a
participant's termination of service-providing
relationship (for any reason) will thereafter become
exercisable (and the participant will immediately forfeit
any unexercisable portions at his termination of
service-providing relationship), unless the Award
Agreement provides otherwise, either initially or by
amendment.
CHANGE OF Upon a Change of Control (as defined below), Awards will
CONTROL only become fully exercisable if the Award Agreement
provides for such acceleration. Any Awards granted to a
participant in replacement of other awards not under this
Plan will not become fully exercisable upon a Change of
Control unless the plan under which the awards were
originally granted specifically provided for such
acceleration or unless the Administrator provided for such
acceleration in replacing the awards. A Change of Control
for this purpose means the occurrence of any one or more
of the following events:
(i) sale of all or substantially all of the
assets of the Company to one or more
individuals, entities, or groups (other than
an Excluded Owner);
(ii) complete or substantially complete
dissolution or liquidation of the Company;
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(iii) a person, entity, or group (other than
an Excluded Owner) acquires or attains
ownership of at least 80% of the undiluted
total voting power of the Company's
then-outstanding securities eligible to vote
to elect members of the Board ("Company
Voting Securities");
(iv) completion of a merger or consolidation
of the Company with or into any other entity
(other than an Excluded Owner) unless the
holders of the Company Voting Securities
outstanding immediately before such
completion, together with any trustee or
other fiduciary holding securities under a
Company benefit plan, retain control because
they hold securities that represent
immediately after such merger or
consolidation more than 20% of the combined
voting power of the then outstanding voting
securities of either the Company or the
other surviving entity or its ultimate
parent
(v) the individuals who constitute the Board
immediately before a proxy contest cease to
constitute at least a majority of the Board
(excluding any Board seat that is vacant or
otherwise unoccupied) immediately following
the proxy contest; or
(vi) during any two year period, the
individuals who constitute the Board at the
beginning of the period (the "Incumbent
Directors") cease for any reason to
constitute at least a majority of the Board
(excluding any Board seat that is vacant or
otherwise unoccupied), provided that any
individuals that a majority of Incumbent
Directors approve for service on the Board
are treated as Incumbent Directors.
An "Excluded Owner" consists of the Company, any
Related Company, any Company benefit plan, or any
underwriter temporarily holding securities for an
offering of such securities.
Even if other tests are met, a Change of Control
has not occurred under any circumstance in which
the Company files for bankruptcy protection or is
reorganized following a
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bankruptcy filing. The Administrator may determine
that a particular participant's Awards will not
become fully exercisable as a result of what the
Administrator, in its sole discretion, determines
is the participant's insufficient cooperation with
the Company with respect to a Change of Control. In
addition, the acceleration will not occur if it
would prevent use of "pooling of interest"
accounting for a reorganization, merger, or
consolidation of the Company that the Board
approves.
The Administrator may allow conditional exercises
in advance of the completion of a Change of Control
that are then rescinded if no Change of Control
occurs. The Administrator may also provide that the
accelerations under the Change of Control occur
automatically up to six months after the Change of
Control.
SUBSTANTIAL Upon a Change of Control that is also a Substantial
CORPORATE Corporate Change, the Awards will become
CHANGE exercisable only as provided under the Change of
Control section and the Plan and any unexercised
Awards will TERMINATE (after the occurrence of one
of the alternatives set forth in the next full
paragraph) unless either (i) such termination would
prevent use of "pooling of interest" accounting for
a reorganization, merger, or consolidation of the
Company that the Board approves, (ii) an agreement
with a participant provides otherwise, or (iii)
provision is made in writing in connection with
such transaction for
the assumption or continuation of
outstanding Awards, or
the substitution for such options or grants
of any options or grants covering the stock
or securities of a successor employer
entity, or a parent or subsidiary of such
successor, with appropriate adjustments as
to the number and kind of shares of stock
and prices, in which event the Awards will
continue in the manner and under the terms
so provided.
If an Option would otherwise terminate under the
preceding sentence and the Administrator considers
that the Fair Market Value of the Common Stock as a
result of the Substantial Corporate Change exceeds
or is likely to exceed
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the Exercise Price, the Administrator will either
provide that
optionees will have the right, at such time
before the completion of the transaction
causing such termination as the Board or the
Administrator reasonably designates, to
exercise any unexercised portions of the
Option, including those portions that the
Change of Control will make exercisable, or
cause the Company, or agree to allow the
successor, to cancel each Option after
payment to the optionee of an amount in
cash, cash equivalents, or successor equity
interests substantially equal to the Fair
Market Value under the transaction minus the
Exercise Price for the shares covered by the
Option (and, where the Board or the
Administrator determines it is appropriate,
any required tax withholdings).
The Administrator may allow conditional exercises
in advance of the completion of a Substantial
Corporate Change that are then rescinded if no
Substantial Corporate Change occurs.
The Board or other Administrator may take any
actions described in the Substantial Corporate
Changes section, without any requirement to seek
optionee consent.
A Substantial Corporate Change means any of the
following events:
a sale as described in clause (i) under
CHANGE OF CONTROL,
a dissolution or liquidation as described in
clause (ii),
an ownership change as described in clause
(iii), but with the percentage ownership
increased to 100%
merger, consolidation, or reorganization of
the Company with or into one or more
corporations or other entities in which the
Company is not the surviving entity, other
than a transaction intended primarily to
change the Company's state of
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incorporation or that satisfies clause (iv)
under Change of Control, or
any other transaction (including a merger or
reorganization in which the Company
survives) approved by the Board that results
in any person or entity (other than an
Excluded Owner) owning 100% of Company
Voting Securities.
LIMITATION ON An Option granted to an Employee as an ISO will be an ISO
ISOs only to the extent that the aggregate Fair Market Value
(determined at the Date of Grant) of the stock with
respect to which ISOs are exercisable for the first time
by the optionee during any calendar year (under the Plan
and all other plans of the Company and its subsidiary
corporations, within the meaning of Code Section 422(d)),
does not exceed $100,000. This limitation applies to
Options in the order in which such Options were granted.
If, by design or operation, the Option exceeds this limit,
the excess will be treated as an NQSO.
METHOD OF To exercise any exercisable portion of an Option, the
EXERCISE optionee must:
Deliver notice of exercise to the Secretary of the
Company (or to whomever the Administrator
designates), in a form complying with any rules the
Administrator may issue, signed or otherwise
authenticated by the optionee, and specifying the
number of shares of Common Stock underlying the
portion of the Option the optionee is exercising;
Pay the full Exercise Price by cash or a cashier's
or certified check for the shares of Common Stock
with respect to which the Option is being
exercised, unless the Administrator consents to
another form of payment (which could include loans
from the Company or the use of Common Stock); and
Deliver to the Administrator such representations
and documents as the Administrator, in its sole
discretion, may consider necessary or advisable.
Payment in full of the Exercise Price need not accompany
the written notice of exercise if the exercise complies
with a previously-approved cashless exercise method,
including, for example, that the notice directs that the
stock certificates (or other indicia of ownership) for the
shares issued upon the exercise be
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delivered to a licensed broker acceptable to the Company
as the agent for the individual exercising the Option and
at the time the stock certificates (or other indicia) are
delivered to the broker, the broker will tender to the
Company cash or cash equivalents acceptable to the Company
and equal to the Exercise Price and any required
withholding taxes.
If the Administrator agrees to allow an optionee to pay
through tendering shares of Common Stock to the Company,
the individual can only tender stock he has held for at
least six months at the time of surrender. Shares of stock
offered as payment will be valued, for purposes of
determining the extent to which the optionee has paid the
Exercise Price, at their Fair Market Value on the date of
exercise. The Administrator may also, in its discretion,
accept attestation of ownership of Common Stock and issue
a net number of shares upon Option exercise, or have a
broker tender to the Company cash equal to the exercise
price and any withholding taxes.
AWARD No one may exercise an Option more than ten years after
EXPIRATION its Date of Grant. A participant will immediately forfeit
and can never exercise or retain any portion of an Award
that is unexercisable or nonforfeitable at his termination
of service-providing relationship (for any reason), unless
the Award Agreement provides otherwise, either initially
or by amendment. Unless the Award Agreement provides
otherwise, either initially or by amendment, no one may
exercise otherwise exercisable portions of an Option after
the first to occur of:
EMPLOYMENT The 90th day after the date of termination of
TERMINATION service-providing relationship (other than for
death or Disability), where termination of
service-providing relationship means the time when
the employer-employee or other service-providing
relationship between the individual and the Company
(and all Related Companies) ends for any reason.
The Administrator may provide that Options
terminate immediately upon termination of
service-providing relationship for "cause" under an
employee's employment or consultant's services
agreement or under another definition specified in
the Award Agreement. Unless the Award Agreement or
the Administrator provides otherwise, termination
of employment does not include instances in which
the Company immediately rehires a common law
employee as an independent contractor. The
Administrator, in its sole discretion, will
determine all questions of whether particular
terminations or leaves of
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absence are terminations of employment and may
decide to suspend the exercise or forfeiture
schedule during a leave rather than to terminate
the Award Unless the Award Agreement or the
Administrator provides otherwise, terminations of
service-providing relationship include situations
in which the optionee's employer ceases to be
related to the Company closely enough to be a
Related Company for new grants.
GROSS MISCONDUCT For the Company's termination of the participant's
service-providing relationship as a result of the
participant's Gross Misconduct, the time of such
termination. For purposes of this Plan, "Gross
Misconduct" means the participant has
committed fraud, misappropriation,
embezzlement, or willful misconduct that has
resulted or is likely to result in material
harm to the Company or a Related Company;
committed or been indicted for or convicted
of, or pled guilty or no contest to, any
misdemeanor (other than for minor
infractions or traffic violations) involving
fraud, breach of trust, misappropriation, or
other similar activity or otherwise relating
to the Company or any Related Company, or
any felony; or
committed an act of gross negligence or
otherwise acted with willful disregard for
the Company's or a Related Company's best
interests in a manner that has resulted or
is likely to result in material harm to the
Company or a Related Company.
If the participant has a written employment or
other agreement in effect at the time of his
termination that specifies "cause" for termination,
"Gross Misconduct" for purposes of his termination
will refer to "cause" under the employment or other
agreement, rather than to the foregoing definition.
DISABILITY For disability, the earlier of (i) the first
anniversary of the participant's termination of
employment for disability and (ii) 60 days after
the participant no longer has a disability, where
"disability" means the inability to engage in any
substantial gainful activity because of any
medically determinable physical or mental
impairment that can be expected to result in death
or that has lasted or can be
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expected to last for a continuous period of not
less than 12 months; or
DEATH The date 12 months after the participant's death.
If exercise is permitted after termination of
service-providing relationship, the Award will
nevertheless expire as of the date that the former service
provider violates any covenant not to compete or other
post-employment covenant in effect between the Company or
a Related Company and the former employee or other service
provider. In addition, an optionee who exercises an Option
more than 90 days after termination of employment with the
Company and/or Eligible Affiliates will only receive ISO
treatment to the extent the law permits, and becoming or
remaining an employee of another related company (that is
not an Eligible Affiliate) or an independent contractor
will not prevent loss of ISO status because of the formal
termination of employment.
Nothing in this Plan extends the term of an Option beyond
the tenth anniversary of its Date of Grant, nor does
anything in this AWARD EXPIRATION section make an Option
exercisable or Stock Grant nonforfeitable that has not
otherwise become exercisable or nonforfeitable, unless the
Administrator specifies otherwise.
AWARD Award Agreements (which could be certificates) will set
AGREEMENT forth the terms of each Award and will include such terms
and conditions, consistent with the Plan, as the
Administrator may determine are necessary or advisable. To
the extent the agreement is inconsistent with the Plan,
the Plan will govern. The Award Agreements may contain
special rules.
PUT AND CALL The Administrator may provide in Award Agreements or other
RIGHTS agreements that the Company has the right (or obligation)
to purchase outstanding Awards, or the shares received
from exercising an Option, under certain circumstances,
including termination of service-providing relationship
for any reason or death and may provide for rights of
first refusal. The Administrator may distinguish between
unexercisable and exercisable Awards.
STOCK SUBJECT Except as adjusted below under CORPORATE CHANGES, the
TO PLAN aggregate number of shares of Common Stock that may be
issued in Awards may not exceed 1,900,000 shares, and the
maximum number of ISOs that may be issued may not exceed
the number approved by the shareholders of the Company (or
by an acquired company's shareholders for ISOs assumed by
this Plan). Shares used as payment for the Exercise Price
or any required
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withholdings will be added back to the totals available
for issuance.
The Common Stock will come from either authorized but
unissued shares or from previously issued shares that the
Company reacquires, including shares it purchases on the
open market or holds as treasury shares. If any Award
expires, is canceled, or terminates for any other reason,
the shares of Common Stock available under that Award will
again be available for the granting of new Awards.
No adjustment will be made for a dividend or other right
for which the record date precedes the date of exercise.
The optionee will have no rights of a stockholder with
respect to the shares of stock subject to an Option except
to the extent that the Company has issued certificates
for, or otherwise confirmed ownership of, such shares upon
the exercise of the Option.
The Company will not issue fractional shares pursuant to
the exercise of an Option, unless the Administrator
determines otherwise, but the Administrator may, in its
discretion, direct the Company to make a cash payment in
lieu of fractional shares.
PERSON WHO During the participant's lifetime and except as provided
MAY EXERCISE under TRANSFERS, ASSIGNMENTS, AND PLEDGES, only the
participant or his duly appointed guardian or personal
representative may exercise the Options or hold the
forfeitable Stock Grants. After his death, his personal
representative or any other person authorized under a will
or under the laws of descent and distribution may exercise
any then exercisable portion of an Option. If someone
other than the original recipient seeks to exercise any
portion of an Option, the Administrator may request such
proof as it may consider necessary or appropriate of the
person's right to exercise the Option.
ADJUSTMENTS Subject to any required action by the Company (which it
UPON CHANGES agrees to promptly take) or its stockholders, and subject
IN CAPITAL to the provisions of applicable corporate law, if, after
STOCK the Date of Grant of an Option,
the outstanding shares of Common Stock increase or
decrease or change into or are exchanged for a
different number or kind of security because of any
recapitalization, reclassification, stock split,
reverse stock split, combination of shares,
exchange of shares, stock dividend, or other
distribution payable in capital stock, or
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some other increase or decrease in such Common
Stock occurs without the Company's receiving
consideration (excluding, unless the Administrator
determines otherwise, stock repurchases),
the Administrator must make a proportionate and
appropriate adjustment in the number of shares of Common
Stock underlying each Option, so that the proportionate
interest of the participant immediately following such
event will, to the extent practicable, be the same as
immediately before such event. (This adjustment does not
apply to Common Stock that the optionee has already
purchased, nor to Stock Grants, each of which are subject
to the adjustment applicable to Common Stock.) Unless the
Administrator determines another method would be
appropriate, any such adjustment to an Option will not
change the total price with respect to shares of Common
Stock underlying the unexercised portion of the Option but
will include a corresponding proportionate adjustment in
the Option's Exercise Price. The Board or other
Administrator may take any actions described in this
section without any requirement to seek optionee consent.
The Administrator will make a commensurate change to the
maximum number and kind of shares provided in the STOCK
SUBJECT TO PLAN section.
Any issue by the Company of any class of preferred stock,
or securities convertible into shares of common or
preferred stock of any class, will not affect, and no
adjustment by reason thereof will be made with respect to,
the number of shares of Common Stock subject to any Award
or the Exercise Price except as this ADJUSTMENTS section
specifically provides. The grant of an Award under the
Plan will not affect in any way the right or power of the
Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business
structure, or to merge or to consolidate, or to dissolve,
liquidate, sell, or transfer all or any part of its
business or assets.
RELATED Employees of Eligible Affiliates will be entitled to
COMPANY participate in the Plan, except as otherwise designated by
EMPLOYEES the Board or the Administrator.
Eligible Affiliate means each of the Related Companies,
except as the Administrator otherwise specifies. For ISO
grants, "Related Company" means any corporation in an
unbroken chain of corporations including the Company if,
at the time an Option is granted to a Participant under
the Plan, each corporation (other
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than the last corporation in the unbroken chain) owns
stock possessing 50% or more of the total combined voting
power of all classes of stock in another corporation in
such chain. Related Company also includes a single-member
limited liability company included within the chain
described in the preceding sentence. The Board or the
Administrator may use a different definition of Related
Company for NQSOs and may include other forms of entity at
the same level of equity relationship (or such other level
as the Board or the Administrator specifies).
LEGAL The Company will not issue any shares of Common Stock
COMPLIANCE under an Award until all applicable requirements imposed
by Federal and state securities and other laws, rules, and
regulations, and by any applicable regulatory agencies or
stock exchanges, have been fully met. To that end, the
Company may require the participant to take any reasonable
action to comply with such requirements before issuing
such shares, including compliance with any Company
black-out periods or trading restrictions. No provision in
the Plan or action taken under it authorizes any action
that Federal or state laws otherwise prohibit.
The Plan is intended to conform to the extent necessary
with all provisions of the Securities Act of 1933
("Securities Act") and the Securities Exchange Act of 1934
and all regulations and rules the Securities and Exchange
Commission issues under those laws. Notwithstanding
anything in the Plan to the contrary, the Administrator
must administer the Plan, and Awards may be granted and
exercised, only in a way that conforms to such laws,
rules, and regulations. To the extent permitted by
applicable law, the Plan and any Awards will be treated as
amended to the extent necessary to conform to such laws,
rules, and regulations.
PURCHASE FOR Unless a registration statement under the Securities Act
INVESTMENT covers the share of Common Stock a participant receives
AND OTHER upon exercising his Award, the Administrator may require,
RESTRICTIONS at the time of such exercise, that the participant agree
in writing to acquire such shares for investment and not
for public resale or distribution, unless and until the
shares subject to the Award are registered under the
Securities Act. Unless the shares are registered under the
Securities Act, the participant must acknowledge:
that the shares purchased on exercise of the Award
are not so registered,
that the participant may not sell or otherwise
transfer the shares unless
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such sale or transfer complies with all
applicable laws, rules, and regulations,
including all applicable Federal and state
securities laws, rules, and regulations, and
either
the shares have been registered under the
Securities Act in connection with the sale
or transfer thereof, or
counsel satisfactory to the Company has
issued an opinion satisfactory to the
Company that the sale or other transfer of
such shares is exempt from registration
under the Securities Act.
Additionally, the Common Stock, when issued upon the
exercise of an Award, will be subject to any other
transfer restrictions, rights of first refusal, and rights
of repurchase set forth in or incorporated by reference
into other applicable documents, including the Award
Agreements, or the Company's articles or certificate of
incorporation, by-laws, or generally applicable
stockholders' agreements.
The Administrator may, in its sole discretion, take
whatever additional actions it deems appropriate to comply
with such restrictions and applicable laws, including
placing legends on certificates and issuing stop- transfer
orders to transfer agents and registrars.
TAX WITHHOLDING The participant must satisfy all applicable Federal,
state, and local income and employment tax withholding
requirements before the Company will deliver stock
certificates or otherwise recognize ownership upon the
exercise of an Award. The Company may decide to satisfy
the withholding obligations through additional withholding
on salary or wages. If the Company does not or cannot
withhold from other compensation, the participant must pay
the Company, with a cashier's check or certified check,
the full amounts, if any, required for withholding.
Payment of withholding obligations is due before the
Company will issue any share on exercise, or, if the
Administrator so requires, at the same time as is payment
of the Exercise Price. If the Administrator so determines,
the participant may instead satisfy the withholding
obligations by directing the Company to retain shares from
the Award exercise, by tendering previously owned shares,
or by attesting to his ownership of shares (with the
distribution of net shares), or by having a broker tender
to the Company cash equal to the withholding taxes.
Without any requirement to seek an optionee's
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<PAGE> 17
consent, the Company may require the optionee to use one
or more specified brokerage firms to exercise and to hold
shares received from Awards until the later of one year
after exercise or two years after the Date of Grant for
Options or the lapse of all forfeiture provisions for
Stock Grants.
TRANSFERS, Unless the Administrator otherwise approves in advance in
ASSIGNMENTS, writing for estate planning or other purposes, an Award
AND PLEDGES may not be assigned, pledged or otherwise transferred in
any way, whether by operation of law or otherwise or
through any legal or equitable proceedings (including
bankruptcy), by the participant to any person, except by
will or by operation of applicable laws of descent and
distribution. If necessary to comply with Rule 16b-3, the
participant may not transfer or pledge shares of Common
Stock acquired upon exercise of an Award until at least
six months have elapsed from (but excluding) the Date of
Grant, unless the Administrator approves otherwise in
advance in writing. The Administrator may, in its
discretion, expressly provide that a participant may
transfer his Award, without receiving consideration, to
(i) members of his immediate family (children,
grandchildren, or spouse), (ii) trusts for the benefit of
such family members, or (iii) partnerships whose only
partners are such family members.
AMENDMENT OR The Board or Compensation Committee may amend, suspend,
TERMINATION or, terminate the Plan at any time without the consent of
OF PLAN AND the participants; or their beneficiaries; provided,
OPTIONS however, that such actions are consistent with this
section. Except as required by law or by the SUBSTANTIAL
CORPORATE CHANGES section, the Administrator may not,
without the participant's or beneficiary's consent, modify
the terms and conditions of an Award so as to materially
adversely affect the participant. No amendment,
suspension, or termination of the Plan will, without the
participant's or beneficiary's consent, terminate or
materially adversely affect any right or obligations under
any outstanding Awards, except as provided in the
SUBSTANTIAL CORPORATE CHANGES Section.
PRIVILEGES OF No participant and no beneficiary or other person claiming
STOCK under or through such optionee will have any right, title,
OWNERSHIP or interest in or to any shares of Common Stock allocated
or reserved under the Plan or subject to any Award except
as to such shares of Common Stock, if any, already issued
to such participant.
EFFECT ON Whether receiving or exercising an Award causes the
participant
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OTHER PLANS to accrue or receive additional benefits under any pension
or other plan is governed solely by the terms of such
other plan.
LIMITATIONS ON Notwithstanding any other provisions of the Plan,
LIABILITY no individual acting as a director, officer, other
employee, or agent of the Company will be liable to any
participant, former participant, spouse, beneficiary, or
any other person for any claim, loss, liability, or
expense incurred in connection with the Plan, nor will
such individual be personally liable because of any
contract or other instrument he executes in such other
capacity. The Company will indemnify and hold harmless
each director, officer, other employee, or agent of the
Company to whom any duty or power relating to the
administration or interpretation of the Plan has been or
will be delegated, against any cost or expense (including
attorneys' fees) or liability (including any sum paid in
settlement of a claim with the Board's approval) arising
out of any act or omission to act concerning this Plan
unless arising out of such person's own fraud or bad
faith.
NO EMPLOYMENT Nothing contained in this Plan constitutes an employment
CONTRACT contract between the Company and the optionees. The Plan
does not give any participant any right to be retained in
the Company's employ, nor does it enlarge or diminish the
Company's right to end the participant's employment or
other relationship with the Company.
APPLICABLE LAW The laws of the State of Delaware (other than its choice
of law provisions) govern this Plan and its
interpretation.
DURATION OF Unless the Board extends the Plan's term, the
PLAN Administrator may not grant Options after December 14,
2010. The Plan will then terminate but will continue to
govern unexercised and unexpired Options.
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