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Exhibit 4.6
divine interVentures, inc.
2000 EMPLOYEE STOCK PURCHASE PLAN
(Adopted as of January 29, 2000)
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divine interVentures, inc.
EMPLOYEE STOCK PURCHASE PLAN
(Adopted as of January 29, 2000)
ARTICLE I
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ESTABLISHMENT AND PURPOSE
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1.1 Purpose. The divine interVentures, inc. 2000 Employee Stock
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Purchase Plan (this "Plan") is hereby established by divine interVentures, inc.
and adopted as of January 29, 2000 (the "Effective Date"), subject to approval
by the stockholders of divine interVentures, inc. within twelve (12) months
after such adoption date. The purpose of this Plan is to promote the overall
financial objectives of the Company and its stockholders by motivating
participants in this Plan to achieve long-term growth in stockholders' equity of
the Company. This Plan is intended as an "employee stock purchase plan" within
the meaning of Section 423 of the Code, and Options granted hereunder are
intended to constitute options granted under such a plan, and this Plan and all
actions taken in connection with this Plan shall be constructed consistently
with such intent.
ARTICLE II
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DEFINITIONS
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The following sections of this Article II provide definitions of terms
used throughout this Plan, and whenever used herein in the capitalized form,
except as otherwise expressly provided, the terms shall be deemed to have the
following meanings:
2.1 "Account" shall mean the bookkeeping account established on
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behalf of a Participant to which shall be credited all contributions paid for
the purpose of purchasing Common Stock under this Plan, and to which shall be
charged all purchases of Common Stock pursuant to this Plan. The Company shall
have custody of such Account.
2.2 "Agreement" or "Option Agreement" means, individually or
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collectively, any enrollment and withholding agreement entered into pursuant to
this Plan. An Agreement shall be the right of the Company to withhold from
payroll amounts to be applied to purchase Common Stock.
2.3 "Board of Directors" or "Board" means the Board of Directors of
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the Company.
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2.4 "Code" or "Internal Revenue Code" means the Internal Revenue Code
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of 1986, as amended, and any subsequent Internal Revenue Code. If there is a
subsequent Internal Revenue Code, any references herein to Internal Revenue Code
sections shall be deemed to refer to comparable sections of any subsequent
Internal Revenue Code.
2.5 "Committee" means the person or persons appointed by the Board of
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Directors to administer this Plan, as further described in this Plan.
2.6 "Common Stock" means the Class A Common Stock, $0.001 par value
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per share, of the Company, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described in Section 6.3.
2.7 "Company" means divine interVentures, inc. and includes any
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successor or assignee corporation or corporations into which the Company may be
merged, changed or consolidated; any corporation for whose securities the
securities of the Company shall be exchanged; and any assignee of, or successor
to, substantially all of the assets of the Company.
2.8 "Continuous Service" shall mean, subject to modification by the
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Committee, an Eligible Employee's number of full years and completed months of
continuous employment with the Company or a Subsidiary from his or her last
hiring date to his or her date of Termination of Employment for any reason. The
Committee may provide rules from time to time regarding the calculation of
Continuous Service and the method for crediting such service.
2.9 "Contribution Rate" means the rate determined under Section 5.5.
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2.10 "Disability" means a mental or physical illness that entitles
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the Participant to receive benefits under the long-term disability plan of the
Company or a Subsidiary, or if the Participant is not covered by such plan, a
mental or physical illness that renders a Participant permanently and totally
incapable of performing his or her duties as an employee of the Company or a
Subsidiary. Notwithstanding the foregoing, a Disability shall not qualify under
this Plan if it is the result of (a) a willfully self-inflicted injury or
willfully self-induced sickness; or (b) an injury or disease contracted,
suffered or incurred while participating in a criminal offense. The
determination of Disability shall be made by the Committee. The determination
of Disability for purposes of this Plan shall not be construed to be an
admission of disability for any other purpose.
2.11 "Eligible Employee" means each employee of the Company or a
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Subsidiary (if the Subsidiary has adopted this Plan) on a Grant Date except that
the Committee in its sole discretion may exclude:
(a) any employee who has accrued less than a minimum period of
Continuous Service established by the Committee (but not to
exceed two (2) years).
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(b) any employee whose customary employment is twenty (20) hours
or less per week;
(c) any employee whose customary employment is for not more than
five (5) months in any calendar year;
(d) any employee who would directly or indirectly own or hold
(applying the rules of Section 424(d) of the Code to
determine stock ownership), immediately following the grant
of an Option hereunder, an aggregate of five percent (5%) or
more of the total combined voting power or value of all
outstanding shares of all classes of stock of the Company or
any Subsidiary; and
(e) any employee who is a highly compensated employee of the
Company or Subsidiary within the meaning of Section 414(q)
of the Code.
Any period of service described in the preceding sentence may be decreased in
the discretion of the Committee.
2.12 "ERISA" means the Employee Retirement Income Security Act of
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1974, as amended, and the rules and regulations promulgated thereunder.
2.13 "Exercise Date" means such one or more dates determined by the
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Committee on which the accumulated value of each Account shall be applied to
purchase Common Stock. The Committee may accelerate an Exercise Date in order
to satisfy the employment period requirement of Section 423(a)(2) of the Code.
Unless otherwise determined by the Committee, the first Exercise Date shall be
the later to occur of a last day of February and a last day of August following
the Underwriting Date, and subsequent Exercise Dates shall be every last day of
February, May, August and November thereafter.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as
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amended, and the rules and regulations promulgated thereunder.
2.15 "Fair Market Value" means the value of Common Stock, determined
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on the basis of the good faith determination of the Committee pursuant to the
applicable method described in Section 4.5 and as adjusted, averaged or
otherwise modified by the Committee.
2.16 "Grant Date" means the date or dates established by the
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Committee on which one or more Options are granted pursuant to this Plan;
provided, however, that, unless otherwise determined by the Committee, the first
Grant Date shall be the Underwriting Date for any person who is a Participant as
of that date. Unless otherwise specified by the Committee, for any person,
subsequent Grant Dates shall be each March 1, June 1, September 1 and December 1
occurring thereafter upon which such person is a Participant. The Committee may
determine for any Plan Period that there shall be no Grant Date, in which case
no Options shall be granted for
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that Plan Period. The terms and conditions of any Option granted on a
particular Grant Date shall be independent of and have no effect on the terms
and conditions of any Option granted on another Grant Date.
2.17 "Option" means the right to purchase Common Stock pursuant to
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this Plan and any Agreement.
2.18 "Option Period" means the period beginning on the Grant Date and
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expiring on the Exercise Date as determined by the Committee, subject to the
limitations of Section 5.3.
2.19 "Option Price" means the price at which the Company's Common
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Stock granted as of a specific Grant Date may be purchased under an Option. The
price shall be subject to the limitation set forth in Section 5.4.
2.20 "Participant" means an Eligible Employee to whom an Option has
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been granted under this Plan, and in the event a Representative is appointed for
a Participant, then the term "Participant" shall mean such appointed
Representative, or successor Representative(s) appointed, as the case may be,
provided that "Termination of Employment" shall mean the Termination of
Employment of the Participant.
2.21 "Plan" means the divine interVentures, inc. 2000 Employee Stock
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Purchase Plan, as herein set forth and as may be amended from time to time.
2.22 "Plan Period" means, for the first Plan Period, the period
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starting on the Underwriting Date and ending on the first anniversary of the
first Exercise Date under this Plan; and for each subsequent Plan Period, the
twenty-four (24) consecutive month period starting immediately after the end of
the preceding Plan Period; provided, however, that the Committee may at any time
in its discretion designate another period as the Plan Period.
2.23 "Representative" means (a) the person or entity acting as the
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executor or administrator of a Participant's estate pursuant to the last will
and testament of the Participant or pursuant to the laws of the jurisdiction in
which the Participant had his or her primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant's estate; or (c) the person or entity which
is the beneficiary of a Participant upon or following the Participant's death.
A Participant may file a written designation of his or her Representative with
the Committee. Such designation of his or her Representative may be changed by
the Participant at any time by written notice given in accordance with rules and
procedures established by the Committee.
2.24 "Retirement" means the Participant's termination of employment
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after attaining age 65, or age 55 with the accrual of 10 years of service.
2.25 "Securities Act" means the Securities Act of 1933, as amended,
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and the rules and regulations promulgated thereunder.
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2.26 "Subsidiary" means any company, as currently defined in Section
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424(f) of the Code. Unless otherwise indicated the term "Company" shall
hereinafter be deemed to include all Subsidiaries of the Company which have
adopted this Plan.
2.27 "Termination of Employment" means the latest date on which a
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person ceases, for whatever reason, to be an employee of the Company. For
determining whether and when a Participant has incurred a Termination of
Employment for cause, "cause" shall mean any act or omission which permits the
Company to terminate the employment agreement or arrangement between the
Participant and the Company for "cause," as defined in such agreement or
arrangement, or in the event there is no such employment agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then "cause" shall mean (a) the conviction of the Participant for committing a
felony under federal law or the law of the state in which such action occurred,
(b) dishonesty in the course of fulfilling the Participant's duties as an
employee of the Company or (c) willful and deliberate failure on the part of the
Participant to perform such duties in any material respect. The determination
of "cause" shall be made by the Committee, in its sole discretion.
2.28 "Underwriting Agreement" means the agreement between the Company
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and the underwriter or underwriters managing the initial public offering of the
Common Stock.
2.29 "Underwriting Date" means the date on which the Underwriting
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Agreement is executed in connection with an initial underwritten public offering
of the Common Stock.
ARTICLE III
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ADMINISTRATION
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3.1 Committee Structure and Authority. This Plan shall be
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administered by the Committee. The Committee shall be comprised of two or more
members of the Board of Directors selected by the Board. A majority of the
Committee shall constitute a quorum at any meeting thereof (including via
telephone conference), and the acts of a majority of the members present, or
acts unanimously approved in writing by the entire Committee without a meeting,
shall be the acts of the Committee. The Board shall have the authority to
remove, replace or fill any vacancy of any member of the Committee upon notice
to the Committee and the affected member. Any member of the Committee may
resign upon notice to the Chairman of the Board of the Company or to the Board.
The Committee may allocate among one or more of its members, or may delegate to
one or more of its agents, such duties and responsibilities as it determines.
Subject to the provisions of this Plan, the Committee shall have full and final
authority in its discretion to:
(a) determine from time to time whether a person is an Eligible
Employee as of any Grant Date;
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(b) determine the Option Price;
(c) determine the number of shares of Common Stock available as
of any Grant Date or subject to any Option;
(d) determine any Grant Date, Exercise Date and Option Period,
and provide for all aspects of payroll deduction, suspension
or withdrawal;
(e) determine, subject to this Plan, the time or times when, and
the manner in which, each Option shall be exercisable and
the duration of each Option Period;
(f) provide for the acceleration of the right to exercise an
Option (or portion thereof);
(g) prescribe additional terms, conditions and restrictions in
any Agreement and provide for the forms of Agreement to be
utilized in connection with this Plan;
(h) determine whether a Participant has incurred a Disability;
(i) determine what securities laws requirements are applicable
to this Plan, Options, and the issuance of shares of Common
Stock hereunder and request of a Participant that
appropriate action be taken;
(j) cancel, with the consent of the holder or as otherwise
provided in this Plan or an Agreement, outstanding Options;
(k) require, as a condition of the exercise of an Option or the
issuance or transfer of a share of Common Stock hereunder,
the withholding from a Participant of the amount of any
federal, state or local taxes as may be necessary in order
for the Company or Subsidiary to obtain a deduction and as
may be otherwise required by law;
(l) determine whether and for what reason an individual has
incurred a Termination of Employment or an authorized leave
of absence;
(m) treat all or any portion of any period during which a
Participant is on an approved leave of absence as a period
of employment for purposes of accrual of the Participant's
rights under an Option;
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(n) determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a
Participant and, if so, the terms and conditions on which
such Common Stock is to be purchased;
(o) determine the restrictions or limitations on the transfer of
Common Stock issued hereunder;
(p) determine whether an Option is to be adjusted, modified or
purchased, or become fully exercisable, under Section 6.3 of
this Plan or the terms of an Agreement;
(q) adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of this
Plan;
(r) appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties;
(s) correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Agreement relating to
an Option, in such manner and to the extent the Committee
shall determine in order to carry out the purposes of this
Plan; and
(t) construe and interpret this Plan and any Agreement, and take
all other actions, make all other determinations and take
all other actions deemed necessary or advisable for the
administration of this Plan.
In the absence of the appointment of a Committee hereunder, the
Compensation Committee of the Board shall be the Committee. A member of the
Committee shall not exercise any discretion respecting himself under this Plan.
ARTICLE IV
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STOCK PROVISIONS
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4.1 Number of Shares Subject to this Plan. The stock subject to the
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Options granted under this Plan shall be the Common Stock. Subject to
adjustment as provided in Section 6.3, the aggregate number of shares of Common
Stock which may be delivered under the Plan shall not exceed 25,000,000
shares.The shares of Common Stock issued with respect to Options under this Plan
may be authorized and unissued shares or shares issued and reacquired by the
Company.
4.2 Release of Shares. If any shares of Common Stock available for
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subscription are unsubscribed, or if any Option granted hereunder shall be
cancelled, forfeited, expire or
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terminate for any reason without having been exercised or realized in full, any
shares of Common Stock subject to subscription or subject to such Option shall
again be available and may thereafter be granted or otherwise applied under this
Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon
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exercise of an Option shall be subject to the terms and conditions specified
herein and to such other terms, conditions and restrictions as the Committee, in
its discretion, may determine or provide in any Agreement. The Company shall
not be required to issue or deliver shares of Common Stock hereunder prior to
(1) the listing of such shares on the Nasdaq National Market or any other stock
exchange or public market on which the Common Stock may then be listed (or
regularly traded), (2) the completion of any registration or qualification of
such shares under federal or state law, or any ruling or regulation of any
governmental body, which the Committee, in its sole discretion, determines to be
necessary or advisable, and (3) the tendering to the Company of such documents
and/or payments as the Committee may deem necessary, including documents the
Committee deems necessary to satisfy any applicable withholding obligation in
order for the Company or another entity to obtain a deduction on its federal,
state or local tax return with respect to the exercise of an Option. The
Company may cause any certificate for any share of Common Stock to be delivered
to be properly marked with a legend or other notation reflecting any limitations
on transfer of such Common Stock as provided in this Plan or as the Committee
may otherwise require. The Company has no obligation to register shares of
Common Stock issued pursuant to this Plan. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.
4.4 Stockholder Rights. No person shall have any rights of a
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stockholder as to shares of Common Stock subject to an Option until, after
proper exercise of the Option or other action required, such shares shall have
been recorded on the Company's official stockholder records as having been
issued or transferred to such person. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date such
shares are recorded as issued or transferred to such person in the Company's
official stockholder records, except as provided in Section 6.3.
4.5 Stock Valuation. If and when the Fair Market Value of Common
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Stock shall be required to be determined, it shall be determined in accordance
with the following provisions by the Committee, as applicable:
(a) As of the Underwriting Date, the Fair Market Value shall be
deemed to be equal to the price per share at which the Common
Stock is sold to the public in the initial public offering of
the Common Stock; and
(b) After the Underwriting Date, the Fair Market Value per share
shall be the closing sales price per share of the Common
Stock on Nasdaq (or the principal stock exchange or market on
which the Common Stock is then traded) on the date as of
which such value is being determined or the last previous day
on which a sale was reported.
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4.6 Custodian. Shares of Common Stock purchased pursuant to this
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Plan may be delivered to, and held in the custody of, such investment or
financial firm as shall be appointed by the Committee. The custodian may hold
in nominee or street name certificates for shares purchased pursuant to this
Plan and may commingle shares in its custody pursuant to this Plan in a single
account without identification as to individual Participants. By appropriate
instructions to the custodian on forms to be provided for the purpose, a
Participant may from time to time obtain (a) transfer into the Participant's own
name, or into the name of the Participant and another individual as joint
tenants with the right of survivorship, of all or part of the whole shares held
by the custodian for the Participant's account and delivery of such shares to
the Participant; (b) transfer of all or part of the whole shares held for the
Participant's account by the custodian to a regular individual brokerage account
in the Participant's own name or in the name of the Participant and another
individual as joint tenants with the right of survivorship, either with the firm
then acting as custodian or with another firm, or (c) sale of all or part of the
whole shares held by the custodian for the Participant's account at the market
price at the time the order is executed and remittance of the net proceeds of
the sale to the Participant. Upon termination of participation in this Plan,
and upon receipt of instructions from the Participant, the shares held by the
custodian for the account of the Participant will be transferred and delivered
to the Participant in accordance with (a) above, transferred to a brokerage
account in accordance with (b) above, or sold in accordance with (c) above.
ARTICLE V
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ELIGIBILITY; OPTION PROVISIONS
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5.1 Eligibility. Except as herein provided, the persons who shall be
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eligible to participate in this Plan as of any Grant Date shall be those persons
(and only those persons) who are Eligible Employees of the Company on a Grant
Date.
5.2 Grant of Options. The Committee shall have authority to grant
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Options under this Plan at any time or from time to time to all Eligible
Employees as of a Grant Date. (To the extent an Option is granted to any
Eligible Employee of an entity on a relevant date, all Eligible Employees of the
entity shall be granted an Option to the extent required by law.) An Option
shall entitle the Participant to receive shares of Common Stock at the
conclusion of the Option Period, subject to the Participant's satisfaction in
full of any conditions, restrictions or limitations imposed in accordance with
this Plan or an Agreement, including without limitation, payment of the Option
Price. Each Option granted under this Plan shall be evidenced by an Agreement,
in a form approved by the Committee, which shall embody the terms and conditions
of such Option and which shall be subject to the express terms and conditions
set forth in this Plan and to such other terms and conditions as the Committee
may deem appropriate. The grant and exercise of Options hereunder shall be
subject to all applicable federal, state and local laws, rules and regulations
and to such approvals by any governmental or regulatory agencies as may be
required. As of any Grant Date, each Eligible Employee shall be granted Options
with the same
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rights and privileges as any other Eligible Employee on that Grant Date, except
the amount of the Common Stock which may be purchased by any Participant under
any Option may bear a uniform relationship to the total compensation, or the
basic or regular rate of compensation (as determined by the Committee) of all
Eligible Employees on that Grant Date, and the Option may establish a maximum
amount of Common Stock which may be purchased.
5.3 Option Period. Each Agreement shall specify the period for which
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the Option thereunder is granted, which shall be determined by the Committee.
In no event shall the Option Period exceed twenty-four (24) consecutive calendar
months or extend beyond the period permitted under Section 423(b)(7) of the
Code.
5.4 Option Price. Subject to the limits stated herein, the Option
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Price per share at which shares of Common Stock may be acquired upon exercise of
an Option shall be determined by the Committee. Unless otherwise specified by
the Committee, with respect to any Exercise Date, the Option Price shall not be
less than the lesser of eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock (averaged over such period as the Committee may determine
and as permitted by law) on the applicable Grant Date and eighty-five percent
(85%) of the Fair Market Value of a share of Common Stock (averaged over such
period as the Committee may determine and as permitted by law) on the applicable
Exercise Date. The Committee reserves the right to increase the Option Price by
the value of any accretion to the amounts credited to an Account if the
Participant is credited with such accretion, regardless of the method of
accounting for such accretion.
5.5 Contribution Rate. If an Eligible Employee elects to participate
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in this Plan, the Participant shall file an Agreement with the Committee within
the time period designated by the Committee. The Committee may provide that the
Agreement shall specify either a percentage of the Participant's compensation
(as defined by the Committee) or a dollar amount determined by the Participant
to be deducted each pay period, or the Committee may permit only a specified
percentage or a specified amount. Alternatively, the Committee may allow the
Participant to contribute to the Plan by check to be drawn by the Participant at
least once during the relevant Option Period. Such amount shall be credited to
the Account and shall be the Participant's Contribution Rate. Unless the
Participant's contributions are made in the form of checks, deductions shall
begin as of the first regularly scheduled payroll date on or after the later of
the Grant Date and the date specified by the Committee. The Committee may
establish minimum and maximum percentages or amounts to be contributed and a
date by when such Agreement must be filed with the Committee. Notwithstanding
the foregoing, in no event may more than $25,000 be deducted from the
Participant's compensation (as defined by the Committee) for each Option Period,
and the maximum number of shares which can be purchased by a Participant during
the Option Period shall not exceed such amount divided by eighty-five percent
(85%) of the Fair Market Value of a share of Common Stock on the applicable
Grant Date (as determined under Section 5.4). Such contributions will be held
in the general funds of the Company, and no interest shall accrue on any amounts
held under this Plan, unless expressly determined by the Committee. If a
Participant's contributions are made to a Subsidiary, that corporation will
promptly remit the amount of the contributions to the Company. A Participant's
Contribution
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Rate, once established, shall remain in effect during the Option Period, unless
and until contributions are suspended or fully discontinued, in order to comply
with Section 401(k) of the Code or for such other reasons as the Committee in
its sole discretion may determine, or if the Participant shall request
suspension or discontinuance. If a Participant requests to suspend
contributions, the Participant may do so at such times and in such manner as the
Committee may permit, and previously contributed amounts shall be retained until
the earlier of the Exercise Date and the date the Participant totally
discontinues contributions and requests a distribution of the Participant's
Account. A Participant who has suspended contributions may recommence such
contributions at such time, if at all, as determined by the Committee. If a
Participant requests to totally discontinue contributions, the Participant may
do so by providing written notice to the Committee, and there shall be paid to
the Participant the value of the Participant's Account as soon as
administratively possible and the Participant shall not receive any shares as of
the Exercise Date.
5.6 Purchase of Shares. Subject to Sections 5.7, 5.8, 5.9, 5.10 and
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5.11, on each Exercise Date a Participant who has previously executed an
Agreement with respect to a specific Grant Date and made one or more payments
described in Section 5.5 shall be deemed to have exercised the Option to the
extent of the value of the Participant's Account, subject to the $25,000 limit
set forth in Section 5.5 with respect to the Option being exercised and shall be
deemed to have purchased such number of full shares of Common Stock as equals
the value of the Account, subject to the limits of Sections 423(b)(3) and
423(b)(8) of the Code and the number of shares available hereunder as of the
Exercise Date and proportionately allocable to other Participants for that Grant
Date. The number of shares of Common Stock to be purchased by the Participant
as of any Exercise Date shall be determined by dividing the Option Price per
share of the Common Stock into the Account value, and the value of the shares so
purchased shall be charged to the Account. Any value remaining in the Account
shall be returned to the Participant and not applied to purchase Common Stock.
Certificates of Common Stock purchased hereunder may be held by the custodian as
provided in Section 4.6. The Committee may amend this Plan or any Agreement or
provide in operation for Participants to dispose of shares of Common Stock
received upon the Exercise Date on or immediately thereafter (which time may
include any period during which the Option is held) to the extent such change
would not result in liability under Section 16 of the Exchange Act. If the
total number of shares to be purchased as of any Exercise Date by all
Participants exceeds the number of shares authorized under this Plan or made
available by the Committee as to any Exercise Date, a pro rata allocation of the
available shares will be made among all Participants making contributions to the
Plan, based on the amount of their respective contributions through the Exercise
Date.
5.7 Cancellation of Options. Except as otherwise provided in an
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Agreement, an Option shall cease to be exercisable, and shall be cancelled, on
or after the expiration of the Option Period.
5.8 Terminated Employees. Except as otherwise provided by the
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Committee or in an Agreement, any Participant who incurs a Termination of
Employment for any reason, except death, Disability or Retirement, during the
Option Period shall cease to be a Participant, the
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Option shall be null and void on the date of the Termination of Employment
without notice to the Participant, and the balance of the Account of the
Participant shall be distributed to the Participant as soon as administratively
possible.
5.9 Deceased Employees. If a Participant shall die during an Option
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Period while an Eligible Employee, no further contributions by deduction from
regularly scheduled payments on behalf of the deceased Participant shall be
made, except that the Representative may make a single sum payment with respect
to the Option at any time on or before the next Exercise Date equal to the
amount the Participant would have contributed as determined by the Committee for
the payroll periods remaining to the next Exercise Date. The Representative may
at any time prior to the next Exercise Date request a distribution of the
deceased Participant's Account. If the Representative does not request a
distribution of the Account, the balance accumulated in the deceased
Participant's Account shall be used to purchase shares of the Common Stock on
the previously mentioned Exercise Date.
5.10 Disabled or Retired Employees. If a Participant incurs a
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Termination of Employment due to Disability, or if a Participant incurs a
Termination of Employment due to Retirement, during an Option Period, no further
contributions by deduction from regularly scheduled payments on behalf of the
disabled or retired Participant shall be made, except that the Participant may
make a single sum payment with respect to the Option at any time on or before
the next Exercise Date equal to the amount the Participant would have
contributed as determined by the Committee for the payroll periods remaining to
the next Exercise Date. The disabled or retired Participant may at any time
prior to the next Exercise Date request a distribution of his or her Account.
If the disabled or retired Participant does not request a distribution of his or
her Account, the balance accumulated in the disabled or retired Participant's
Account shall be used to purchase shares of the Common Stock on the previously
mentioned Exercise Date.
5.11 Limitations. Notwithstanding any other provision of this Plan,
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in no event may a Participant (i) purchase under this Plan during a calendar
year Common Stock having a fair market value (determined at Grant Date) of more
than $25,000 to the extent required by Section 423(b)(8) of the Code, or (ii)
receive any rights to purchase stock hereunder if he or she beneficially owns,
immediately after such receipt, five percent (5%) or more of the total voting
power or value of all classes of stock of the Company.
5.12 Nonassignability. No Option or Account shall be assigned,
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transferred (except as herein provided), pledged, or hypothecated in any way
(whether by operation of law or otherwise), other than by will or the laws of
descent and distribution or pursuant to a domestic relations order which would
be a qualified domestic relations order as defined in the Code or ERISA (if this
Plan were described in the relevant Sections) but only to the extent consistent
with Section 423 of the Code. Except as provided herein, an Option is
exercisable during a Participant's lifetime only by the Participant or the
appointed guardian or legal representative of the Participant, and neither the
Option nor the Participant's Account shall be subject to execution, attachment
or similar process. Any attempted assignment, transfer, pledge, hypothecation
or other disposition contrary to the provisions hereof of, or the levy of any
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attachment or similar process upon, an Option or an Account shall be null and
void and without effect. The Company shall have the right to terminate an
Option or an Account in the event of any such assignment, transfer, pledge,
hypothecation or other disposition of the Option or the Account, or levy of
attachment or similar process upon the Option or the Account, by notice to that
effect to the person then entitled to exercise the Option; provided, however,
that termination of the Option hereunder shall not prejudice any rights or
remedies which the Company may have under an Agreement or otherwise.
ARTICLE VI
----------
GENERAL PROVISIONS APPLICABLE TO THE PLAN
-----------------------------------------
6.1 Termination of Plan. To the extent required by law, this Plan
-------------------
shall terminate on the last day of the ten (10) year period commencing with the
Effective Date or at such earlier time as the Board may determine, and no
Options shall be granted under this Plan after that termination date. Any
Options outstanding under this Plan at the time of its termination shall remain
in effect until they shall have been exercised, expired or otherwise cancelled,
settled or terminated as provided herein or in an Agreement, and such
outstanding Options shall not be affected by such termination of this Plan. The
provisions of this Plan in respect to the full and final authority of the
Committee under this Plan, other than the authority to grant Options, and in
respect of a Participant's obligations respecting shares of Common Stock
received pursuant to the exercise of an Option, shall continue notwithstanding
the termination of this Plan.
6.2 Investment Representation. In the event the issuance by the
-------------------------
Company of Common Stock acquired upon the exercise of any Option is not covered
by a then current registration statement under the Securities Act, the Common
Stock so acquired shall be restricted against transfer to the extent required by
the Securities Act or regulations thereunder, and each Agreement shall contain a
requirement that, upon demand by the Company for such representation, the
individual exercising an Option shall state in writing, as a condition precedent
to each exercise of the Option, in whole or in part, that the Common Stock
acquired by such exercise is acquired for investment purposes only and not for
resale or with a view to distribution. The Committee may set forth in an
Agreement such other terms and conditions relating to the registration or
qualification of the Common Stock under federal or state securities laws as it
desires.
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6.3 Effect of Certain Changes.
-------------------------
(a) Anti-Dilution. 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 (as measured on either a
stand-alone or consolidated basis), reorganization, rights
offering, partial or complete liquidation, or any other
corporate transaction or event involving the Company and
having an effect similar to any of the foregoing, then the
Committee may adjust or substitute, as the case may be, the
number of shares of Common Stock available for Options under
this Plan, the number of shares of Common Stock covered by
outstanding Options, the exercise price per share of
outstanding Options, and any other characteristics or terms
of the Options as the Committee shall deem necessary or
appropriate to reflect equitably the effects of such event
to the Participants; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated by
rounding to the next lower whole number of shares with
appropriate payment for such fractional shares as shall
reasonably be determined by the Committee.
(b) Change in Control. If there is a Change in Control of the
-----------------
Company (as defined herein) or the Committee reasonably
anticipates a Change in Control is likely to occur, then (1)
the Committee may cause each Option to be immediately
exercisable; (2) the Committee may provide that any Option
exercisable on the date of any such Change in Control may be
purchased by the Company in an amount equal to the excess,
if any, of the aggregate Fair Market Value per share of
Common Stock subject to the Option (or portion thereof) over
the aggregate Option Price of the shares subject to the
Option (or portion thereof) which the Committee determines
to purchase; or (3) the Company may provide for any
combination of (1) and (2) above. For purposes of this
Section 6.3(b), the aggregate Fair Market Value per share of
Common Stock subject to the Option that the Committee
determines to purchase shall be determined by the Committee
by reference to the cash or fair market value, determined by
the Committee, of securities, property or other
consideration receivable pursuant to the Change in Control
described in this Section 6.3(b). The aggregate Option Price
of such shares of Common Stock shall be determined by
multiplying the number of such shares by the Option Price.
In the event of a Change in Control described in Section
6(c)(iii), and if the Option is unexercised and the
Committee does not exercise its discretion hereunder to
purchase the Option, then the Option shall be
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<PAGE>
regarded as the right to receive the securities, property,
cash or other consideration receivable by the stockholders
of the Company immediately prior to the Change in Control
described in Section 6(c)(iii). The provisions of this
Section 6.3(b) shall be construed consistently with the
terms or conditions of any regulation or ruling respecting
the status of Options under Section 423 of the Code and the
receipt of cash or other consideration coincident with the
cancellation of such Options, and in order to provide the
Participant the economic benefit of the Option without
incurring liability under Section 16(b) of the Exchange Act.
(c) "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 Andrew J. Filipowski or any of his
Permitted Transferees (as defined in the Company's
Certificate of Incorporation, as amended and restated),
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 6.3(c); 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 6.3(c), 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
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<PAGE>
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
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<PAGE>
the Corporation of such Corporate Transaction will
constitute at least a majority 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 6.3(c), assuming for
this purpose that such transaction were a Corporate
Transaction.
6.4 Withholding. Notwithstanding any other provision hereof, as a
-----------
condition of delivery or transfer of shares of Common Stock, the Committee, in
its sole discretion, may require a Participant to pay to the Company, or the
Committee may at its election withhold from any wages, salary or stock to be
issued to the Participant pursuant to the exercise of an Option, or other
payment due to the Participant, an amount sufficient to satisfy all present or
estimated future federal, state and local withholding tax requirements related
thereto. The Participant may satisfy any requirement under this Plan or an
Agreement with respect to the Company's federal, state or local tax withholding
obligation by requesting that the Committee withhold and not transfer or issue
to the Participant shares of Common Stock, with a Fair Market Value equal to
such withholding obligation, otherwise issuable or transferable to the
Participant pursuant to the exercise of that portion of the Option. An
Agreement may provide for shares of Common Stock to be delivered or withheld
having a Fair Market Value in excess of the minimum amount required to be
withheld, but not in excess of the amount determined by applying the
Participant's maximum marginal tax rate. Any right or election of the
Participant under this Section 6.4 shall be subject to the approval of the
Committee. The amount of required withholding shall, at the election of the
Participant, be at a specified rate not less than the statutory minimum federal
and state withholding rate and not greater than the maximum federal, state and
local marginal tax rate applicable to the Participant and to the particular
Option exercise transaction.
6.5 No Company Obligation. Neither the Company nor any Subsidiary
---------------------
which has adopted this Plan shall have any duty or obligation to affirmatively
disclose to a record or beneficial holder of an Option, and such holder shall
have no right to be advised of, any material information regarding the Company
or Subsidiary at any time prior to, upon or in connection with the exercise of
an Option.
6.6 Committee Discretion. The Committee may in its sole discretion
--------------------
include in any Agreement an obligation that the Company purchase a Participant's
shares of Common Stock received upon the exercise of an Option (including the
repurchase of any unexercised Options which have not expired), or may obligate a
Participant to sell shares of Common Stock to the Company, upon such terms and
conditions as the Committee may determine and set forth in an Agreement. The
provisions of this Article VI shall be construed by the Committee in its sole
discretion and shall be subject to such other terms and conditions as the
Committee may from time to time determine.
17
<PAGE>
ARTICLE VII
-----------
MISCELLANEOUS
-------------
7.1 Indemnification of the Board and Committee. In addition to such
------------------------------------------
other rights of indemnification as they may have and to the extent permitted by
law, the Company shall indemnify, defend and hold harmless the Board, the
Committee, the members of the Committee, the officers of the Company, and any
agents or representatives selected by the Board or Committee (collectively
"indemnified parties") against the reasonable expenses, including, without
limitation, attorneys' fees, actually and necessarily incurred by them in
connection with the defense of any action, suit or proceeding, or any threat
thereof, or in connection with any appeal therein, to which they or any of them
may be a party by reason of any act or omission in connection with this Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that any such indemnified party
is liable for gross negligence or gross misconduct in the performance of his or
her duties; provided that, within sixty (60) days after institution of any such
action, suit or proceeding, an indemnified party may in writing elect to defend
the same at his or her sole expense, and if such election is made, the Company
shall have no further liability or obligations to the indemnified party under
this Section 7.1. The provisions of this Section 7.1 shall in no way limit any
other obligation or arrangements the Company may have with regard to
indemnifying an indemnified party.
7.2 Mitigation of Excise Tax. If any payment or right accruing to a
------------------------
Participant under this Plan (without the application of this Section 7.2),
either alone or together with other payments or rights accruing to the
Participant from the Company ("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; provided, however,
that the foregoing shall not apply to the extent provided otherwise in an Option
or in the event the Participant is party to an agreement with the Company or an
Affiliate that explicitly provides for an alternate treatment of payments or
rights that would constitute "parachute payments." The determination of whether
any reduction in the rights or payments under this Plan is to apply shall be
made by the Committee 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 Committee in making such
determination and providing the necessary information for this purpose. The
foregoing provisions of this Section 7.2 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
18
<PAGE>
of the Total Payments as reduced, if applicable, under the foregoing provisions
of this Plan and after reduction for only federal income taxes.
7.3 Interpretation. Whenever necessary or appropriate in this Plan
--------------
and where the context so requires, the singular term and the related pronouns
shall include the plural and the masculine and feminine gender.
7.4 Governing Law. This Plan and any Agreement shall be governed by
-------------
the laws of the State of Delaware (other than its laws respecting choice of
law).
7.5 Limitations on Liability. No liability whatsoever shall attach
------------------------
to, or be incurred by, any past, present or future stockholders, officers or
directors, merely as such, of the Company under or by reason of any of the
terms, conditions or agreements contained in this Plan or any Agreement or
implied from either thereof, and any and all liabilities of, and any and all
rights and claims against the Company, or any stockholder, officer or director,
merely as such, whether arising at common law or in equity or created by statute
or constitution or otherwise, pertaining to this Plan or to any Agreement, are
hereby expressly waived and released by every Participant as a part of the
consideration for any benefits provided by the Company under this Plan. A
person who shall claim a right or benefit under this Plan shall be entitled only
to claim against the Company for such benefit.
7.6 Validity. 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 hereof, and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.
7.7 Assignment. This Plan shall inure to the benefit of, and be
----------
binding upon, the parties hereof and their respective successors and permitted
assigns.
7.8 Captions. The captions and headings to this Plan are for
--------
convenience of reference only and in no way define, limit or describe the scope
or the intent of this Plan or any part hereof, nor in any way affect this Plan
or any part hereof.
7.9 Amendments. The Board of Directors may at any time amend, waive,
----------
discharge or terminate this Plan, even with prejudice to a Participant. The
Board or the Committee may amend, waive, discharge, terminate, modify, extend,
replace or renew any outstanding Option Agreement, even with prejudice to a
Participant, provided such change does not cause this Plan to fail to be a plan
as described in Section 423 of the Code.
7.10 Entire Agreement. This Plan and each Agreement 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 the Agreement, the
terms and conditions of this Plan shall control.
19
<PAGE>
7.11 Rights with Respect to Continuance of Employment. Nothing
------------------------------------------------
contained herein or in any Agreement shall be deemed to alter any employment
relationship between the Company or a Subsidiary and a Participant. Nothing
contained herein or in an Agreement shall be construed to constitute a contract
of employment between the Company or a Subsidiary and a Participant. The
Company or, as applicable, the Subsidiary and the Participant each continue to
have the right to terminate the employment relationship at any time for any
reason. The Company or Subsidiary shall have no obligation to retain the
Participant in its employ as a result of this Plan. There shall be no inference
as to the length of employment hereby, and the Company or Subsidiary reserves
the same rights to terminate the Participant's employment as existed prior to
the individual becoming a Participant in this Plan.
7.12 Options for Shares in Substitution for Stock Options Granted by
---------------------------------------------------------------
Other Corporations. Options may be granted under this Plan from time to time in
------------------
substitution for stock options or stock appreciation rights held by employees,
directors or service providers of other corporations who are about to become
employees of the Company as the result of a merger or consolidation of the
employing corporation with the Company, or the acquisition by the Company of the
assets of the employing corporation, or the acquisition by the Company of the
stock of the employing corporation, as the result of which it becomes a
designated employer under this Plan. The terms and conditions of the Options so
granted may vary from the terms and conditions set forth in this Plan at the
time of such grant as the majority of the members of the Committee may deem
appropriate to conform, in whole or in part, to the provisions of the options in
substitution for which they are granted.
7.13 Procedure for Adoption. Any Subsidiary of the Company may by
----------------------
resolution of such Subsidiary's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the Board
of Directors, adopt this Plan for the benefit of its employees as of the date
specified in the board resolution. The Board shall have the power to make such
designation before or after this Plan is approved by stockholders.
7.14 Procedure for Withdrawal. Any Subsidiary which has adopted this
------------------------
Plan may, by resolution of the board of directors of such Subsidiary, with the
consent of the Board of Directors and subject to such conditions as may be
imposed by the Board of Directors, terminate its adoption of this Plan; provided
such termination of adoption does not cause this Plan to fail to be a plan
described in Section 423 of the Code.
20
<PAGE>
7.15 Expenses. Expenses of this Plan, including the fees or expenses
--------
incurred by the transfer agent in connection with the transfer of Common Stock,
and brokerage fees or expenses incurred by a Participant in connection with the
acquisition of Common Stock pursuant to this Plan or transfer of shares to a
Participant, shall be charged to the Accounts of affected Participants or
charged to the accretion to the amounts credited to any Accounts if the
Participants are credited with such accretion regardless of the method of
accounting for such accretion, except to the extent paid by the Company or
otherwise accounted for by the Company. Any expenses or fees associated with
the Common Stock, including, for example, custodian or brokerage fees after
Common Stock is transferred to a Participant or for the Participant's account,
or fees or commissions in connection with the disposition of shares, shall be
borne by the Participant.
Executed and effective as of the 29/th/ day of January, 2000.
divine interVentures, inc.
By:______________________________________
Title: Executive Vice-President, General
Counsel and Secretary
21
