EXHIBIT E
NXGEN NETWORKS, INC.
2000 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business. Options granted under the Plan
may be Incentive Stock Options or Non-statutory Stock Options, as determined by
the Administrator at the time of grant. Stock Purchase Rights may also be
granted under the Plan.
2. Definitions. As used in this Stock Plan, the following definitions will
apply:
(a) "Administrator" means the Board or any of its Committees as
will be administering the Plan under Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state
corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board under Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means NxGen Networks, Inc., a Nevada corporation.
(h) "Consultant" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory
services to such entity.
(i) "Director" means a member of the Board of Directors of the
Company.
(j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider will not cease to be an Employee
in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or
any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless
re-employment on expiration of such leave is guaranteed by
statute or contract. If re-employment on expiration of a leave
of absence approved by the Company is not so guaranteed, on
the 181st day of such leave any Incentive Stock Option held by
the Optionee will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Non-statutory
Stock Option. Neither service as a Director nor payment of a
director's fee by the Company will be sufficient to constitute
"employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including
without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value will be the
closing sales price for the stock (or the closing bid,
if no sales were reported) as quoted on the exchange
or system for the last market trading day prior to the
time of determination, as reported in The Wall Street
Journal or any other source as the Administrator
considers reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are
not reported, its Fair Market Value will be the mean
between the high bid and low asked prices for the
Common Stock on the last market trading day prior to
the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value will be determined in
good faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422
of the Code.
(o) "Non-statutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
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(p) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Option Agreement" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement
is subject to the terms and conditions of the Plan.
(s) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option
or a Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(v) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this 2000 Stock Plan.
(x) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11
below.
(y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(z) "Section 16(b)" means Section 16(b) of the Exchange Act.
(aa) "Service Provider" means an Employee, Director or Consultant.
(bb) "Share" means a share of the Common Stock, as adjusted under
Section 12 below.
(cc) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.
(dd) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares that may be subject to option and
sold under the Plan is 3,000,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased underlying Shares will become available for future
grant or sale under the Plan (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan, on exercise of either an Option
or Stock Purchase Right, will not be returned to the Plan and will not become
available for future distribution under the Plan, except that if Shares of
Restricted Stock are repurchased by the Company at their original purchase
price, the Shares will become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator determines it to
be desirable to qualify Options granted hereunder as
"performance-based compensation," within the meaning of Section 162(m)
of the Code, the Plan will be administered by a Committee of two or
more "outside directors," within the meaning of Section 162(m) of the
Code.
(iii)Rule 16b-3. To the extent desirable to qualify transactions hereunder
as exempt under Rule 16b-3, the transactions contemplated hereunder
will be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will
be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan and, in
the case of a Committee, the specific duties delegated by the Board to the
Committee, and subject to the approval of any relevant authorities, the
Administrator will have the authority in its discretion: (i) to determine
the Fair Market Value; (ii) to select the Service Providers to whom Options
and Stock Purchase Rights may from time to time be granted hereunder;
(iii)to determine the number of Shares to be covered by each award granted
under the Plan;
(iv) to approve forms of agreement for use under the Plan;
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(v) to determine the terms and conditions, of any Option or Stock purchase
Right granted under the Plan. The terms and conditions include, but
are not limited to, the exercise price, the time or times when Options
or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding
any Option or Stock Purchase Right or underlying Common Stock, based
in each case on the factors as the Administrator, in its sole
discretion, will determine;
(vi) to determine whether and under what circumstances an Option may be
settled in cash under subsection 9(e) instead of Common Stock;
(vii)to reduce the exercise price of any Option to the then current Fair
Market Value if the Fair Market Value of the Common Stock covered by
the Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to allow Optionees to satisfy withholding tax obligations by electing
to have the Company withhold from the Shares to be issued on exercise
of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld will be determined on
the date that the amount of tax to be withheld is to be determined.
All elections by Optionees to have Shares withheld for this purpose
will be made in the form and under the conditions as the Administrator
may consider necessary or advisable; and
(xi) to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator will be final and binding on all
Optionees.
5. Eligibility.
(a) Non-statutory Stock Options and Stock Purchase Rights may be granted to
Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) Each Option will be designated in the Option Agreement as either an
Incentive Stock Option or a Non-statutory Stock Option. However,
notwithstanding the designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, the Options will be treated as Non-statutory Stock Options. For
purposes of this Section 5(b), Incentive Stock Options will be taken into
account in the order in which they were granted. The Fair Market Value of
the Shares will be determined as of the time the Option with respect to the
Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right will confer on any
Optionee any right with respect to continuing the Optionee's relationship
as a Service Provider with the Company, nor will it interfere in any way
with his or her right or the Company's right to terminate the relationship
at any time, with or without cause.
(d) The following limitations will apply to grants of Options:
(i) No Service Provider will be granted, in any fiscal
year of the Company, Options to purchase more than
___________ Shares.
(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up
to an additional _________ Shares which will not count
against the limit set forth in subsection (i) above.
(iii) The foregoing limitations will be adjusted
proportionately in connection with any change in the
Company's capitalization as described in Section 12.
(iv) If an Option is cancelled in the same fiscal year of
the Company in which it was granted (other than in
connection with a transaction described in Section
12), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above.
For this purpose, if the exercise price of an Option
is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new
Option.
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6. Term of Plan. The Plan will become effective on its adoption by the Board. It
will continue in effect for a term of ten (10) years unless terminated at an
earlier date under Section 14 of the Plan.
7. Term of Option. The term of each Option will be stated in the Option
Agreement; provided, however, that the term will be no more than ten (10) years
from the date of grant. In the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option will be five (5)
years from the date of grant or a shorter term as may be provided in the Option
Agreement.
8. Option Exercise Price and Consideration.
(a) Option Exercise Price. The per share exercise price for the Shares to be
issued on exercise of an Option will be the price as is determined by the
Administrator, but will be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at
the time of grant of the Option,
owns stock representing more than
ten percent (10%) of the voting
power of all classes of stock of
the Company or any Parent or
Subsidiary, the exercise price
will be no less than 110% of the
Fair Market Value per Share on
the date of grant.
(B) granted to any other Employee,
the per Share exercise price will
be no less than 100% of the Fair
Market Value per Share on the
date of grant.
(ii) In the case of a Non-statutory Stock Option, the per
Share exercise price will be determined by the
Administrator. In the case of a Non-statutory Stock
Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of
the Code, the per Share exercise price will be no less
than 100% of the Fair Market Value per Share on the
date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required
above pursuant to a merger or other corporate
transaction.
(b) Consideration. The consideration to be paid for the Shares to be issued on
exercise of an Option, including the method of payment, will be determined
by the Administrator (and, in the case of an Incentive Stock Option, will
be determined at the time of grant). The consideration may consist of:
(i) cash,
(ii) check,
(iii) promissory note,
(iv) other Shares which:
(A) in the case of Shares acquired on
exercise of an Option, have been
owned by the Optionee for more
than six months on the date of
surrender, and
(B) have a Fair Market Value on the
date of surrender equal to the
aggregate exercise price of the
Shares as to which the Option
will be exercised,
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with
the Plan, or
(vi) any combination of the foregoing methods of payment.
In making its determination as to the type of consideration to
accept, the Administrator will consider if acceptance of the
consideration may be reasonably expected to benefit the
Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted under the Plan will be exercisable
according to the terms of the Plan at the times, and
under any other conditions as determined by the
Administrator and set forth in the Option Agreement.
Unless the Administrator provides otherwise, vesting
of Options granted to Officers and Directors will be
tolled during any unpaid leave of absence. An Option
may not be exercised for a fraction of a Share.
An Option will be considered exercised when the Company
receives:
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(i) written or electronic notice of exercise (under the
Option Agreement) from the person entitled to exercise
the Option, and
(ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and
the Plan. Shares issued on exercise of an Option will
be issued in the name of the Optionee or, if requested
by the Optionee, in the name of the Optionee and his or
her spouse. Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights
as a shareholder will exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) the Shares promptly
after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except
as provided in Section 12 of the Plan.
Exercise of an Option in any manner will result in a decrease
in the number of Shares thereafter available, both for
purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee ceases to
be a Service Provider, the Optionee may exercise his or her Option within
the period of time as is specified in the Option Agreement to the extent
that the Option is vested on the date of termination (but in no event later
than the expiration of the term of the Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option will remain exercisable for three (3) months following the
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option will terminate, and the Shares covered by the
Option will revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a
result of the Optionee's Disability, the Optionee may exercise his or her
Option within the period of time as is specified in the Option Agreement to
the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of the Option as set forth in the
Option Agreement). In the absence of a specified time in the Option
Agreement, the Option will remain exercisable for twelve (12) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option will revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the
time specified, the Option will terminate, and the Shares covered by the
Option will revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the Option
may be exercised within the period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of death (but
in no event later than the expiration of the term of the Option as set
forth in the Option Agreement) by the Optionee's estate or by a person who
acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option will remain
exercisable for twelve (12) months following the Optionee's termination.
If, at the time of death, the Optionee is not vested as to the entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan. If the Option is not so exercised within
the time specified, the Option will terminate, and the Shares covered by
the Option will revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares, an Option previously granted, based on the terms
and conditions as the Administrator will establish and communicate to the
Optionee at the time that the offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. The Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. Stock Purchase Rights.
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(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in
addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it will advise the
offeree in writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
person will be entitled to purchase, the price to be paid, and the time
within which the person must accept the offer. The offer will be accepted
by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock purchase agreement will grant the Company a repurchase
option exercisable on the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement will be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option will lapse at the rate as
the Administrator may determine.
(c) Other Provisions. The Restricted Stock purchase agreement will contain any
other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the
purchaser will have rights equivalent to those of a shareholder and will be
a shareholder when his or her purchase is entered on the records of the
duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section
12 of the Plan.
12. Adjustments On Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan on cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each outstanding Option or Stock Purchase
Right, will be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company. The conversion of any convertible securities of the Company will
not be considered to have been "effected without receipt of consideration."
The adjustment will be made by the Board, whose determination in that
respect will be final, binding and conclusive. Except as expressly provided
in this Plan, no issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, will affect,
and no adjustment will be made to, the number or price of shares of Common
Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify the Optionee not
less than fifteen (15) days prior to the proposed action. To the extent it
has not been previously exercised, the Option or Stock Purchase Right will
terminate immediately prior to the consummation of the proposed action.
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(c) Merger. In the event of a merger, sale or reorganization of the Company
with or into any other corporation or corporations or a sale of all or
substantially all of the assets or outstanding stock of the Company, in
which transaction the Company's stockholders immediately prior to the
transaction own immediately after the transaction less than 50% of the
equity securities of the surviving corporation or its parent, all Options
that have not been terminated under the Stock Option Agreement that will
become vested within 18 months of the closing date of the merger, sale or
reorganization will be accelerated. In the event of a merger of the Company
with or into another corporation, each outstanding Option or Stock Purchase
Right may be assumed or an equivalent option or right may be substituted by
the successor corporation or a parent or subsidiary of the successor
corporation. If, in the event, an Option or Stock Purchase Right is not
assumed or substituted, the Option or Stock Purchase Right will terminate
as of the date of the closing of the merger. For the purposes of this
paragraph, the Option or Stock Purchase Right will be considered assumed
if, following the merger, the Option or Stock Purchase Right confers the
right to purchase or receive, for each Share of Optioned Stock subject to
the Option or Stock Purchase Right immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on
the effective date of the transaction (and if the holders are offered a
choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares). If the consideration received in the
merger is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received on the exercise
of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the merger.
13. Non-Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, the Option
or Stock Purchase Right will contain all additional terms and conditions as the
Administrator considers appropriate.
14. Time of Granting Options and Stock Purchase Rights. The date of grant of an
Option or Stock Purchase Right will, for all purposes, be the date on which the
Administrator makes the determination granting the Option or Stock Purchase
Right, or any other date as is determined by the Administrator. Notice of the
determination will be given to each Service Provider to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of the
grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend
or terminate the Plan.
(b) Shareholder Approval. The Board will obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan will not affect the Administrator's ability to
exercise the powers granted to it with respect to Options granted under the
Plan prior to the date of termination.
16. Conditions On Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an
Option unless the exercise of the Option and the issuance and delivery of
the Shares will comply with Applicable Laws and will be further subject to
the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Option,
the Administrator may require the person exercising the Option to represent
and warrant at the time of exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute
the Shares if, in the opinion of counsel for the Company, such a
representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
considered by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares the Plan, will relieve the Company of any liability in
respect of the failure to issue or sell the Shares as to which the requisite
authority may not have been obtained.
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18. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available a sufficient number of Shares to satisfy
the requirements of the Plan.
19. Shareholder Approval. The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Shareholder approval must be obtained in the degree and manner required
under Applicable Laws.
NxGen Networks, Inc.
2000 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined in this Stock Option Agreement, the terms defined in
the 2000 Stock Plan will have the same defined meanings in this Stock Option
Agreement.
1. Notice of Stock Option Grant.
Name: ______________________________ "Optionee"
The Optionee has been granted an Option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Date of Grant: __________________________
Vesting Commencement Date: _____________"VCD"
Exercise Price per Share: _________________
Total Number of Shares Granted: __________ Number of shares
Total Exercise Price: _____________________Total Price
Type of Option: _________________________ Incentive Stock Option
_________________________ Non-statutory Stock Option
Term/Expiration Date: ___________________
Vesting Schedule:
The vesting schedule shall be determined by the Administrator in its sole
discretion.
Termination Period:
This Option will be exercisable for one month after Optionee ceases to be a
Service Provider. On Optionee's death or Disability, this Option may be
exercised for one year after Optionee ceases to be a Service Provider. In no
event may Optionee exercise this Option after the Term/Expiration Date as
provided above.
2. Agreement.
2. Grant of Option. The Plan Administrator of the Company grants
to the Optionee named in the Notice of Grant (the "Optionee"),
an option (the "Option") to purchase the number of Shares set
forth in the Notice of Grant, at the exercise price per Share
set forth in the Notice of Grant (the "Exercise Price"), and
subject to the terms and conditions of the Plan, which is
incorporated by reference. Subject to Section 14(c) of the
Plan, in the event of a conflict between the terms and
conditions of the Plan and this Option Agreement, the terms
and conditions of the Plan will prevail.
If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule
of Code Section 422(d), this Option will be treated as a
Non-statutory Stock Option ("NSO").
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3. Exercise of Option.
(i) Right to Exercise. This Option will be exercisable
during its term under the Vesting Schedule set out in
the Notice of Grant and with the applicable provisions
of the Plan and this Option Agreement.
(ii) Method of Exercise. This Option will be exercisable by
delivery of an exercise notice in the form attached as
Exhibit A (the "Exercise Notice") which will state the
election to exercise the Option, the number of Shares
with respect to which the Option is being exercised,
and any other representations and agreements as may be
required by the Company. The Exercise Notice will be
accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option will be
considered to be exercised on receipt by the Company
of a fully executed Exercise Notice accompanied by the
aggregate Exercise Price.
No Shares will be issued pursuant to the exercise of
an Option unless the issuance and exercise complies
with Applicable Laws. Assuming compliance, for income
tax purposes the Shares will be considered transferred
to the Optionee on the date on which the Option is
exercised with respect to the Shares.
3. Method of Payment. Payment of the aggregate Exercise Price will be by any of
the following, or a combination of the following, at the election of the
Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal cashless exercise
program adopted by the Company in connection with the Plan; or
(c) surrender of other Shares which:
(i) in the case of Shares acquired on exercise of an option, have
been owned by the Optionee for more than six (6) months on the
date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the
aggregate Exercise Price of the Exercised Shares.
4. Restrictions on Exercise. This Option may not be exercised until such time as
the Plan has been approved by the stockholders of the Company, or if the
issuance of the Shares on the exercise or the method of payment of consideration
for the shares would constitute a violation of any Applicable Law.
5. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement will be binding on the executors, administrators,
heirs, successors and assigns of the Optionee.
6. Term of Option. This Option may be exercised only within the term set out in
the Notice of Grant, and may be exercised during the term only under the Plan
and the terms of this Option.
7. Tax Consequences. Set forth below is a brief summary as of the date of this
Option of some of the federal tax consequences of exercise of this Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of NSO. There may be a regular federal income tax liability
on the exercise of an NSO. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay
to the applicable taxing authorities an amount in cash equal to a
percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if the
withholding amounts are not delivered at the time of exercise.
<PAGE>
(b) Exercise of ISO. If this Option qualifies as an ISO, there will be no
regular federal income tax liability on the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an
adjustment to the alternative minimum tax for federal tax purposes and
may subject the Optionee to the alternative minimum tax in the year of
exercise.
(c) Disposition of Shares. In the case of an NSO, if Shares are held for
not less than one year, any gain realized on disposition of the Shares
will be treated as long-term capital gain for federal income tax
purposes. In the case of an ISO, if Shares transferred pursuant to the
Option are held for not less than one year after exercise and of not
less than two years after the Date of Grant, any gain realized on
disposition of the Shares will also be treated as long-term capital
gain for federal income tax purposes. If Shares purchased under an ISO
are disposed of within one year after exercise or two years after the
Date of Grant, any gain realized on such disposition will be treated
as compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the lesser of:
(i) the Fair Market Value of the Shares on the date of exercise, or
(ii) the sale price of the Shares. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period
that the ISO Shares were held.
(d) Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or
before the later of:
(i) the date two years after the Date of Grant, or
(ii) the date one year after the date of exercise, the Optionee will
immediately notify the Company in writing of such disposition.
Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized
by the Optionee.
8. Entire Agreement; Governing Law. The Plan is incorporated by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to Options and Stock Purchase Rights, and may
not be modified adversely to the Optionee's interest except by means of a
writing signed by the Company and Optionee. This agreement is governed by the
internal substantive laws but not the choice of law rules of Nevada.
9. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE APPLICABLE VESTING SCHEDULE IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE ATTACHED VESTING SCHEDULE DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY
WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
<PAGE>
Optionee acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions of the Plan, and accepts this
Option subject to all of the terms and provisions of the Plan. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator on
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company on any change in the residence address indicated below.
OPTIONEE: NxGen Networks, Inc.
--------------------------------- ---------------------------------
Signature By:_______________________
--------------------------------- ---------------------------------
Print Name Title
---------------------------------
Social Security Number
Residential Address:
---------------------------------
---------------------------------
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and approves the terms and
conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned agrees to be irrevocably
bound by the terms and conditions of the Plan and this Option Agreement and
further agrees that any community property interest shall be similarly bound.
The undersigned appoints the undersigned's spouse as attorney-in-fact for the
undersigned with respect to any amendment or exercise of rights under the Plan
or this Option Agreement.
---------------------------------
Spouse of Optionee
<PAGE>
EXHIBIT A
2000 STOCK PLAN
EXERCISE NOTICE
NxGen Networks, Inc.
721 E. Madison
Villa Park, Illinois 60181
1. Exercise of Option. Effective as of today, ___________, 20__, the undersigned
("Optionee") elects to exercise Optionee's option to purchase _________ shares
of the Common Stock (the "Shares") of NxGen Networks, Inc. (the "Company") under
and pursuant to the 2000 stock plan (the "Plan") and the stock option agreement
dated ________, 20__ (the "Option Agreement"). The purchase price for the Shares
shall be $________, as required by the Option Agreement.
2. Delivery of Payment. Purchaser has delivered to the Company the full purchase
price of the Shares.
3. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance of the Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares will be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date of issuance except as provided in Section 12 of the Plan.
5. Tax Consultation. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee's purchase or disposition of the Shares.
Optionee represents that Optionee has consulted with any tax consultants
Optionee considers advisable in connection with the purchase or disposition of
the Shares and that Optionee is not relying on the Company for any tax advice.
6. Interpretation. Any dispute regarding the interpretation of this Exercise
Notice will be submitted by Optionee or by the Company immediately to the
Administrator which will review the dispute at its next regular meeting. The
resolution of a dispute by the Administrator will be final and binding on all
parties.
7. Entire Agreement/Governing Law. The Plan and Option Agreement are
incorporated by reference. This Exercise Notice, the Plan, the Option Agreement
and the Investment Representation Statement constitute the entire agreement of
the parties concerning Options and Stock Purchase Rights and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee
concerning Options and Stock Purchase Rights, and may not be modified adversely
to the Optionee's interest except by means of a writing signed by the Company
and Optionee. This Exercise Notice is governed by the internal substantive laws
but not the choice of law rules, of Nevada.
Submitted By: Accepted By:
OPTIONEE: NxGen Networks, Inc.
--------------------------------- ---------------------------------
Signature By:_______________________
--------------------------------- ---------------------------------
Print Name Title
---------------------------------
Social Security Number
Date Received: _____________________
