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EXHIBIT 10.9
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SIGNALSOFT CORPORATION
EQUITY INCENTIVE PLAN
(EFFECTIVE __________, 2000)
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SIGNALSOFT CORPORATION
EQUITY INCENTIVE PLAN
ARTICLE I
INTRODUCTION
1.1 ESTABLISHMENT. SignalSoft Corporation, a Delaware corporation,
hereby establishes the SignalSoft Corporation Equity Incentive Plan (the "Plan")
for certain employees of the Company (as defined in subsection 2.1(f)) and
certain consultants to the Company, effective ___________, 2000. The Plan
permits the grant of incentive stock options within the meaning of Section 422
of the Code (as defined in subsection 2.1(d)), non-qualified stock options,
restricted stock awards, stock appreciation rights, stock bonuses, stock units
and other stock grants to certain employees of the Company and to certain
consultants to the Company.
1.2 PURPOSES. The purposes of the Plan are to provide those who are
selected for participation in the Plan with added incentives to continue in the
long-term service of the Company and to create in such persons a more direct
interest in the future success of the operations of the Company by relating
incentive compensation to increases in shareholder value, so that the income of
those participating in the Plan is more closely aligned with the income of the
Company's shareholders. The Plan is also designed to provide a financial
incentive that will help the Company attract, retain and motivate the most
qualified employees and consultants.
1.3 EFFECTIVE DATE. The Plan shall be effective ___________, 2000,
subject to approval by the stockholders of the Company within twelve (12) months
before or after the effective date, in a manner authorized by Section 422 of the
Code. If the stockholders of the Company do not approve the Plan as specified
above, Awards (as defined in subsection 2.1(b)) made under the Plan shall be
deemed to be rescinded without any further action by the Board or the Company,
and the Plan shall automatically terminate.
ARTICLE II
DEFINITIONS
2.1 DEFINITIONS. The following terms shall have the meanings set forth
below:
(a) "AFFILIATED CORPORATION" means any corporation or other entity
that is affiliated with the Company through stock ownership or otherwise and is
designated as an "Affiliated Corporation" by the Board, provided, however, that
for purposes of Incentive Options granted pursuant to the Plan, an "Affiliated
Corporation" means any parent or subsidiary of the Company as defined in Section
424 of the Code.
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(b) "AWARD" means an Option, a Restricted Stock Award, a Stock
Appreciation Right, a Stock Unit, grants of Stock pursuant to Article XI or
other issuances of Stock hereunder.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(e) "COMMITTEE" means a committee consisting of members of the
Board who are empowered hereunder to take actions in the administration of the
Plan. The Committee shall be so constituted at all times as to permit the Plan
to comply with Rule 16b-3 or any successor rule promulgated under the Securities
Exchange Act of 1934 (the "1934 Act") and the requirements of Section 162(m) of
the Code. Except as provided in Section 3.2, the Committee shall select
Participants from Eligible Employees and Eligible Consultants of the Company and
shall determine the awards to be made pursuant to the Plan and the terms and
conditions thereof.
(f) "COMPANY" means SignalSoft Corporation and the Affiliated
Corporations.
(g) "DISABLED" or "DISABILITY" shall have the meaning given to such
terms in Section 22(e)(3) of the Code.
(h) "EFFECTIVE DATE" means the effective date of the Plan,
___________, 2000.
(i) "ELIGIBLE EMPLOYEES" means those employees (including, without
limitation, officers and directors who are also employees) of the Company or any
subsidiary or division thereof, upon whose judgment, initiative and efforts the
Company is, or will become, largely dependent for the successful conduct of its
business. For purposes of the Plan, an employee is any individual who provides
services to the Company or any subsidiary or division thereof as a common law
employee and whose remuneration is subject to the withholding of federal income
tax pursuant to Section 3401 of the Code. Employee shall not include any
individual (A) who provides services to the Company or any subsidiary or
division thereof under an agreement, contract, or any other arrangement pursuant
to which the individual is initially classified as an independent contractor or
(B) whose remuneration for services has not been treated initially as subject to
the withholding of federal income tax pursuant to Section 3401 of the Code even
if the individual is subsequently reclassified as a common law employee as a
result of a final decree of a court of competent jurisdiction or the settlement
of an administrative or judicial proceeding. Leased employees within the meaning
of Section 414(n) of the Code shall not be treated as employees under this Plan.
(j) "ELIGIBLE CONSULTANTS" means those consultants to the Company
who are determined, by the Committee, to be individuals whose services are
important to the Company and who are eligible to receive Awards, other than
Incentive Options, under the Plan.
(k) "FAIR MARKET VALUE" means the average of the mean between the
bid and the asked prices of the Stock or the closing price, as applicable, on
the principal stock exchange or other market on which the Stock is traded, over
the five consecutive trading days ending on a particular date or the value
determined by such other method as the Committee, or the individual or
individuals
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to whom the Committee has delegated authority to grant Awards, may specify at
the time an Award is granted. If the price of the Stock is not reported on any
securities exchange or national market system, the Fair Market Value of the
Stock on a particular date shall be as determined by the Committee. If, upon
exercise of an Option, the exercise price is paid by a broker's transaction as
provided in subsection 7.2(g)(ii)(D), Fair Market Value, for purposes of the
exercise, shall be the price at which the Stock is sold by the broker.
(l) "INCENTIVE OPTION" means an Option designated as such and
granted in accordance with Section 422 of the Code.
(m) "NON-QUALIFIED OPTION" means any Option other than an Incentive
Option.
(n) "OPTION" means a right to purchase Stock at a stated or formula
price for a specified period of time. Options granted under the Plan shall be
either Incentive Options or Non- Qualified Options.
(o) "OPTION CERTIFICATE" shall have the meaning given to such term
in Section 7.2 hereof.
(p) "OPTION HOLDER" means a Participant who has been granted one or
more Options under the Plan.
(q) "OPTION PRICE" means the price at which each share of Stock
subject to an Option may be purchased, determined in accordance with subsection
7.2(b).
(r) "PARTICIPANT" means an Eligible Employee or Eligible Consultant
designated by the Committee from time to time during the term of the Plan to
receive one or more of the Awards provided under the Plan.
(s) "RESTRICTED STOCK AWARD" means an award of Stock granted to a
Participant pursuant to Article VIII that is subject to certain restrictions
imposed in accordance with the provisions of such Section.
(t) "SHARE" means a share of Stock.
(u) "STOCK" means the common stock, par value $0.001 of the
Company.
(v) "STOCK APPRECIATION RIGHT" means the right, granted by the
Committee pursuant to the Plan, to receive a payment equal to the increase in
the Fair Market Value of a Share of Stock subsequent to the grant of such Award.
(w) "STOCK BONUS" means either an outright grant of Stock or a
grant of Stock subject to and conditioned upon certain employment or performance
related goals.
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(x) "STOCK UNIT" means a measurement component equal to the Fair
Market Value of one share of Stock on the date for which a determination is made
pursuant to the provisions of this Plan.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
the masculine gender shall also include the feminine gender, and the definition
of any term herein in the singular shall also include the plural.
ARTICLE III
PLAN ADMINISTRATION
3.1 GENERAL. The Plan shall be administered by the Committee. In
accordance with the provisions of the Plan, the Committee shall, in its sole
discretion, select the Participants from among the Eligible Employees and
Eligible Consultants, determine the Awards to be made pursuant to the Plan, the
number of Stock Units, Stock Appreciation Rights or shares of Stock to be issued
thereunder and the time at which such Awards are to be made, fix the Option
Price, period and manner in which an Option becomes exercisable, establish the
duration and nature of Restricted Stock Award restrictions, establish the terms
and conditions applicable to Stock Bonuses and Stock Units, and establish such
other terms and requirements of the various compensation incentives under the
Plan as the Committee may deem necessary or desirable and consistent with the
terms of the Plan. The Committee shall determine the form or forms of the
agreements with Participants that shall evidence the particular provisions,
terms, conditions, rights and duties of the Company and the Participants with
respect to Awards granted pursuant to the Plan, which provisions need not be
identical except as may be provided herein; provided, however, that Eligible
Consultants shall not be eligible to receive Incentive Options. The Committee
may from time to time adopt such rules and regulations for carrying out the
purposes of the Plan as it may deem proper and in the best interests of the
Company. The Committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or in any agreement entered into hereunder in the
manner and to the extent it shall deem expedient and it shall be the sole and
final judge of such expediency. No member of the Committee shall be liable for
any action or determination made in good faith. The determinations,
interpretations and other actions of the Committee pursuant to the provisions of
the Plan shall be binding and conclusive for all purposes and on all persons.
3.2 DELEGATION BY COMMITTEE. The Committee may, from time to time,
delegate, to specified officers of the Company, the power and authority to grant
Awards under the Plan to specified groups of employees and consultants, subject
to such restrictions and conditions as the Committee, in its sole discretion,
may impose. The delegation shall be as broad or as narrow as the Committee shall
determine. To the extent that the Committee has delegated the authority to
determine certain terms and conditions of an Award, all references in the Plan
to the Committee's exercise of authority in determining such terms and
conditions shall be construed to include the Company's officer or officers to
whom the Committee has delegated the power and authority to make such
determination. The power and authority to grant Awards to any employee or
consultant who is covered by Section 16(b) of the 1934 Act shall not be
delegated by the Committee.
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ARTICLE IV
STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. The maximum aggregate number of Shares that may
be issued under the Plan in accordance with the provisions of the Plan and
subject to such restrictions or other provisions as the Committee may from time
to time deem necessary shall be 3,400,000, subject to the provisions regarding
changes in capital described below. The number of shares as to which options or
other awards may be granted in any calendar year shall be limited to 1,000,000.
Such number shall increase by up to 800,000 shares in each calendar year
thereafter. The maximum number of Shares with respect to which a Participant may
receive Options and Stock Appreciation Rights under the Plan in any calendar
year is 500,000. The maximum number of Shares as to which Incentive Options may
be granted is 3,400,000. The Shares may be either authorized and unissued Shares
or previously issued Shares acquired by the Company. Such maximum numbers may be
increased from time to time by approval of the Board and by the stockholders of
the Company if, in the opinion of counsel for the Company, stockholder approval
is required. The Company shall at all times during the term of the Plan and
while any Options or Stock Units are outstanding retain as authorized and
unissued Stock at least the number of Shares from time to time required under
the provisions of the Plan, or otherwise assure itself of its ability to perform
its obligations hereunder.
4.2 OTHER SHARES OF STOCK. Any shares of Stock that are subject to an
Option that expires or for any reason is terminated unexercised, any shares of
Stock that are subject to an Award (other than an Option) and that are
forfeited, and any shares of Stock withheld for the payment of taxes or received
by the Company as payment of the exercise price of an Option shall automatically
become available for use under the Plan.
4.3 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If the Company
shall at any time increase or decrease the number of its outstanding Shares or
change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or changed
in like manner as if they had been issued and outstanding, fully paid and
nonassessable at the time of such occurrence: (i) the Shares as to which Awards
may be granted under the Plan, (ii) the Shares then included in each outstanding
Award granted hereunder, (iii) the maximum number of Shares available for grant
to any one person in a calendar year, (iv) the maximum number of Shares
available for grant pursuant to Incentive Options, and (v) the number of Shares
subject to a delegation of authority under Section 4.2 of this Plan.
4.4 OTHER DISTRIBUTIONS AND CHANGES IN THE STOCK. If
(a) The Company shall at any time distribute with respect to the
Stock assets or securities of persons other than the Company (excluding cash or
distributions referred to in Section 4.3), or
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(b) The Company shall at any time grant to the holders of its Stock
rights to subscribe pro rata for additional shares thereof or for any other
securities of the Company, or
(c) there shall be any other change (except as described in Section
4.3) in the number or kind of outstanding Shares or of any stock or other
securities into which the Stock shall be changed or for which it shall have been
exchanged,
and if the Committee shall in its discretion determine that the event described
in subsection (a), (b), or (c) above equitably requires an adjustment in the
number or kind of Shares subject to an Option or other Award, an adjustment in
the Option Price or the taking of any other action by the Committee, including
without limitation, the setting aside of any property for delivery to the
Participant upon the exercise of an Option or the full vesting of an Award, then
such adjustments shall be made, or other action shall be taken, by the Committee
and shall be effective for all purposes of the Plan and on each outstanding
Option or Award that involves the particular type of stock for which a change
was effected. Notwithstanding the foregoing provisions of this Section 4.4,
pursuant to Section 8.3 below, a Participant holding Stock received as a
Restricted Stock Award shall have the right to receive all amounts, including
cash and property of any kind, distributed with respect to the Stock after such
Restricted Stock Award was granted upon the Participant's becoming a holder of
record of the Stock.
4.5 GENERAL ADJUSTMENT RULES. No adjustment or substitution provided
for in this Article IV shall require the Company to sell a fractional share of
Stock under any Option, or otherwise issue a fractional share of Stock, and the
total substitution or adjustment with respect to each Option and other Award
shall be limited by deleting any fractional share. In the case of any such
substitution or adjustment, the aggregate Option Price for the total number of
shares of Stock then subject to an Option shall remain unchanged but the Option
Price per share under each such Option shall be equitably adjusted by the
Committee to reflect the greater or lesser number of shares of Stock or other
securities into which the Stock subject to the Option may have been changed, and
appropriate adjustments shall be made to other Awards to reflect any such
substitution or adjustment.
4.6 DETERMINATION BY THE COMMITTEE, ETC. Adjustments under this Article
IV shall be made by the Committee, whose determinations with regard thereto
shall be final and binding upon all parties thereto.
ARTICLE V
CORPORATE REORGANIZATION; CHANGE IN CONTROL
5.1 REORGANIZATION. Except as provided otherwise by the Committee at
the time an Award is granted, upon the occurrence of any of the following
events, if the notice required by Section 5.2 shall have first been given, the
Plan and all Options then outstanding hereunder shall automatically terminate
and be of no further force and effect whatsoever, and other Awards then
outstanding shall be treated as described in Sections 5.2 and 5.3, without the
necessity for any additional notice or other action by the Board or the Company:
(a) the merger or consolidation of the Company with or into another corporation
or other reorganization (other than a reorganization
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under the United States Bankruptcy Code) of the Company (other than a
consolidation, merger, or reorganization in which the Company is the continuing
corporation and which does not result in any reclassification or change of
outstanding shares of Stock); or (b) the sale or conveyance of the property of
the Company as an entirety or substantially as an entirety (other than a sale or
conveyance in which the Company continues as a holding company of an entity or
entities that conduct the business or businesses formerly conducted by the
Company); or (c) the dissolution or liquidation of the Company.
5.2 REQUIRED NOTICE. At least 30 days' prior written notice of any
event described in Section 5.1 shall be given by the Company to each Option
Holder and Participant unless (a) in the case of the events described in clauses
(a) or (b) of Section 5.1, the Company, or the successor or purchaser, as the
case may be, shall make adequate provision for the assumption of the outstanding
Options or the substitution of new options for the outstanding Options on terms
comparable to the outstanding Options except that the Option Holder shall have
the right thereafter to purchase the kind and amount of securities or property
or cash receivable upon such merger, consolidation, other reorganization, sale
or conveyance by a holder of the number of Shares that would have been
receivable upon exercise of the Option immediately prior to such merger,
consolidation, sale or conveyance (assuming such holder of Stock failed to
exercise any rights of election and received per share the kind and amount
received per share by a majority of the non-electing shares), or (b) the
Company, or the successor or purchaser, as the case may be, shall make adequate
provision for the adjustment of outstanding Awards (other than Options) so that
such Awards shall entitle the Participant to receive the kind and amount of
securities or property or cash receivable upon such merger, consolidation, other
reorganization, sale or conveyance by a holder of the number of Shares that
would have been receivable with respect to such Award immediately prior to such
merger, consolidation, other reorganization, sale or conveyance (assuming such
holder of Stock failed to exercise any rights of election and received per share
the kind and amount received per share by a majority of the non-electing
shares). The provisions of this Article V shall similarly apply to successive
mergers, consolidations, reorganizations, sales or conveyances. Such notice
shall be deemed to have been given when delivered personally to a Participant or
when mailed to a Participant by registered or certified mail, postage prepaid,
at such Participant's address last known to the Company.
5.3 ACCELERATION OF EXERCISABILITY. Participants notified in accordance
with Section 5.2 may exercise their Options at any time before the occurrence of
the event requiring the giving of notice (but subject to occurrence of such
event), regardless of whether all conditions of exercise relating to length of
service, attainment of financial performance goals or otherwise have been
satisfied. Upon the giving of notice in accordance with Section 5.2, all
restrictions with respect to Restricted Stock and other Awards shall lapse
immediately, all Stock Units shall become payable immediately and all Stock
Appreciation Rights shall become exercisable. Any Options, Stock Appreciation
Rights or Stock Units that are not assumed or substituted under clauses (a) or
(b) of Section 5.2 that have not been exercised prior to the event described in
Section 5.1 shall automatically terminate upon the occurrence of such event.
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5.4 CHANGE IN CONTROL.
(a) IN GENERAL. Unless provided otherwise by the Committee at the
time of the grant of an Award, upon a change in control of the Company as
defined in subsection 5.4(b), then (i) all Options shall become immediately
exercisable in full during the remaining term thereof, and shall remain so,
whether or not the Participants to whom such Options have been granted remain
employees or consultants of the Company; (ii) all restrictions with respect to
outstanding Restricted Stock Awards shall immediately lapse; (iii) all Stock
Units shall become immediately payable; and (iv) all other Awards shall become
immediately exercisable or shall vest, as the case may be, without any further
action or passage of time.
(b) DEFINITION. For purposes of this Plan, a "change in control"
shall be deemed to have occurred if either (i) any individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company, acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of either (A) the
then- outstanding shares of Stock ("Outstanding Shares") or (B) the combined
voting power of the then- outstanding voting securities of the Company entitled
to vote generally in the election of directors ("Voting Power") or (ii) at any
time during any period of three consecutive years (not including any period
prior to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof.
ARTICLE VI
PARTICIPATION
Participants in the Plan shall be those Eligible Employees who, in the
judgment of the Committee, are performing, or during the term of their incentive
arrangement will perform, important services in the management, operation and
development of the Company, and significantly contribute, or are expected to
contribute, to the achievement of long-term corporate economic objectives.
Eligible Consultants shall be selected from those non-employee consultants to
the Company who are performing services important to the operation and growth of
the Company. Participants may be granted from time to time one or more Awards;
provided, however, that the grant of each such Award shall be separately
approved by the Committee and receipt of one such Award shall not result in
automatic receipt of any other Award. Upon determination by the Committee that
an Award is to be granted to a Participant, written notice shall be given to
such person, specifying the terms, conditions, rights and duties related
thereto. Each Participant shall, if required by the Committee, enter into an
agreement with the Company, in such form as the Committee shall determine and
which is consistent with the provisions of the Plan, specifying such terms,
conditions, rights and duties. Awards shall be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date shall be the
date of any related agreement with
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the Participant. In the event of any inconsistency between the provisions of
the Plan and any such agreement entered into hereunder, the provisions of the
Plan shall govern.
ARTICLE VII
OPTIONS
7.1 GRANT OF OPTIONS. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options. The
Committee in its sole discretion shall designate whether an Option is an
Incentive Option or a Non-Qualified Option; provided, however, that only
Non-Qualified Options may be granted to Eligible Consultants. The Committee may
grant both an Incentive Option and a Non-Qualified Option to an Eligible
Employee at the same time or at different times. Incentive Options and
Non-Qualified Options, whether granted at the same time or at different times,
shall be deemed to have been awarded in separate grants and shall be clearly
identified, and in no event shall the exercise of one Option affect the right to
exercise any other Option or affect the number of shares for which any other
Option may be exercised. An Option shall be considered as having been granted on
the date specified in the grant resolution of the Committee.
7.2 STOCK OPTION CERTIFICATES. Each Option granted under the Plan shall
be evidenced by a written stock option certificate or agreement (an "Option
Certificate"). An Option Certificate shall be issued by the Company in the name
of the Participant to whom the Option is granted (the "Option Holder") and in
such form as may be approved by the Committee. The Option Certificate shall
incorporate and conform to the conditions set forth in this Section 7.2 as well
as such other terms and conditions that are not inconsistent as the Committee
may consider appropriate in each case.
(a) NUMBER OF SHARES. Each Option Certificate shall state that it
covers a specified number of shares of Stock, as determined by the Committee.
(b) PRICE. The price at which each share of Stock covered by an
Option may be purchased shall be determined in each case by the Committee and
set forth in the Option Certificate, but, in the case of an Incentive Option, in
no event shall the price be less than 100 percent of the Fair Market Value of
the Stock on the date the Incentive Option is granted.
(c) DURATION OF OPTIONS; RESTRICTIONS ON EXERCISE. Each Option
Certificate shall state the period of time, determined by the Committee, within
which the Option may be exercised by the Option Holder (the "Option Period").
The Option Period must end, in all cases, not more than ten years from the date
the Option is granted. The Option Certificate shall also set forth any
installment or other restrictions on exercise of the Option during such period,
if any, as may be determined by the Committee. Each Option shall become
exercisable (vest) over such period of time, if any, or upon such events, as
determined by the Committee.
(d) TERMINATION OF SERVICES, DEATH, DISABILITY, ETC. The Committee
may specify the period, if any, during which an Option may be exercised
following termination of the Option Holder's services. The effect of this
subsection 7.2(d) shall be limited to determining the
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consequences of a termination and nothing in this subsection 7.2(d) shall
restrict or otherwise interfere with the Company's discretion with respect to
the termination of any individual's services. If the Committee does not
otherwise specify, the following shall apply:
(i) If the services of the Option Holder are terminated within
the Option Period for "cause", as determined by the Company, the Option shall
thereafter be void for all purposes. As used in this subsection 7.2(d), "cause"
shall mean willful misconduct, a willful failure to perform the Option Holder's
duties, insubordination, theft, dishonesty, conviction of a felony or any other
willful conduct that is materially detrimental to the Company or such other
cause as the Board in good faith reasonably determines provides cause for the
discharge of an Option Holder.
(ii) If the Option Holder becomes Disabled, the Option may be
exercised by the Option Holder within one year following the Option Holder's
termination of services on account of Disability (provided that such exercise
must occur within the Option Period), but not thereafter. In any such case, the
Option may be exercised only as to the shares as to which the Option had become
exercisable on or before the date of the Option Holder's termination of services
because of Disability.
(iii) If the Option Holder dies during the Option Period while
still performing services for the Company or within the one year period referred
to in (ii) above or the three-month period referred to in (iv) below, the Option
may be exercised by those entitled to do so under the Option Holder's will or by
the laws of descent and distribution within one year following the Option
Holder's death, (provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may be exercised only
as to the shares as to which the Option had become exercisable on or before the
date of the Option Holder's death.
(iv) If the services of the Option Holder are terminated
(which for this purpose means that the Option Holder is no longer employed by
the Company or performing services for the Company) by the Company within the
Option Period for any reason other than cause, Disability, or death, the Option
may be exercised by the Option Holder within three months following the date of
such termination (provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may be exercised only
as to the shares as to which the Option had become exercisable on or before the
date of termination of services.
(e) TRANSFERABILITY. In general, each Option shall not be
transferable by the Option Holder except by will or pursuant to the laws of
descent and distribution. Each Option is exercisable during the Option Holder's
lifetime only by him or her, or in the event of Disability or incapacity, by his
or her guardian or legal representative. The Committee may, however, provide at
the time of grant or thereafter that the Option Holder may transfer a
Non-Qualified Option to a member of the Option Holder's immediate family, a
trust of which members of the Option Holder's immediate family are the only
beneficiaries, or a partnership of which members of the Option Holder's
immediate family or trusts for the sole benefit of the Option Holder's immediate
family are the only partners. Immediate family means the Option Holder's spouse,
issue (by birth or adoption), parents, grandparents, and siblings (including
half brothers and sisters and adopted siblings). The Committee may require the
Option Holder and the transferee to enter into an appropriate agreement with the
Company providing for, among other things, the satisfaction of required tax
withholding
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with respect to the exercise of the transferred Option and the satisfaction of
any Stock retention requirements applicable to the Option Holder, together with
such other terms and conditions as may be specified by the Committee. Except to
the extent provided otherwise in such agreement, the transferee shall have all
of the rights of the Option Holder under this Plan; provided that the transferee
shall not have any Stock withheld to pay withholding taxes pursuant to Section
17.2 unless the agreement referred to in the preceding sentence specifically
provides otherwise. During the Option Holder's lifetime the Option Holder may
not transfer an Incentive Option under any circumstances.
(f) CONSIDERATION FOR GRANT OF OPTION. Each Option Holder shall
agree to remain in the employment of the Company or to continue providing
consulting services to the Company, as the case may be, at the pleasure of the
Company, for a continuous period of at least one year after the date the Option
is granted, at the rate of compensation in effect on the date of such agreement
or at such changed rate as may be fixed, from time to time, by the Company.
Nothing in this paragraph shall limit or impair the Company's right to terminate
the employment of any employee or to terminate the consulting services of any
consultant.
(g) EXERCISE, PAYMENTS, ETC.
(i) MANNER OF EXERCISE. The method for exercising each Option
granted hereunder shall be by delivery to the Company of written notice
specifying the number of Shares with respect to which such Option is exercised.
The purchase of such Shares shall take place at the principal offices of the
Company within thirty days following delivery of such notice, at which time the
Option Price of the Shares shall be paid in full by any of the methods set forth
below or a combination thereof. Except as set forth in the next sentence, the
Option shall be exercised when the Option Price for the number of shares as to
which the Option is exercised is paid to the Company in full. If the Option
Price is paid by means of a broker's loan transaction described in subsection
7.2(g)(ii)(D), in whole or in part, the closing of the purchase of the Stock
under the Option shall take place (and the Option shall be treated as exercised)
on the date on which, and only if, the sale of Stock upon which the broker's
loan was based has been closed and settled, unless the Option Holder makes an
irrevocable written election, at the time of exercise of the Option, to have the
exercise treated as fully effective for all purposes upon receipt of the Option
Price by the Company regardless of whether or not the sale of the Stock by the
broker is closed and settled. A properly executed certificate or certificates
representing the Shares shall be delivered to or at the direction of the Option
Holder upon payment therefor. If Options on less than all shares evidenced by an
Option Certificate are exercised, the Company shall deliver a new Option
Certificate evidencing the Option on the remaining shares upon delivery of the
Option Certificate for the Option being exercised, will otherwise provide
documentation with respect to the portion of the Option that remains available
for exercise.
(ii) The exercise price shall be paid by any of the following
methods or any combination of the following methods at the election of the
Option Holder, or by any other method approved by the Committee upon the request
of the Option Holder:
(A) in cash or by wire transfer;
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(B) by certified check, cashier's check or other check
acceptable to the Company, payable to the order of the Company;
(C) by delivery to the Company of certificates
representing the number of shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the Stock purchased pursuant
to the Option, properly endorsed for transfer to the Company; provided however,
that no Option may be exercised by delivery to the Company of certificates
representing Stock, unless such Stock has been held by the Option Holder for
more than six months; for purposes of this Plan, the Fair Market Value of any
shares of Stock delivered in payment of the purchase price upon exercise of the
Option shall be the Fair Market Value as of the exercise date; the exercise date
shall be the day of delivery of the certificates for the Stock used as payment
of the Option Price; or
(D) by delivery to the Company of a properly executed
notice of exercise together with irrevocable instructions to a broker to deliver
to the Company promptly the amount of the proceeds of the sale of all or a
portion of the Stock or of a loan from the broker to the Option Holder required
to pay the Option Price.
(h) DATE OF GRANT. An Option shall be considered as having been
granted on the date specified in the grant resolution of the Committee.
(i) WITHHOLDING.
(i) Non-Qualified Options. Upon exercise of an Option, the
Option Holder shall make appropriate arrangements with the Company to provide
for the amount of additional withholding required by Sections 3102 and 3402 of
the Code and applicable state income tax laws, including payment of such taxes
through delivery of shares of Stock or by withholding Stock to be issued under
the Option, as provided in Article XVII.
(ii) Incentive Options. If an Option Holder makes a
disposition (as defined in Section 424(c) of the Code) of any Stock acquired
pursuant to the exercise of an Incentive Option prior to the expiration of two
years from the date on which the Incentive Option was granted or prior to the
expiration of one year from the date on which the Option was exercised, the
Option Holder shall send written notice to the Company at the Company's
principal place of business of the date of such disposition, the number of
shares disposed of, the amount of proceeds received from such disposition and
any other information relating to such disposition as the Company may reasonably
request. The Option Holder shall, in the event of such a disposition, make
appropriate arrangements with the Company to provide for the amount of
additional withholding, if any, required by Sections 3102 and 3402 of the Code
and applicable state income tax laws.
7.3 RESTRICTIONS ON INCENTIVE OPTIONS.
(a) INITIAL EXERCISE. The aggregate Fair Market Value of the Shares
with respect to which Incentive Options are exercisable for the first time by an
Option Holder in any calendar year, under the Plan or otherwise, shall not
exceed $100,000. For this purpose, the Fair Market Value of the Shares shall be
determined as of the date of grant of the Option.
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(b) TEN PERCENT STOCKHOLDERS. Incentive Options granted to an
Option Holder who is the holder of record of 10% or more of the outstanding
Stock of the Company shall have an Option Price equal to 110% of the Fair Market
Value of the Shares on the date of grant of the Option and the Option Period for
any such Option shall not exceed five years.
7.4 SHAREHOLDER PRIVILEGES. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the holder
of record of such Stock, except as provided in Article IV.
ARTICLE VIII
RESTRICTED STOCK AWARDS
8.1 GRANT OF RESTRICTED STOCK AWARDS. Coincident with or following
designation for participation in the Plan, the Committee may grant a Participant
one or more Restricted Stock Awards consisting of Shares of Stock. The number of
Shares granted as a Restricted Stock Award shall be determined by the Committee.
8.2 RESTRICTIONS. A Participant's right to retain a Restricted Stock
Award granted to him under Section 8.1 shall be subject to such restrictions,
including but not limited to his continuous employment by or performance of
services for the Company for a restriction period specified by the Committee or
the attainment of specified performance goals and objectives, as may be
established by the Committee with respect to such Award. The Committee may in
its sole discretion require different periods of service or different
performance goals and objectives with respect to different Participants, to
different Restricted Stock Awards or to separate, designated portions of the
Shares constituting a Restricted Stock Award. In the event of the death or
Disability of a Participant, or the retirement of a Participant in accordance
with the Company's established retirement policy, all required periods of
service and other restrictions applicable to Restricted Stock Awards then held
by him shall lapse with respect to a pro rata part of each such Award based on
the ratio between the number of full months of employment or services completed
at the time of termination of services from the grant of each Award to the total
number of months of employment or continued services required for such Award to
be fully nonforfeitable, and such portion of each such Award shall become fully
nonforfeitable. The remaining portion of each such Award shall be forfeited and
shall be immediately returned to the Company. If a Participant's employment or
consulting services terminate for any other reason, any Restricted Stock Awards
as to which the period for which services are required or other restrictions
have not been satisfied (or waived or accelerated as provided herein) shall be
forfeited, and all shares of Stock related thereto shall be immediately returned
to the Company.
8.3 PRIVILEGES OF A STOCKHOLDER, TRANSFERABILITY. A Participant shall
have all voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him as a Restricted Stock Award under this
Article VIII upon his becoming the holder of record of
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such Stock; provided, however, that the Participant's right to sell, encumber,
or otherwise transfer such Stock shall be subject to the limitations of Section
13.2.
8.4 ENFORCEMENT OF RESTRICTIONS. The Committee shall cause a legend to
be placed on the Stock certificates issued pursuant to each Restricted Stock
Award referring to the restrictions provided by Sections 8.2 and 8.3 and, in
addition, may in its sole discretion require one or more of the following
methods of enforcing the restrictions referred to in Sections 8.2 and 8.3:
(a) Requiring the Participant to keep the Stock certificates, duly
endorsed, in the custody of the Company while the restrictions remain in effect;
or
(b) Requiring that the Stock certificates, duly endorsed, be held
in the custody of a third party while the restrictions remain in effect.
ARTICLE IX
STOCK UNITS
A Participant may be granted a number of Stock Units determined by the
Committee. The number of Stock Units, the goals and objectives to be satisfied
with respect to each grant of Stock Units, the time and manner of payment for
each Stock Unit, and the other terms and conditions applicable to a grant of
Stock Units shall be determined by the Committee.
ARTICLE X
STOCK APPRECIATION RIGHTS
10.1 PERSONS ELIGIBLE. The Committee, in its sole discretion, may grant
Stock Appreciation Rights to Eligible Employees or Eligible Consultants.
10.2 TERMS OF GRANT. The Committee shall determine at the time of the
grant of a Stock Appreciation Right the time period during which the Stock
Appreciation Right may be exercised and any other terms that shall apply to the
Stock Appreciation Right.
10.3 EXERCISE. A Stock Appreciation Right shall entitle a Participant
to receive a number of shares of Stock (without any payment to the Company,
except for applicable withholding taxes), cash, or Stock and cash, as determined
by the Committee in accordance with Section 10.4 below. If a Stock Appreciation
Right is issued in tandem with an Option, except as may otherwise be provided by
the Committee, the Stock Appreciation Right shall be exercisable during the
period that its related Option is exercisable. A Participant desiring to
exercise a Stock Appreciation Right shall give written notice of such exercise
to the Company, which notice shall state the proportion of Stock and cash that
the Participant desires to receive pursuant to the Stock Appreciation Right
exercised. Upon receipt of the notice from the Participant, the Company shall
deliver to the person entitled thereto (i) a certificate or certificates for
Stock and/or (ii) a cash payment, in accordance with Section
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10.4 below. The date the Company receives written notice of such exercise
hereunder is referred to in this Article X as the "exercise date". The delivery
of Stock or cash received pursuant to such exercise shall take place at the
principal offices of the Company within 30 days following delivery of such
notice.
10.4 NUMBER OF SHARES OR AMOUNT OF CASH. Subject to the discretion of
the Committee to substitute cash for Stock, or Stock for cash, the number of
Shares that may be issued pursuant to the exercise of a Stock Appreciation Right
shall be determined by dividing: (a) the total number of Shares of Stock as to
which the Stock Appreciation Right is exercised, multiplied by the amount by
which the Fair Market Value of one Share of Stock on the exercise date exceeds
the Fair Market Value of one Share of Stock on the date of grant, by (b) the
Fair Market Value of one Share of Stock on the exercise date; provided, however,
that fractional Shares shall not be issued and in lieu thereof, a cash
adjustment shall be paid. In lieu of issuing Stock upon the exercise of a Stock
Appreciation Right, the Committee in its sole discretion may elect to pay the
cash equivalent of the Fair Market Value of the Stock on the exercise date for
any or all of the Shares of Stock that would otherwise be issuable upon exercise
of the Stock Appreciation Right.
10.5 EFFECT OF EXERCISE. If a Stock Appreciation Right is issued in
tandem with an Option, the exercise of the Stock Appreciation Right or the
related Option will result in an equal reduction in the number of corresponding
Options or Stock Appreciation Rights that were granted in tandem with such Stock
Appreciation Rights and Options.
10.6 TERMINATION OF SERVICES. Upon the termination of the services of a
Participant, any Stock Appreciation Rights then held by such Participant shall
be exercisable within the time periods, and upon the same conditions with
respect to the reasons for termination of services, as are specified in Section
7.2(d) with respect to Options.
ARTICLE XI
STOCK BONUSES
The Committee may award Stock Bonuses to such Participants, subject to
such conditions and restrictions, as it determines in its sole discretion. Stock
Bonuses may be either outright grants of Stock, or may be grants of Stock
subject to and conditioned upon certain employment or performance related goals.
ARTICLE XII
OTHER COMMON STOCK GRANTS
From time to time during the duration of this Plan, the Board may, in
its sole discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock,
whether by purchase, outright grant, or otherwise. Any
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such arrangements shall be subject to the general provisions of this Plan and
all shares of Stock issued pursuant to such arrangements shall be issued under
this Plan.
ARTICLE XIII
RIGHTS OF PARTICIPANTS
13.1 SERVICE. Nothing contained in the Plan or in any Option, or other
Award granted under the Plan shall confer upon any Participant any right with
respect to the continuation of his employment by, or consulting relationship
with, the Company, or interfere in any way with the right of the Company,
subject to the terms of any separate employment agreement or other contract to
the contrary, at any time to terminate such services or to increase or decrease
the compensation of the Participant from the rate in existence at the time of
the grant of an Award. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of service shall
be determined by the Committee at the time.
13.2 NONTRANSFERABILITY. Except as provided otherwise at the time of
grant or thereafter, no right or interest of any Participant in an Option, a
Stock Appreciation Right, a Restricted Stock Award (prior to the completion of
the restriction period applicable thereto), a Stock Unit, or other Award granted
pursuant to the Plan, shall be assignable or transferable during the lifetime of
the Participant, either voluntarily or involuntarily, or subjected to any lien,
directly or indirectly, by operation of law, or otherwise, including execution,
levy, garnishment, attachment, pledge or bankruptcy. In the event of a
Participant's death, a Participant's rights and interests in Options, Stock
Appreciation Rights, Restricted Stock Awards, other Awards, and Stock Units
shall, to the extent provided in Articles VII, VIII, IX, X and XI, be
transferable by will or the laws of descent and distribution, and payment of any
amounts due under the Plan shall be made to, and exercise of any Options may be
made by, the Participant's legal representatives, heirs or legatees.
Notwithstanding the foregoing, the Option Holder may not transfer an Incentive
Option during the Option Holder's lifetime. If in the opinion of the Committee a
person entitled to payments or to exercise rights with respect to the Plan is
disabled from caring for his affairs because of mental condition, physical
condition or age, payment due such person may be made to, and such rights shall
be exercised by, such person's guardian, conservator or other legal personal
representative upon furnishing the Committee with evidence satisfactory to the
Committee of such status.
13.3 NO PLAN FUNDING. Obligations to Participants under the Plan will
not be funded, trusteed, insured or secured in any manner. The Participants
under the Plan shall have no security interest in any assets of the Company, and
shall be only general creditors of the Company.
ARTICLE XIV
GENERAL RESTRICTIONS
14.1 INVESTMENT REPRESENTATIONS. The Company may require any person to
whom an Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit, or
Stock Bonus is granted,
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as a condition of exercising such Option or Stock Appreciation Right, or
receiving such Restricted Stock Award, Stock Unit, or Stock Bonus, to give
written assurances in substance and form satisfactory to the Company and its
counsel to the effect that such person is acquiring the Stock for his own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with Federal and applicable state
securities laws. Legends evidencing such restrictions may be placed on the Stock
certificates.
14.2 COMPLIANCE WITH SECURITIES LAWS. Each Option, Stock Appreciation
Right, Restricted Stock Award, Stock Unit, and Stock Bonus grant shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
to such Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit, or
Stock Bonus grant upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance or purchase of
shares thereunder, such Option, Stock Appreciation Right, Restricted Stock
Award, Stock Unit or Stock Bonus grant may not be accepted or exercised in whole
or in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained on conditions acceptable to the Committee.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration or qualification.
14.3 CHANGES IN ACCOUNTING RULES. Except as provided otherwise at the
time an Award is granted, notwithstanding any other provision of the Plan to the
contrary, if, during the term of the Plan, any changes in the financial or tax
accounting rules applicable to Options, Stock Appreciation Rights, Restricted
Stock Awards, Stock Units or other Awards shall occur which, in the sole
judgment of the Committee, may have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify as necessary, any then outstanding and unexercised
Options, Stock Appreciation Rights, outstanding Restricted Stock Awards,
outstanding Stock Units and other outstanding Awards as to which the applicable
services or other restrictions have not been satisfied.
ARTICLE XV
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by a Participant
as a result of the exercise of an Option or Stock Appreciation Right, the sale
of shares received upon such exercise, the vesting of any Restricted Stock
Award, receipt of Stock Bonuses, distributions with respect to Stock Units, or
the grant of Stock shall not constitute "earnings" or "compensation" with
respect to which any other employee benefits of such employee are determined,
including without limitation benefits under any pension, profit sharing, 401(k),
life insurance or salary continuation plan.
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ARTICLE XVI
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or
modify the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the shareholders
if shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that shareholder approval is otherwise necessary or
desirable.
No amendment, modification or termination of the Plan shall in any
manner adversely affect any Options, Stock Appreciation Rights, Restricted Stock
Awards, Stock Units, Stock Bonuses or other Award theretofore granted under the
Plan, without the consent of the Participant holding such Options, Stock
Appreciation Rights, Restricted Stock Awards, Stock Units, Stock Bonuses or
other Awards.
ARTICLE XVII
WITHHOLDING
17.1 WITHHOLDING REQUIREMENT. The Company's obligations to deliver
shares of Stock upon the exercise of any Option, or Stock Appreciation Right,
the vesting of any Restricted Stock Award, payment with respect to Stock Units,
or the grant of Stock shall be subject to the Participant's satisfaction of all
applicable federal, state and local income and other tax withholding
requirements.
17.2 WITHHOLDING WITH STOCK. At the time the Committee grants an
Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit, Stock
Bonus, other Award, or Stock or at any time thereafter, it may, in its sole
discretion, grant the Participant an election to pay all such amounts of tax
withholding, or any part thereof, by electing (a) to have the Company withhold
from shares otherwise issuable to the Participant, shares of Stock having a
value equal to the amount required to be withheld or such lesser amount as may
be elected by the Participant; provided however, that the amount of Stock so
withheld shall not exceed the minimum amount required to be withheld under the
method of withholding that results in the smallest amount of withholding, or (b)
to transfer to the Company a number of shares of Stock that were acquired by the
Participant more than six months prior to the transfer to the Company and that
have a value equal to the amount required to be withheld or such lesser amount
as may be elected by the Participant. All elections shall be subject to the
approval or disapproval of the Committee. The value of shares of Stock to be
withheld shall be based on the Fair Market Value of the Stock on the date that
the amount of tax to be withheld is to be determined (the "Tax Date"). Any such
elections by Participants to have shares of Stock withheld for this purpose will
be subject to the following restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
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(c) If the Participant is an officer or director of the
Company within the meaning of Section 16 of the 1934 Act ("Section 16"), the
Participant must satisfy the requirements of such Section 16 and any applicable
Rules thereunder with respect to the use of Stock to satisfy such tax
withholding obligation.
ARTICLE XVIII
REQUIREMENTS OF LAW
18.1 REQUIREMENTS OF LAW. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
18.2 FEDERAL SECURITIES LAW REQUIREMENTS. If a Participant is an
officer or director of the Company within the meaning of Section 16, Awards
granted hereunder shall be subject to all conditions required under Rule 16b-3,
or any successor rule promulgated under the 1934 Act, to qualify the Award for
any exception from the provisions of Section 16(b) of the 1934 Act available
under that Rule. Such conditions shall be set forth in the agreement with the
Participant which describes the Award or other document evidencing or
accompanying the Award.
18.3 GOVERNING LAW. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.
ARTICLE XIX
DURATION OF THE PLAN
Unless sooner terminated by the Board of Directors, the Plan shall
terminate at the close of business on the tenth anniversary of the Effective
Date, and no Option, Stock Appreciation Right, Restricted Stock Award, Stock
Unit, Stock Bonus, other Award or Stock shall be granted, or offer to purchase
Stock made, after such termination. Options, Stock Appreciation Rights,
Restricted Stock Awards, other Awards, and Stock Units outstanding at the time
of the Plan termination may continue to be exercised, or become free of
restrictions, or paid, in accordance with their terms.
Dated:_________________, 2000
SIGNALSOFT CORPORATION
By:_______________________________________
