<PAGE> 1
EXHIBIT 10.5
TRIVERGENT CORPORATION
AMENDED AND RESTATED EMPLOYEE INCENTIVE PLAN
(June 21, 2000)
1.Purpose. The purpose of the TriVergent Corporation Employee
Incentive Plan (formerly known as the "State Communications Employee Incentive
Plan") is to provide additional incentives to employees and others to advance
the interest of State Communications, Inc., which may be renamed TriVergent
Corporation and reincorporated as a Delaware corporation (in either case,
referred to herein as "TriVergent"), and to enable TriVergent to attract and
retain the services of other highly competent employees and others.
2. Eligibility. Qualified Options and Non-qualified Options
(collectively, "Options") and Bonus Stock Awards and Restricted Stock Awards
(collectively, "Awards") hereunder may be granted to employees of TriVergent or
any subsidiary or affiliate of TriVergent. Non-qualified Options hereunder may
also be granted any others that the Board of Directors, in its sole discretion,
shall determine. The Board of Directors, in its sole discretion, shall also
determine the nature of the Options and Restricted Stock Awards to be granted
and the terms and provisions of such Restricted Stock Awards and Options,
subject to the limitations set forth in this Plan.
3. Amount of Stock. Options and/or Awards for no more than 10,000,000
shares of TriVergent common stock ("Common Stock") may be granted pursuant to
this Plan. In the event that any Options or Awards granted under this Plan shall
terminate, expire or be canceled, new Options or Awards may be granted with
respect to the shares covered by such Options or Awards. However, to the extent
that Options or other Awards granted under this Plan are exercised or become
vested, respectively, the stock available for grant under the Plan shall be
reduced. The aggregate number of shares of Common Stock that may be subject to
Qualified Options is 10,000,000, subject to any adjustment as provided in
Section 5(g). The maximum number of shares of Common Stock that may be subject
to Options granted to any individual during a calendar year may not exceed
2,000,000 shares, subject to adjustment as provided in Section 5(g).
4. Administration of Plan. This Plan shall be administered by the
TriVergent Board of Directors ("Board of
<PAGE> 2
Directors"); provided that in the event that the shares of Common Stock of
TriVergent become listed on a national stock exchange, this Plan shall be
administered by a committee (the "Committee") which shall consist solely of
individuals each of whom qualify as (i) an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and the regulations issued thereunder or (ii) a
"nonemployee director" within the meaning of Rule 16b-3(b)(3)(i) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the express provisions of the Plan, the Board (or the Committee)
shall have plenary authority, in its discretion, to administer the Plan and to
exercise all powers and authority either specifically granted to it under the
Plan or necessary and advisable in the administration of the Plan, including,
without limitation, the authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms of
all Options and Awards granted under the Plan (which need not be identical), the
purchase price of the shares covered by each award, the individuals to whom and
the time or times at which award shall be granted, whether an award shall be a
Qualified Option, a Non-qualified Option, Bonus Stock Award or Restricted Stock
Award and the number of shares covered by each award; and to make all other
necessary or advisable determinations with respect to the Plan. The
determination of the Board (or the Committee) on such matters shall be
conclusive. The Committee shall have the right at any time to delegate to the
person then serving as TriVergent's chief executive officer its authority to
take any permitted action under the Plan provided that (i) such action is not
otherwise required to be taken by a "nonemployee director" or an "outside
director" in order to comply either with Section 162(m) of the Internal Revenue
Code or with Rule 16b-3 of the Exchange Act, respectively, and (ii) such person
shall not have the right under any circumstance to grant Options to himself or
herself.
5. Terms and Conditions of Options intended to Qualify as Incentive
Stock Options Under the Internal Revenue Code. ("Qualified Options"). All
Qualified Options approved for grant by the Board of Directors shall be
evidenced by written stock option agreements in such form as the Board of
Directors may designate. Each such agreement shall incorporate the terms of this
Plan and shall also be subject to the provisions of the Internal Revenue Code
applicable to "incentive stock options", as that term is defined in Section 422
of the Internal Revenue Code. Each Qualified Option shall be subject to the
following terms and conditions, in addition to such other terms and conditions
as the Board of Directors may deem advisable:
2
<PAGE> 3
(a) Option Price. The option price for each share of
TriVergent Common Stock under a Qualified Option shall not be less than the fair
market value ("Fair Market Value") of such share on the date that the Qualified
Option is granted; provided, however, that a Qualified Option granted to an
employee who is a ten (10%) percent or more shareholder of TriVergent shall not
be less than one hundred and ten (110%) percent of the Fair Market Value of such
share on such date. Prior to the date on which TriVergent becomes listed on a
national stock exchange, unless the Board of Directors determines that an
appraisal by an independent appraiser must be made as of the date the Qualified
Option is granted, Fair Market Value shall be the most recent valuation of
Common Stock made for general stock transaction purposes. On and after the date
TriVergent becomes listed on a national stock exchange, Fair Market Value shall
be the average of the high and the low sales prices of a share of Common Stock
on the date of grant (or, if not a trading day, on the last preceding trading
day) as reported on the principal stock exchange on which the Common Stock is
then listed or traded. If a Qualified Option is granted after the fiscal year
end of TriVergent, but before the valuation as of such date is received, the
option price shall be determined when such valuation is received by TriVergent.
Each option agreement shall state the number of shares to which it pertains and
the option price of such shares.
(b) Option Period. The option agreement shall set forth the
period for which each Qualified Option is granted. It is anticipated that
Qualified Options shall be exercisable with respect to twenty (20%) percent of
the shares covered by such Qualified Option on each anniversary date of the
grant of such shares, beginning with the first anniversary date of such grant,
and shall be exercisable with respect to one hundred (100%) percent of the
shares covered by such Qualified Option after the expiration of five (5) years
from the date of grant. The Board of Directors shall have the discretion to vary
the schedule pursuant to which such Qualified Options shall be exercisable,
provided, that no Qualified Option shall be exercisable after the expiration of
(i) ten (10) years from the date of grant, with respect to an employee who is
less than a ten (10%) percent shareholder of TriVergent, or (ii) five (5) years
from the date of grant with respect to an employee who is a ten (10%) percent or
more shareholder of TriVergent.
If the employee dies while in the employ of TriVergent, Qualified
Options granted under this Plan may be exercised in
3
<PAGE> 4
whole or in part, but only to the extent that the employee would have been
entitled to exercise them if he had been living, for a period that does not
exceed the lesser of (i) the remaining term of such Qualified Option, or (ii)
nine (9) months after the employee's death. Any Qualified Options not exercised
within such period shall expire. Such Qualified Options may be exercised by the
executor or administrator of the employee's TriVergent or such other person as
the employee may designate in his will.
If the employee terminates employment with TriVergent for any reason
other than death, Qualified Options may be exercised in whole or in part, but
only to the extent vested at the employee's termination for a period that does
not exceed the lesser of (i) the remaining term of such Qualified Option or (ii)
ninety (90) days after the employee's termination.
(c) Assignability. A Qualified Option granted pursuant to this
Plan shall be exercisable only by the employee to whom it is granted and shall
not be assignable by him otherwise than by will or by the laws of descent and
distribution.
(d) Manner of Exercise. The Board of Directors may impose such
conditions and restrictions upon the exercise of Qualified Options as it may
deem advisable. Payment shall be made in cash or, unless otherwise prohibited in
the applicable stock option agreement, in shares of Common Stock already owned
by the holder of the option or partly in cash and partly in such shares;
provided, however, that if shares of Common Stock are to be used to satisfy the
exercise price, such shares shall have been acquired (i) at least six months
prior to the exercise date or (ii) in an open market purchase price. No shares
may be issued until full payment of the purchase price therefor has been made.
The options, to the extent vested, shall be exercisable in whole at any time or
in part from the time to time during the term of the option, but not as to less
than 100 shares (or the shares then purchasable under the option if less than
100 shares) remain available for purchase. In addition, it shall be a condition
to the obligation of TriVergent to issue or transfer shares of stock upon
exercise of a Qualified Option or upon the disposition of shares acquired
pursuant to a Qualified Option that the employee pay to TriVergent, upon its
demand, such amount as may be requested by TriVergent in order to satisfy its
obligation to withhold Federal and state income taxes with respect to such
disposition. The taxable value of the Qualified Option at the time of
disposition shall be reported to the
4
<PAGE> 5
Internal Revenue Service for the year in which disposition occurs.
(e) Rights as a Shareholder. The holder of a Qualified Option
granted under this Plan shall not by reason thereof have any right as a
shareholder until shares of Common Stock are issued to him or her.
(f) Restrictions Upon Shares Issued Pursuant to Qualified
Options. Prior to an initial public offering by TriVergent shares of Common
Stock ("IPO"), all shares issued pursuant to the exercise of Qualified Options
granted hereunder shall be subject to the following restrictions, and
certificates evidencing such shares shall be appropriately legended to give
notice of such restrictions:
(i) If such shares are issued to an employee of TriVergent
and such employee's employment is terminated for any reason,
then, and any time within six (6) months after the
termination of such employee's employment, TriVergent may,
at its option, require such employee to sell all or any
portion of such shares to TriVergent at their then fair
market value, as defined in Section 5.(a) hereof.
(ii) All shares acquired pursuant to Qualified Options
hereunder shall be subject to a right of first refusal in
favor of TriVergent and may not be sold, assigned or
otherwise transferred unless first offered to TriVergent on
the same terms and conditions.
These restrictions will cease and no longer be effective on and after
the date of an IPO.
(g) Adjustment in the Event of Change in Stock. In the event
of any change in the outstanding stock of TriVergent by reason of stock
dividend, stock split, recapitalization, reorganization, merger, split up or the
like, the number and kind of shares under outstanding option agreements pursuant
to this Plan and the option price as well as the maximum number of shares of
Common Stock that may be granted under the Plan, the maximum number of shares of
Common Stock that may be subject to Qualified Options and the maximum number of
shares of Common Stock that may be subject to options granted to any individual
during a calendar year shall be appropriately adjusted as determined by the
Board
5
<PAGE> 6
of Directors, in its discretion, so as to preserve, but not increase, the
benefits to the holders of such Qualified Options.
(i) Prohibition of Tandem Options. No grant of tandem stock
options may be made, nor may Qualified Options and Non-qualified Options be
granted under any sort of arrangement where the exercise of one affects the
right to exercise the other.
(j) The aggregate fair market value (determined as of the time
the option is granted) of the stock with respect to which Qualified Options are
exercisable for the first time by a holder during any calendar year (under all
such plans of TriVergent and its subsidiary corporations) shall not exceed One
Hundred Thousand Dollars ($100,000). In the event that this limit is exceeded,
any option that was intended to constitute a Qualified Option that and which is
in excess of this limitation shall automatically be converted into a
Non-qualified Option.
(6) Terms and Conditions of Non-qualified Options. All Non-qualified
Options approved for grant by the Board of Directors shall be evidenced by
written stock option agreements in such form as the Board of Directors may
designate. Each such option agreement shall incorporate the terms of this Plan
and shall be subject to the following terms and conditions, in addition to such
other terms and conditions as the Board of Directors may deem advisable:
(a) Option Price. The option price for each share of
TriVergent Common Stock under a Non-qualified Option shall be the fair market
value of such share, as defined in Section 5(a) hereof, subject to the authority
of the Board of Directors to designate an option price either less than or more
than such Fair Market Value; provided, however, that in no event will the option
price be less than 85% of the Fair Market Value of a share of Common Stock on
the date of grant.
(b) Option Period. The option agreement shall set forth the
period for which each Non-qualified Option is issued. In general, subject to the
discretion of the Board of Directors to set some other period, a Non-qualified
Option may be exercised with respect to twenty (20%) percent of the shares
covered by such Non-qualified Option on each anniversary date of the grant of
such shares, beginning with the first anniversary date of such grant, and shall
be exercisable with respect to one hundred (100%) percent of the shares covered
by such Non-qualified Option after the expiration of five (5) years from the
date of grant. If the employee ceases to be employed by TriVergent, all of that
6
<PAGE> 7
employee's Non-Qualified Options that have become exercisable according to the
terms of this Plan shall be exercisable for a period of sixty (60) days
following the date of termination of the employee's employment after which time
they shall expire.
(c) Assignability. Unless the Board (or the Committee) shall
otherwise determine, Non-qualified Options may not be transferred other than by
will or by the laws of descent and distribution. The designation of a
beneficiary by an optionee shall not constitute a transfer. With the approval of
the Board (or the Committee), a nonqualified stock option may be transferred by
gift to any member of the optionee's immediate family or a trust established for
such family members. For the purposes of this Section 6(c), "immediate family"
shall mean the spouse, children and grandchildren, parents, grandparents, form
spouses, siblings, nieces, nephews, parents-in-law, sons-in-law,
daughters-in-law, brothers-in-law, sisters-in-law, including adoptive or step
relationships and any person sharing the employee's household (other than as
tenant or employee).
(d) Manner of Exercise. The Board of Directors may impose such
conditions and restrictions upon the exercise of Non-qualified Options as it may
deem advisable. Payment shall be made as provided in Section 5(d). In addition,
it shall be a condition to the obligation of TriVergent to issue or transfer
shares of stock upon grant of a Non-qualified Option, upon exercise of a
Non-qualified Option or upon the disposition of shares acquired pursuant to a
Non-qualified Option that the individual pay to TriVergent, upon its demand,
such amount as may be requested by TriVergent in order to satisfy its obligation
to withhold Federal and state income taxes with respect to such grant, exercise
or disposition. The taxable value of the Non-qualified Option at the time of
grant, exercise or disposition, as the case may be, shall be reported to the
Internal Revenue Service for the year in which grant, exercise or disposition
occurs.
(e) Rights as a Shareholder. The holder of a Non-qualified
Option granted under this Plan shall not by reason thereof have any right as a
shareholder until shares of Common Stock are issued to him or her.
(f) Restrictions Upon Shares Issued Pursuant to Non-qualified
Options. Prior to an IPO, all shares issued pursuant to the exercise of
Non-qualified Options granted hereunder shall be subject to the following
restriction, and certificates evidencing such shares shall be appropriately
legended to give
7
<PAGE> 8
notice of such restrictions:
(i) If such shares are issued to an employee of TriVergent
and such employee holder's employment is terminated for any
reason, or if such shares are issued to a holder who is not
an employee of TriVergent, then, at any time within six (6)
months after the termination of such employee holder's
employment or at any time within six (6) months after such
issuance of shares to a non-employee holder, TriVergent may,
at its option, require such holder to sell all or any
portion of such shares to TriVergent at their then Fair
Market Value, as defined in Section 5.(a) hereof.
(ii) All shares acquired pursuant to Non-qualified Options
hereunder shall be subject to a right of first refusal in
favor of TriVergent and may not be sold, assigned or
otherwise transferred unless first offered to TriVergent on
the same terms and conditions.
These restrictions will cease and no longer be effective on and after
the date of an IPO.
(g) Adjustment in the Event of Change in Stock. In the event
of any change in the outstanding stock of TriVergent by reason of stock
dividend, stock split, recapitalization, reorganization, merger, split up or the
like, the number and kind of shares under outstanding option agreements pursuant
to this Plan and the option price shall be appropriately adjusted by the Board
of Directors, in its discretion, so as to preserve, but not increase, the
benefits to the holders of such Non-qualified Options.
7. Terms and Conditions of Restricted Stock Awards. Each share of
Restricted Stock which may be awarded to an employee shall be subject to the
following terms and conditions, in addition to such other terms and conditions
as the Board of Directors may deem advisable:
(a) Price. Shares of Restricted Stock may be sold to employees
for such price as the Board of Directors may determine or may be awarded for no
consideration other than the employee's past and future services or other
considerations, as the Board of Directors, in its sole discretion, shall deem
appropriate.
8
<PAGE> 9
(b) Risk of Forfeiture. All shares of Restricted Stock shall
be forfeited and returned to TriVergent for cancellation if the employee ceases
to be employed by TriVergent for any reason prior to the scheduled lapse of such
risk of forfeiture as provided by the Board of Directors. Upon making any grant
of Restricted Stock, the Board of Directors shall determine the schedule for
lapse of such risk of forfeiture, which is anticipated to call for a lapse of
the risk of forfeiture with respect to twenty (20%) percent of such shares on
each anniversary of the grant of such shares, beginning with the first
anniversary of such grant, until none of such shares are subject to such risk of
forfeiture. The Board of Directors, however, shall have complete discretion to
determine the manner in which such risk of forfeiture shall lapse.
(c) Assignability. No shares of Restricted Stock shall be
sold, assigned or transferred by an employee so long as it remains subject to a
risk of forfeiture hereunder.
(d) Rights as a Shareholder. A grantee, as owner of Restricted
Stock, shall have the right to vote such shares and to receive all dividends,
cash or stock, paid or delivered thereon. Such shares, however, may not be sold,
assigned, pledged, hypothecated or otherwise transferred prior to the vesting of
such shares.
(e) Buy Back and Right of First Refusal. If an employee leaves
the employ of TriVergent for any reason, TriVergent may, at its option, purchase
any shares of Restricted Stock which are not forfeited by reason of such
termination of employment. Such option shall lapse unless exercised within six
(6) months after such termination of employment. The purchase price shall be the
fair market value, as defined in Section 5.(a) hereof, of such shares at the
date of such termination of employment. All shares of stock awarded to employees
hereunder shall permanently be subject to a right of refusal in favor of
TriVergent and may not be sold, assigned or transferred to any person unless
first offered for sale to TriVergent upon the same terms and conditions. This
right of first refusal shall lapse on and after the date of an IPO.
(f) Legend. All certificates representing shares of
Restricted Stock shall be appropriately legended to reflect the above
restrictions.
(g) Withholding. An employee to whom shares of Restricted
Stock are awarded shall be required to remit to
9
<PAGE> 10
TriVergent, upon demand, such amounts of money as may be required by TriVergent
to satisfy Federal and TriVergent income tax withholding requirements with
respect to such Restricted Stock. The value of the Restricted Stock at the time
of vesting shall be reported to the Internal Revenue Service for the year in
which vesting occurs.
8. Terms and Conditions of Bonus Stock Awards. All Bonus Shares which
may be awarded to an employee shall be subject to the following terms and
conditions, in addition to such other terms and conditions as the Board of
Directors may deem advisable:
(a) Price. Bonus Shares shall be awarded at the fair market
value of such shares at date of award, as defined in Section 5(a) hereof, and
shall be issued in the name of the grantee. The Bonus Shares shall be issued
without the payment of any cash consideration by the grantee. However, it shall
be a condition to issuance of the Bonus Shares that the grantee pay to
TriVergent, upon its demand, such amount as may be requested by TriVergent in
order to satisfy its obligation to withhold Federal and TriVergent income taxes
with respect to such grant. The value of the Bonus Shares at the time of award
shall be reported on the grantee's W-2 for the year in which the award is made.
(b) The Bonus Shares shall be issued against execution by the
grantee of an Award Agreement.
(c) Shareholder of Rights. A grantee, as owner of Bonus
Shares, shall have all of the rights of a shareholder, including the right to
vote such shares and to receive all dividends, cash or stock, paid or delivered
thereon.
(d) Buy Back and Right of First Refusal. All Bonus Shares
awarded are subject to repurchase by TriVergent upon termination of the
grantee's employment, for any reason, as follows:
(i) If termination of employment occurs within three (3)
years from date of award of the Bonus Shares, the price to
be paid upon repurchase shall be the value of such Bonus
Shares at date of award, plus interest at the annual prime
rate less one (1%) percent during the period from date of
award to date of repurchase, or
10
<PAGE> 11
(ii) If termination of employment occurs after three (3)
years from date of award of the Bonus Shares, the price to
be paid upon repurchase shall be their then fair market
value as defined in Section 5.(a) hereof.
All shares of stock awarded to employees hereunder shall
permanently be subject to a right of refusal in favor of TriVergent and may not
be sold, assigned or transferred to any person unless first offered for sale to
TriVergent upon the same terms and conditions. This right of first refusal shall
lapse on and after the date of an IPO.
9. Change in Control Acceleration. In the event of a Change in Control
(as defined herein), (i) all outstanding Options shall immediately become
exercisable, (ii) all Bonus Shares shall cease to be subject to a right of first
refusal pursuant to Section 8 and (iii) all outstanding shares of Restricted
Stock shall vest. For purposes hereof, a "Change of Control", shall mean the
occurrence of any of the following events:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than TriVergent or any
subsidiary of TriVergent, or any trustee or other fiduciary
holding securities under an employee benefit plan of
TriVergent or any subsidiary) becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of TriVergent representing
fifty percent (50%) or more of the combined voting power of
TriVergent's then outstanding securities;
(ii) during any period of two consecutive years beginning on
or after the Restatement Date (as defined in Section 12),
individuals who at the beginning of such period constitute
the Board, and any new director (other than a director
designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause
(i), (iii) or (iv)) whose election by the Board or
nomination for election by TriVergent's shareholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for
11
<PAGE> 12
election was previously so approved (unless the approval of
the election or nomination for election of such new
directors was in connection with an actual or threatened
election or proxy contest), cease for any reason to
constitute at least a majority thereof;
(iii) the shareholders of TriVergent approve a merger or
consolidation of TriVergent with any other corporation,
other than (x) a merger or consolidation which would result
in the voting securities of TriVergent outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent
(50%) of the combined voting power of the voting securities
of TriVergent or such surviving entity outstanding
immediately after such merger or consolidation or (y) a
merger or consolidation effected to implement a
recapitalization of TriVergent (or similar transaction) in
which no "person" (as defined above in clause (i)) acquires
more than fifty percent (50%) of the combined voting power
of TriVergent's then outstanding securities; or
(iv) the shareholders of TriVergent approve a plan of
complete liquidation of TriVergent or an agreement for the
sale or disposition by TriVergent of all or substantially
all of TriVergent's assets or any transaction having a
similar effect.
Notwithstanding the foregoing, with respect to Options, Bonus
Shares and Restricted Stock granted or awarded on or after June 9, 2000, the
transactions contemplated by and under the Agreement and Plan of Merger by and
among Gabriel Communications, Inc., Triangle Acquisition, Inc. and State
Communications, Inc. dated as of June 9, 2000, shall not constitute a "Change in
Control". Accordingly, the provisions of this Section 9 shall not be effective
as to any such transaction with respect to any Options, Bonus Shares and
Restricted Stock granted or awarded on or after June 9, 2000.
10. Governmental Regulations. This Plan and the options and rights
granted hereunder shall be subject to all applicable Federal and the laws of the
State of South Carolina. TriVergent
12
<PAGE> 13
shall not be required to issue stock prior to satisfaction of applicable
registration requirements or necessary qualifications.
11. Non-Uniform Determinations. Determinations by the Board of
Directors with respect to Options, Awards, stock values and all other matters
under this Plan need not be uniform or consistent and may be made selectively
among employees, including among employees who are similarly situated, or
others, at the sole discretion of the Board of Directors.
12. Term of the Plan. This Plan became effective on January 12, 1998
and shall terminate on January 12, 2008, or such earlier date as may be
determined by the Board of Directors. Termination of the Plan shall not affect
the rights of holders of outstanding Qualified Options, Non-qualified Options or
Restricted Stock Awards. The Plan was amended and restated as of April 19, 2000
(the "First Restatement Date") and most recently as of June 21, 2000 (the
"Restatement Date").
13. Amendment and Termination of the Plan. This Plan may be amended or
terminated by the Board of Directors without shareholder approval; provided,
that the Board of Directors shall have no power without the approval of the
shareholders of TriVergent to increase the total number of shares that may be
issued pursuant to the Plan, or to amend the provisions of the Plan which
establish the price of Qualified Options as the fair market value at date of
grant or award. No amendment shall adversely affect the terms of an outstanding
grant of an Option Award made hereunder without the consent of the holder of
such Option or Award.
14. Conflicting Terms. In the event that any provision of this Plan
should conflict with any applicable provision of an agreement evidencing the
grant of an Option or Award made hereunder, the terms of the Plan provision
shall govern.
15. Amendment Construction. No provision of this amended and restated
Plan shall apply to (i) any outstanding Qualified Option to the extent that, if
so applied, it would cause such Option to cease to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code or (ii) any outstanding
Option to the extent that, if so applied, it would necessitate, in the opinion
of TriVergent's independent accountants, a charge to TriVergent's earnings.
Without limiting the generality of the foregoing, the last sentences of Sections
5(b) and 5(f) of the Plan as so amended (relating, respectively, to repurchase
rights and post-employment continued exercisability of Options) shall
13
<PAGE> 14
not be applicable to any Qualified Option granted prior to the First Restatement
Date and the applicable provisions of Sections 5(b) and 5(f) as in effect prior
to the Restatement Date shall continue to apply to all Qualified Options granted
prior to the Restatement Date.
14
