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Exhibit 12.1
YORKTOWNUNIVERSITY.COM, INC.
2000 STOCK OPTION PLAN
ARTICLE I
GENERAL
1.01 Plan Name.
This Plan shall be known as the Yorktownuniversity.com, Inc. 2000 Stock
Option Plan (the "Plan").
1.02 Effective Date.
The Effective date of the Plan shall be June 20, 2000; provided, however,
that if the shareholders of Yorktownuniversity.com, Inc. (together with any
subsidiary and parent corporation, the "Company") do not approve the Plan, no
Options (as defined in section 1.03) granted under the Plan shall constitute
Incentive Stock Options (as defined in clause (i) of paragraph 1.04(c)(2)).
1.03 Purpose.
The Plan authorizes the Company (as hereinafter defined) to award options
("Options") to purchase Common Stock of the Company ("Common Stock"). The
purposes of this Plan are to provide a means whereby the Company may:
closely associate the interests of selected nonemployees and designated
employees of the Company with the stockholders of the Company by
reinforcing the relationship between participants' rewards and stockholder
gains; provide selected nonemployees and designated employees with an
equity ownership in the Company commensurate with Company performance, as
reflected in increased stockholder value; maintain competitive compensation
levels; and provide an incentive to selected nonemployees and designated
employees to attract, retain and motivate those persons to exert their best
efforts on behalf of the Company.
1.04 Administration.
The Plan shall be administered under the terms of this Section 1.04.
(a) STOCK OPTION COMMITTEE. Except as further provided in this paragraph
1.04(a), the Plan shall be administered by a Stock Option Committee
("Committee") consisting of either the full Board of Directors of the Company
(the "Board of Directors") or a committee of at least two members of the Board
of Directors who shall be appointed by, and serve at the pleasure of, the Board
of Directors. If the Committee is composed of less than the full Board of
Directors, then, unless the Board of Directors authorizes and directs otherwise,
the composition of the Committee shall be controlled by the following provisions
of this paragraph 1.04(a).
(1) Each member of the Committee must be a "non-employee director"
within the meaning of Rule 16b-3, as that Rule may be amended from time to time
("Rule 16b-3"), under the Securities
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Exchange Act of 1934, as amended, when the Committee is acting to grant Options
to those employees who are also directors or officers. Those actions which
require a Committee of non-employee directors include:
(i) selecting the directors or officers to whom Options may be
granted;
(ii) determining the timing, price, number or other terms and
conditions of, or shares subject to, each Option made to an employee who is
also a director or officer; and
(iii) interpreting the Plan or Option agreements with regard to
Options granted to a director or officer.
An officer or director who also has an employment status described in clause
(i), (ii) or (iii) of paragraph 1.04(a)(2), shall also be limited to a maximum
number of Options under the Plan as provided under paragraph 1.04(a)(3).
(2) Each member of the Committee must be an "outside director" within
the meaning of Treasury Regulation 1.162-27(e)(3), as that Regulation may be
amended from time to time (the "Regulation"), under the Internal Revenue Code of
1986, as amended (the "Code"), when the Committee is acting to grant Options to
an individual who has the following employment status with the Company:
(i) the chief executive officer of the Company or an individual
acting in that capacity;
(ii) one of the four highest compensated officers (other than
the chief executive officer) of the Company; or
(iii) an individual reasonably deemed likely, in the judgment of
the Board of Directors or the Committee, to become an employee described in
clause (i) or (ii) of this paragraph 1.04(a)(2) within the exercise period
of any contemplated option.
Those actions which require a Committee of outside directors include the same
actions as is described in paragraph 1.04(a)(1) except that the employment
relationships described in clauses (i), (ii) and (iii) of this paragraph
1.04(a)(2) shall be substituted for the references to director or officer. In
addition, the provisions of paragraph 1.04(a)(3) shall apply.
If an individual who is being considered for a grant of Options is an
officer or director and also has an employment status described in clause (i),
(ii) or (iii) of this paragraph 1.04(a)(2), the members of the Committee shall
consist of whichever of the following director categories is the more
restrictive, non-employee directors as defined in paragraph 1.04(a)(1), or of
outside directors as defined in this paragraph 1.04(a)(2).
(3) In addition to any other limitation, the Committee shall not award
to any employee described in clause (i), (ii) or (iii) of paragraph 1.04(a)(2)
Options for more than an aggregate of 100,000 shares of Common Stock under this
Plan. Further, the number of shares of Common Stock under any Options awarded
to such an employee which are thereafter canceled shall continue to count
against the maximum number of shares of Common Stock which may be awarded to
that employee. In addition, any shares of Common Stock under an Option of such
an employee which are later repriced shall be deemed to be the cancellation of
the original Option for shares of Common Stock and the grant of a new Option for
additional shares of Common Stock for purposes of determining the number of
shares of Common Stock awarded to that employee.
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(b) COMMITTEE ACTION. A majority of the members of the Committee shall
constitute a quorum, and the action of a majority of the members present at a
meeting at which a quorum is present, or which is authorized in writing by all
members, shall be the action of the Committee. A member participating in a
meeting by telephone or similar communications equipment shall be deemed present
for this purpose if the member or members who are present in person and the
member participating by telephone or similar communications equipment can hear
each other.
(c) AUTHORITY OF THE COMMITTEE. The Committee shall have the power: (1) to
determine and designate in its sole and absolute discretion from time to time
those employees of the Company and nonemployees who are eligible to participate
in the Plan and to whom Options are to be granted pursuant to section 1.05;
provided, however, no Option shall be granted after June 20, 2010, the tenth
(10th) anniversary of the original adoption date of the Plan, as provided by
section 1.08; (2) to authorize the granting of (i) Options provided by Article 3
which qualify as Incentive Stock Options within the meaning of Code Section 422
(each an "Incentive Stock Option"), provided that only employees of the Company
may be granted Incentive Stock Options, and (ii) Options provided by Article 2
which do not qualify under Code Section 422 (each a "Nonqualified Stock
Option"); (3) to determine the number of shares awarded with each Option,
subject to limitations provided under sections 1.07 and 3.05 and paragraph
1.04(a)(3); (4) to determine the time or times and the manner when each Option
shall be exercisable and the duration of the exercise period, subject to limits
provided under sections 2.04 and 3.04; and (5) to impose limitations,
restrictions and conditions upon any Option as the Committee shall deem
appropriate.
The Committee may interpret the Plan, prescribe, amend and rescind any
rules and regulations necessary or appropriate for the administration of the
Plan and make other determinations and take other action as it deems necessary
or advisable. Without limiting the generality of the foregoing sentence the
Committee may, in its discretion, treat all or any portion of any period during
which an optionee is on military or an approved leave of absence from the
Company as a period of employment of the optionee by the Company, as the case
may be, for the purpose of accrual of rights under an Option. An
interpretation, determination or other action made or taken by the Committee
shall be final, binding and conclusive.
(d) INDEMNIFICATION OF COMMITTEE. In addition to other rights that they
may have as members of the Board of Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorney's fees actually and reasonably incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Option granted thereunder, and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in the action, suit or proceeding that the Committee member's action
or failure to act constituted self-dealing, willful misconduct or recklessness;
provided that within sixty (60) days after institution of any action, suit or
proceeding a Committee member shall in writing offer to the Company the
opportunity to handle and defend the same, at the Company's own expense.
1.05. Eligibility for Participation.
The Committee may select participants in the Plan from the employees
(including executive officers and directors) of the Company. Committee members
are eligible for participation. In addition, nonemployee consultants, agents
(including directors who are not employees of the Company) and other persons,
who, in the opinion of the Committee, have the capability of making a
substantial contribution to the success of the Company may also be designated as
participants in the Plan. In making this selection and in determining the form
and the number of shares awarded with an Option, the Committee shall consider
any factors deemed
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relevant, including the individual's functions, responsibilities, value of
services to the Company and past and potential contributions to the Company's
profitability and sound growth.
1.06. Types of Awards Under Plan.
Awards under the Plan may be in the form of any one or more of the
following:
(i) Nonqualified Stock Options, as described in Article 2; or
(ii) Incentive Stock Options, as described in Article 3.
1.07. Aggregate Limitation on Awards.
Shares of stock which may be issued under the Plan shall be authorized and
unissued or treasury shares of Common Stock. The maximum number of shares of
Common Stock for which Options may be issued under the Plan shall be 100,000
shares, subject to adjustment as provided in section 4.08. If any Option
granted under the Plan shall terminate, expire or be canceled as to any shares,
new Options may thereafter be granted under the Plan covering those shares,
subject to the limitations imposed under paragraph 1.04(a)(3).
1.08. Term of Plan.
No Options shall be granted under the Plan after June 20, 2010; provided,
however, that the Plan and all Options under the Plan granted prior to that date
shall remain in effect until the Options have been satisfied or terminated in
accordance with the Plan and the terms of the Options.
ARTICLE 2
NONQUALIFIED STOCK OPTIONS
2.01. Award of Nonqualified Stock Options.
The Committee may from time to time, and subject to the provisions of the
Plan and the other terms and conditions as the Committee may prescribe, grant to
any participant in the Plan one or more Options to purchase for cash or shares
the number of shares of Common Stock allotted by the Committee. The date a
Nonqualified Stock Option is granted shall mean the date selected by the
Committee as of which the Committee allots a specific number of shares to a
participant pursuant to the Plan.
2.02. Nonqualified Stock Option Agreements.
The grant of a Nonqualified Stock Option shall be evidenced by a written
Nonqualified Stock Option Agreement, executed by the Company and the holder of a
Nonqualified Stock Option, stating the number of shares of Common Stock subject
to the Nonqualified Stock Option evidenced thereby, and in the form as the
Committee may from time to time determine.
2.03. Nonqualified Stock Option Price.
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Except as otherwise provided herein in the case of an exchange, the option
price per share of Common Stock deliverable upon the exercise of a Nonqualified
Stock Option shall be at least 100% of the fair market value of a share of
Common Stock on the date the Option is granted. As used in this Plan, the "fair
market value of a share of Common Stock on the date the Option is granted" shall
mean (i) if shares of Common Stock are listed or admitted to trading on any
securities exchange or the Nasdaq Stock Market, the closing price, regular way,
on the last preceding full business day during which such shares have been sold
on or through such exchange or quotation system, or if no sale has taken place
within 10 days prior to the date the determination of fair market value is made,
the average of the closing bid and asked prices on the last business day ended
prior to (and within 10 days of) the date the determination of fair market value
is made; (ii) if shares of Common Stock are publicly traded but are not then
listed or admitted to trading on any securities exchange, or the Nasdaq Stock
Market, the average of the closing bid and the asked prices for the shares on
the last business day ended prior to (and within 10 days of) the date the
determination of fair market value is made, as reported by a reputable quotation
source; or (iii) in any other instance, the value of the Common Stock as
determined in good faith by the Board of Directors and certified in a board
resolution.
2.04. Term and Exercise.
Each Nonqualified Stock Option shall first be exercisable and/or become
exercisable according to the vesting schedule as is determined by the Committee
and provided in the Nonqualified Stock Option Agreement. Unless the Committee
determines otherwise as provided in a Nonqualified Stock Option Agreement,
Nonqualified Stock Options shall vest in one-third increments, with the first
one-third increment being exercisable on or after the first anniversary of the
date of the grant and an additional remaining one-third increment being
exercisable on or after each subsequent anniversary date so that 100% vesting
will have occurred on the third anniversary of the date of grant; provided that
if the optionee at the date of grant is an employee or a non-employee faculty
member of the Company, the optionee continues to be an employee or faculty
member of the Company on each of those dates. Unless the Committee determines
otherwise as provided in a Nonqualified Stock Option Agreement, as to an
optionee who is an employee or non-employee faculty member on the date of grant,
vesting terminates once the optionee is no longer an employee or faculty member.
Each Nonqualified Stock Option shall be for a term of 10 years, subject to
earlier termination as provided in section 2.07, 2.08 or 2.09, unless the
Nonqualified Stock Option Agreement expressly provides for a different term, not
in excess of 10 years, and/or expressly provides that the provisions of any or
all of section 2.07, 2.08 or 2.09 shall not apply to cause the Nonqualified
Stock Option to earlier terminate. A Nonqualified Stock Option shall not be
exercisable after the expiration of its term.
2.05. Manner of Payment.
Each Nonqualified Stock Option Agreement shall set forth the procedure
governing the exercise of the Nonqualified Stock Option granted thereunder, and
shall provide that, upon the exercise in respect of any shares of Common Stock
subject thereto, the optionee shall pay to the Company, in full, the option
price for the shares with cash or with previously owned Common Stock.
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2.06. Certificates.
As soon as practicable after receipt of payment for shares of Common Stock
purchased upon the exercise of a Nonqualified Stock Option, the Company shall
deliver a certificate or certificates for those shares of Common Stock to the
optionee. The optionee shall become a stockholder of the Company with respect
to Common Stock represented by share certificates so issued and shall be fully
entitled to receive dividends, to vote and to exercise all other rights of a
stockholder.
2.07. Death of Optionee.
(a) Unless modified pursuant to Section 2.04, upon the death of the
optionee, any rights to the extent exercisable on the date of death may be
exercised by the optionee's estate, or by a person who acquires the right to
exercise the Nonqualified Stock Option by bequest or inheritance or by reason of
the death of the optionee, provided that the exercise occurs within both the
remaining effective term of the Nonqualified Stock Option and one year after the
optionee's death.
(b) If the optionee is an employee or non-employee faculty member, the
provisions of this Section shall apply notwithstanding the fact that the
optionee's employment or faculty appointment may have terminated prior to death,
but only to the extent of any rights exercisable on the date of death.
2.08. Retirement or Disability.
Unless modified pursuant to Section 2.04, if an optionee is an employee or
non-employee faculty member, upon termination of the optionee's employment or
service to the Company as a faculty member by reason of retirement or permanent
disability (as each is determined by the Committee), the optionee may, within 36
months from the date of termination, exercise any Nonqualified Stock Options to
the extent the Options are exercisable during that 36-month period.
2.09. Termination for Other Reasons.
Unless modified pursuant to Section 2.04, if the optionee is an employee or
non-employee faculty member, except as provided in sections 2.07 and 2.08, the
optionee's Nonqualified Stock Options shall terminate three months after the
termination of the optionee's employment or service as a faculty member.
ARTICLE 3
INCENTIVE STOCK OPTIONS
3.01. Award of Incentive Stock Options.
The Committee may, from time to time and subject to the provisions of the
Plan and the other terms and conditions as the Committee may prescribe, grant to
any participant in the Plan who is an employee of the Company one or more
"incentive stock options" (intended to qualify under the provisions of Code
Section 422) to purchase for cash or shares the number of shares of Common
Stock allotted by the Committee. The date an Incentive Stock Option is granted
shall mean the date selected by the Committee as of which the Committee allots a
specific number of shares to a participant pursuant to the Plan.
Notwithstanding the foregoing, Incentive Stock Options shall not be granted to
any owner of 10% or more of the total combined voting power of the Company and
its parent or subsidiaries unless the option price per share complies with the
requirements set forth in section 3.03.
3.02. Incentive Stock Option Agreements.
The grant of an Incentive Stock Option shall be evidenced by a written
Incentive Stock Option Agreement, executed by the Company and the holder of an
Incentive Stock Option, stating the number of shares of Common Stock subject to
the Incentive Stock Option evidenced thereby, and in the form as the Committee
may from time to time determine.
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3.03. Incentive Stock Option Price.
The option price per share of Common Stock deliverable upon the exercise of
an Incentive Stock Option shall be at least 100% of the fair market value of a
share of Common Stock on the date the Option is granted, unless the option has
been granted to an owner, determined with attribution, of 10% or more of the
total combined voting power of the Company or any parent or any subsidiary of
the Company. In that case, the option price shall be at least 110% of the fair
market value of a share of Common Stock on the date the Incentive Stock Option
is granted.
3.04. Term and Exercise.
Each Incentive Stock Option shall first be exercisable and/or become
exercisable according to the vesting schedule as is determined by the Committee
and provided in the Incentive Stock Option Agreement. Unless the Committee
determines otherwise as provided in an Incentive Stock Option Agreement,
Incentive Stock Options shall vest in 25 percent increments, with the first 25
percent increment being exercisable on or after the first anniversary of the
date of the grant and an additional remaining 25 percent increment being
exercisable on or after each subsequent anniversary date so that 100% vesting
will have occurred on the fourth anniversary of the date of grant; provided that
the employee continues to be employed by the Company on each of those dates.
Unless the Committee determines otherwise as provided in an Incentive Stock
Option Agreement, vesting terminates once the optionee is no longer an employee.
Each Incentive Stock Option shall be for a term of 10 years (5 years in the
case of an award to an owner, determined with attribution, of 10% or more of the
total combined voting power of the Company or any parent or any subsidiary of
the Company), subject to earlier termination as provided in section 3.06, 3.07
or 3.08, unless the Incentive Stock Option Agreement expressly provides for a
different term, not in excess of 10 years, and/or expressly provides that the
provisions of any or all of section 3.06, 3.07 or 3.08 shall not apply to cause
the Incentive Stock Option to earlier terminate, so long as the modifications
shall not cause the Incentive Stock Option granted thereby to cease to qualify
as an "incentive stock option" under Code Section 422. An Incentive Stock
Option shall not be exercisable after the expiration of its term.
3.05. Maximum Amount of Incentive Stock Option Grant.
The aggregate fair market value (determined on the date the option is
granted) of Common Stock subject to all Incentive Stock Options granted to an
optionee which are exercisable for the first time by the optionee in any
calendar year shall not exceed $100,000.
3.06. Death of Optionee.
(a) Unless modified pursuant to Section 3.04, upon the death of the
optionee, any Incentive Stock Option exercisable on the date of death may be
exercised by the optionee's estate or by a person who acquires the right to
exercise the Incentive Stock Option by bequest or inheritance or by reason of
the death of the optionee, provided that the exercise occurs within both the
remaining option term of the Incentive Stock Option and one year after the
optionee's death.
(b) The provisions of this Section shall apply notwithstanding the fact
that the optionee's employment may have terminated prior to death, but only to
the extent of any Incentive Stock Options exercisable on the date of death.
3.07. Retirement or Disability.
Unless modified pursuant to Section 3.04, upon the termination of the
optionee's employment by reason of permanent disability or retirement (as each
is determined by the Committee), the optionee may, within 36 months from the
date of termination of employment, exercise any Incentive Stock Options to the
extent the Incentive Stock Options were exercisable at the date of termination
of employment. Notwithstanding the foregoing, the tax treatment available
pursuant to Code Section 422 upon the exercise of
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an Incentive Stock Option will not be available to an optionee who exercises any
Incentive Stock Options more than (i) 12 months after the date of termination of
employment due to permanent disability or (ii) three months after the date of
termination of employment due to retirement.
3.08. Termination for Other Reasons.
Unless modified pursuant to Section 3.04, except as provided in sections
3.06 and 3.07, all Incentive Stock Options shall terminate three months after
the termination of the optionee's employment.
3.09. Applicability of Nonqualified Stock Options Sections.
Sections 2.05 and 2.06 hereof shall apply equally to Incentive Stock
Options. Those sections are incorporated by reference in this Article 3, but
substituting Incentive Stock Option for Nonqualified Stock Option, as though
fully set forth herein.
ARTICLE 4
OTHER PROVISIONS
4.01. General Restriction.
Each Option under the Plan shall be subject to the requirement that, if at
any time the Committee shall determine that (i) the listing, registration or
qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or Federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the grantee
of an Option with respect to the disposition of shares of Common Stock is
necessary or desirable as a condition of, or in connection with, the granting of
the Option or the issue or purchase of shares of Common Stock thereunder, the
Option may not be consummated in whole or in part unless the listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
4.02. Non-Assignability.
Unless the Committee determines otherwise as provided in a Nonqualified or
Incentive Stock Option Agreement, no Option under the Plan shall be assignable
or transferable by the recipient thereof, except by will or by the laws of
descent and distribution. If not determined otherwise by the Committee, during
the life of the recipient, the Option shall be exercisable only by that person
or by that person's guardian or legal representative.
4.03. Withholding Taxes.
Whenever the Company proposes or is required to issue or transfer shares of
Common Stock under the Plan, the Company shall have the right to require the
grantee to remit an amount sufficient to satisfy any Federal, state and/or local
withholding tax requirements to the Company prior to the delivery of any
certificate or certificates for the shares. Alternatively, the Company may
issue or transfer the shares of Common Stock net of the number of shares
sufficient to satisfy the withholding tax requirements. For withholding tax
purposes, the shares of Common Stock shall be valued on the date the withholding
obligation is incurred.
4.04. Right to Terminate Employment.
Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any participant the right to continue in the employment of the
Company or affect any right which the Company may have to terminate the
employment of the participant.
4.05. Non-Uniform Determinations.
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The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive Options, the form, number of shares
awarded with, and timing of Options, the terms and provisions of Options and the
agreements evidencing Options) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options under
the Plan, whether or not the persons are similarly situated.
4.06. Rights as a Stockholder.
The recipient of any Option under the Plan shall have no rights as a
stockholder with respect thereto unless and until certificates for shares of
Common Stock are issued to that person.
4.07. Leaves of Absence.
The Committee shall be entitled to make rules, regulations and
determinations as it deems appropriate under the Plan in respect of any leave of
absence taken by the recipient of any Option. Without limiting the generality
of the foregoing, the Committee shall be entitled to determine (i) whether or
not any leave of absence shall constitute a termination of employment within the
meaning of the Plan and (ii) the impact, if any, of any leave of absence on
Options under the Plan previously made to any recipient who takes a leave of
absence.
4.08. Adjustments.
In the event of any change in the outstanding Common Stock by reason of a
stock dividend or distribution, recapitalization, merger, consolidation, split-
up, combination, exchange of shares or the like, the Committee may appropriately
adjust the number of shares of Common Stock which may be issued under the Plan,
the number of shares of Common Stock subject to Options previously granted under
the Plan, the option price of Options previously granted under the Plan and any
and all other matters deemed appropriate by the Committee.
4.09. Amendment of the Plan.
(a) The Board of Directors of the Company may, without further action by
the stockholders and without receiving further consideration from the
participants, amend this Plan or condition or modify Options under this Plan in
response to changes in securities or other laws or rules, regulations or
regulatory interpretations thereof applicable to this Plan or to comply with
stock exchange rules or requirements.
(b) The Board of Directors of the Company may at any time and from time to
time terminate or modify or amend the Plan in any respect, except that without
stockholder approval the Board may not increase the maximum number of shares of
Common Stock which may be issued under the Plan, except for increases pursuant
to section 4.08 hereof or increases that do not result in the total number of
shares that may be issued under the Plan to exceed 15% of the outstanding shares
of Common Stock. The termination or any modification or amendment of the Plan,
except as provided in subsection (a), shall not affect any participant's rights
under an Option previously granted to the participant unless the participant
consents.
4.10. Change of Control.
Notwithstanding anything to the contrary contained in this Plan, except to
the extent otherwise provided in any Option agreement or as may otherwise be
determined by the Board or the Committee, upon the occurrence of a Change of
Control, all then unvested options shall immediately terminate without any award
being made or other compensation being paid to the holders of such unvested
Options.
As used in this Section 4.10, the term "Change of Control" means:
(i) The Company is merged, consolidated or reorganized into or with
another corporation or other entity, and as a result of the merger,
consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of the corporation or
entity
