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EXHIBIT 10.17
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NOVISTAR, INC.
1999 STOCK OPTION PLAN
May 1, 1999
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TABLE OF CONTENTS
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ARTICLE I. GENERAL............................................................. 1
Section 1.1 Purpose....................................................... 1
Section 1.2 Administration................................................ 1
Section 1.3 Eligibility for Participation................................. 2
Section 1.4 Types of Options Under Plan................................... 2
Section 1.5 Aggregate Limitation on Options............................... 3
Section 1.6 Effective Date and Term of Plan............................... 3
ARTICLE II. STOCK OPTIONS...................................................... 3
Section 2.1 Grant of Stock Options........................................ 3
Section 2.2 Stock Option Agreements....................................... 3
Section 2.3 Stock Option Price............................................ 4
Section 2.4 Term and Exercise............................................. 4
Section 2.5 Manner of Payment............................................. 4
Section 2.6 Issuance of Certificates...................................... 4
Section 2.7 Death, Retirement and Termination of Employment of Optionee... 4
ARTICLE III. INCENTIVE STOCK OPTIONS........................................... 5
Section 3.1 Grant of Incentive Stock Options.............................. 5
Section 3.2 Incentive Stock Option Agreements............................. 5
Section 3.3 Incentive Stock Option Price.................................. 5
Section 3.4 Term and Exercise............................................. 5
Section 3.5 Maximum Amount of Incentive Stock Option Grant................ 6
Section 3.6 Applicability of Stock Options Sections....................... 6
Section 3.7 Code Requirements............................................. 6
ARTICLE IV. MISCELLANEOUS...................................................... 6
Section 4.1 General Restriction........................................... 6
Section 4.2 Non-Assignability............................................. 6
Section 4.3 Withholding Taxes............................................. 7
Section 4.4 Right to Terminate Employment................................. 7
Section 4.5 Non-Uniform Determinations.................................... 7
Section 4.6 Rights as a Stockholder....................................... 7
Section 4.7 Definitions................................................... 7
Section 4.8 Leaves of Absence............................................. 7
Section 4.9 Newly Eligible Employees...................................... 8
Section 4.10 Adjustments.................................................. 8
Section 4.11 Changes in the Company's Capital Structure................... 8
Section 4.12 Amendment of the Plan........................................ 9
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NOVISTAR, INC.
1999 STOCK OPTION PLAN
ARTICLE I. GENERAL
SECTION 1.1 PURPOSE. The purposes of this Stock Option Plan (the "Plan")
are to: (1) associate the interests of the management of NoviStar, Inc. and its
subsidiaries and affiliates (collectively referred to as the "Company") closely
with the stockholders to generate an increased incentive to contribute to the
Company's future success and prosperity, thus enhancing the value of the Company
for the benefit of its stockholders; (2) provide management with a proprietary
ownership interest in the Company commensurate with Company performance, as
reflected in increased stockholder value; (3) maintain competitive compensation
levels thereby attracting and retaining highly competent and talented directors,
employees and consultants; and (4) provide an incentive to management for
continuous employment with the Company. Certain capitalized terms are defined
in Section 4.7.
SECTION 1.2 ADMINISTRATION.
(a) The Plan shall be administered by (i) the Board of Directors of the
Company or (ii) any duly constituted committee of the Board of Directors. Such
administrating party shall be referred to herein as the "Plan Administrator".
(b) The Plan Administrator shall have the authority, in its sole discretion
and from time to time to:
(i) designate the officers and key employees and consultants of the
Company and its Subsidiaries eligible to participate in the Plan;
(ii) grant Options provided in the Plan in such form and amount as the
Plan Administrator shall determine;
(iii) impose such limitations, restrictions and conditions, not
inconsistent with this Plan, upon any such Option as the Plan Administrator
shall deem appropriate; and
(iv) interpret the Plan and any agreement, instrument or other
document executed in connection with the Plan, adopt, amend and rescind
rules and regulations relating to the Plan, and make all other
determinations and take all other action necessary or advisable for the
implementation and administration of the Plan.
(c) Decisions and determinations of the Plan Administrator on all matters
relating to the Plan shall be in its sole discretion and shall be final,
conclusive and binding upon all persons, including the Company, any participant,
any stockholder of the Company, any employee and any
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consultant. No member of any committee acting as Plan Administrator shall be
liable for any action taken or decision made relating to the Plan or any Option
thereunder.
SECTION 1.3 ELIGIBILITY FOR PARTICIPATION. Participants in the Plan shall
be selected by the Plan Administrator from the directors, executive officers and
other employees and consultants of the Company, executive officers and employees
of any Subsidiary of the Company and executive officers and key employees of any
consultant to, administrator for or manager of the Company who have the
capability of making a substantial contribution to the success of the Company.
In making this selection and in determining the form and amount of Options, the
Plan Administrator shall consider any factors deemed relevant, including the
individual's functions, responsibilities, value of services to the Company and
past and potential contributions to the Company's profitability and growth. For
the purposes of this Plan, the term "Subsidiary" means any corporation or other
entity of which at least 50% of the voting securities are owned by the Company
directly or through one or more other corporations, each of which is also a
Subsidiary. With respect to non-corporate entities, Subsidiary shall mean an
entity managed or controlled by the Company or any Subsidiary and with respect
to which the Company or any Subsidiary is allocated more than half of the
profits and losses thereof.
SECTION 1.4 TYPES OF OPTIONS UNDER PLAN. Options under the Plan may be in
the form of anyone or more of the following:
(i) Stock Options, as described in Article II; and/or
(ii) Incentive Stock Options, as described in Article III.
Options under the Plan shall be evidenced by an Option Agreement between the
Company and the recipient of the Option, in form and substance satisfactory to
the Plan Administrator, and not inconsistent with this Plan. Option Agreements
may provide such vesting schedules for Stock Options and Incentive Stock
Options, and such other terms, conditions and provisions as are not inconsistent
with the terms of this Plan. Subject to the express provisions of the Plan, and
within the limitations of the Plan, the Plan Administrator may modify, extend or
renew outstanding Option Agreements, or accept the surrender of outstanding
Options and authorize the granting of new Options in substitution therefor.
However, except as provided in this Plan, no modification of an Option shall
naturally impair the rights of the holder thereof without his consent.
SECTION 1.5 AGGREGATE LIMITATION ON OPTIONS.
(a) Shares of stock which may be issued under the Plan shall be authorized
and unissued or treasury shares of Common Stock of the Company ("Common Stock").
The maximum number of shares of Common Stock which may be issued pursuant to
Options issued under the Plan shall be 2,600,000 which may be increased by the
Board of Directors pursuant to Section 4.12.
(b) For purposes of calculating the maximum number of shares of Common
Stock which may be issued under the Plan at any time all the shares issued
(including the shares, if any, withheld
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for tax withholding requirements) under the Plan shall be counted when issued
upon exercise of a Stock Option or Incentive Stock Option.
(c) Shares tendered by a participant as payment for shares issued upon
exercise of a Stock Option or Incentive Stock Option shall be available for
issuance under the Plan. Any shares of Common Stock subject to a Stock Option
or Incentive Stock Option which for any reason is terminated unexercised or
expires shall again be available for issuance under the Plan.
SECTION 1.6 EFFECTIVE DATE AND TERM OF PLAN.
(a) The Plan shall become effective on the date adopted by the Board of
Directors, subject to approval by the holders of a majority of the shares of
Common Stock at a meeting or by written consent.
(b) The Plan and all Options issued under the Plan shall remain in effect
until such Options have been satisfied or terminated in accordance with the Plan
and the terms of such Options.
ARTICLE II. STOCK OPTIONS
SECTION 2.1 GRANT OF STOCK OPTIONS. The Plan Administrator may from time
to time, and subject to the provisions of the Plan and such other terms and
conditions as the Plan Administrator 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 ("Stock Options") allotted by the Plan Administrator. The date
a Stock Option is granted shall mean the date selected by the Plan Administrator
as of which the Plan Administrator allots a specific number of shares to a
participant pursuant to the Plan.
SECTION 2.2 STOCK OPTION AGREEMENTS. The grant of a Stock Option shall be
evidenced by a written Option Agreement, executed by the Company and the holder
of a Stock Option (the "Optionee"), stating the number of shares of Common Stock
subject to the Stock Option evidenced thereby, and in such form as the Plan
Administrator may from time to time determine.
SECTION 2.3 STOCK OPTION PRICE. The option price per share of Common
Stock which must be paid by the Optionee upon the exercise of a Stock Option
shall be 100% of the fair market value of a share of Common Stock on the date
the Stock Option is granted to the Optionee, unless a higher or lower price is
otherwise determined by the Plan Administrator.
SECTION 2.4 TERM AND EXERCISE. Stock Options granted under the Plan shall
be exercisable as provided in the Option Agreement, which may contain such
conditions and restrictions on the exercise of Stock Options as the Plan
Administrator shall determine. A Stock Option shall be subject to such vesting
schedule and term ("Option Term") as the Plan Administrator may provide in an
Option Agreement. No Stock Option shall be exercisable after the expiration of
its Option Term. Unless otherwise provided in an Option Agreement, each Option
shall have an Option Term of ten years, subject to earlier termination as
provided herein.
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SECTION 2.5 MANNER OF PAYMENT. Each Option Agreement providing for Stock
Options shall set forth the procedure governing the exercise of the Stock Option
granted thereunder, and shall provide that, upon such exercise in respect of any
shares of Common Stock subject thereto, the Optionee shall pay to the Company,
in full, the option price for such shares with cash or, if authorized by the
Plan Administrator, Common Stock.
SECTION 2.6 ISSUANCE OF CERTIFICATES. As soon as practicable after
receipt of payment, the Company shall deliver to the Optionee a certificate or
certificates for such shares of Common Stock. The Optionee shall become a
stockholder of the Company with respect to Common Stock represented by share
certificates so issued and as such shall be fully entitled to receive dividends,
to vote and to exercise all other rights of a stockholder.
SECTION 2.7 DEATH, RETIREMENT AND TERMINATION OF EMPLOYMENT OF OPTIONEE.
Unless otherwise provided in an Option Agreement or otherwise agreed to by the
Plan Administrator:
(a) 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 such Stock Option by
bequest or inheritance or by reason of the death of the Optionee, provided
that such exercise occurs within both (i) the remaining Option Term of the
Stock Option and (ii) one year. 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 rights exercisable on the
date of death.
(b) Upon termination of the Optionee's employment by reason of
retirement or permanent disability (as each is determined by the Plan
Administrator), the Optionee may exercise any Stock Options, provided such
option exercise occurs within both (i) the remaining Option Term of the
Stock Option and (ii) six months (in the case of permanent disability) or
three months (in the case of retirement).
(c) Except as provided in Subsections (a) and (b) of this Section 2.7
or in an Option Agreement, all Stock Options shall terminate immediately
upon the termination of the Optionee's employment.
ARTICLE III. INCENTIVE STOCK OPTIONS
SECTION 3.1 GRANT OF INCENTIVE STOCK OPTIONS. The Plan Administrator may,
from time to time and subject to the provisions of the Plan and such other terms
and conditions as the Plan Administrator may prescribe, grant to any officer or
key employee who is a participant in the Plan one or more "incentive stock
options" (intended to qualify as such under the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended ("Incentive Stock Options")) to
purchase for cash or shares the number of shares of Common Stock allotted by the
Plan Administrator. No Incentive Stock Options shall be made under the Plan
after the tenth anniversary of the effective date of the Plan. The date an
Incentive Stock Option is granted shall mean the date selected by the Plan
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Administrator as of which the Plan Administrator 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 subsidiaries.
SECTION 3.2 INCENTIVE STOCK OPTION AGREEMENTS. The grant of an Incentive
Stock Option shall be evidenced by a written Option Agreement, executed by the
Company and the holder of an Incentive Stock Option (the "Optionee"), stating
the number of shares of Common Stock subject to the Incentive Stock Option
evidenced thereby, and in such form as the Plan Administrator may from time to
time determine.
SECTION 3.3 INCENTIVE STOCK OPTION PRICE. The option price per share of
Common Stock which must be paid by the Optionee upon the exercise of an
Incentive Stock Option shall be 100% of the fair market value of a share of
Common Stock on the date the Incentive Stock Option is granted to the Optionee.
SECTION 3.4 TERM AND EXERCISE. Incentive Stock Options granted under the
Plan shall be exercisable as provided in the Option Agreement, which may contain
such conditions and restrictions on the exercise of Incentive Stock Options as
the Plan Administrator shall determine. Each Incentive Stock Option may be
exercised during a period determined by the Plan Administrator, not to exceed
ten years from the date of grant thereof (the "Option Term") and may be subject
to such vesting scheduling as the Plan Administrator may provide in an Option
Agreement. No Incentive Stock Option shall be exercisable after the expiration
of its Option Term.
SECTION 3.5 MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT. The aggregate
fair market value (determined on the date the Incentive Stock Option is granted)
of Common Stock with respect to which Incentive Stock Options first become
exercisable by an Optionee during any calendar year (under all plans of the
Optionee's employer corporations and their parent and subsidiary corporations)
shall not exceed $100,000.
SECTION 3.6 APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5, Manner
of Payment; and 2.6, Issuance of Certificates; and 2.7 Death, Retirement and
Termination of Employment; applicable to Stock Options, shall apply equally to
Incentive Stock Options. Said Sections are incorporated by reference in this
Article III as though fully set forth herein.
SECTION 3.7 CODE REQUIREMENTS. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of Code
Section 422. Anything in the Plan to the contrary notwithstanding, no term of
the Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Code Section 422, unless the participant has first requested the change
that will result in such disqualification.
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ARTICLE IV. MISCELLANEOUS
SECTION 4.1 GENERAL RESTRICTION. Each Option granted under the Plan shall
be subject to the requirement that, if at any time the Plan Administrator 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 such Option or the issue or
purchase of shares of Common Stock thereunder, such Option may not be
consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Plan Administrator.
SECTION 4.2 NON-ASSIGNABILITY. No Option granted under the Plan shall be
assignable or transferable by the recipient thereof, except by will or by the
laws of descent and distribution. During the life of the recipient, such Option
shall be exercisable only by such person or by such person's guardian or legal
representative.
SECTION 4.3 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 to the Company an amount
sufficient to satisfy any Federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. Alternatively, the Company may issue, transfer or vest only such net of
the number of shares of the Company 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.
SECTION 4.4 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 such participant.
SECTION 4.5 NON-UNIFORM DETERMINATIONS. The Plan Administrator's
determinations under the Plan (including without limitation determinations of
the persons to receive Options, the form, amount and timing of such Options, the
terms and provisions of such Options and the agreements evidencing same) 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 such persons are
similarly situated.
Section 4.6 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 him.
SECTION 4.7 DEFINITIONS. In this Plan the following definitions shall
apply:
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(a) "Fair market value" as of any date means the value of the Common
Stock as determined by the Plan Administrator in such manner as it may deem
appropriate. In no event shall the fair market value of any share of
Common Stock be less than its par value.
(b) "Option" means a Stock Option or Incentive Stock Option.
(c) "Option price" means the purchase price per share of Common Stock
deliverable upon the exercise of a Stock Option or Incentive Stock Option.
SECTION 4.8 LEAVES OF ABSENCE. The Plan Administrator shall be entitled
to make such 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 Plan
Administrator shall be entitled to determine (i) whether or not any such leave
of absence shall constitute a termination of employment within the meaning of
the Plan and (ii) the impact, if any, of any such leave of absence on Options
under the Plan theretofore made to any recipient who takes such leave of
absence.
SECTION 4.9 NEWLY ELIGIBLE EMPLOYEES. The Plan Administrator shall be
entitled to make such rules, regulations, determinations and grants of Options
as it deems appropriate in respect of any employee who becomes eligible to
participate in the Plan or any portion thereof.
SECTION 4.10 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 Plan Administrator 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 theretofore granted under the Plan, and any and all other
matters deemed appropriate by the Plan Administrator.
SECTION 4.11 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) If, while there are outstanding Options, the Company shall effect a
subdivision or consolidation of shares or other increase or reduction in the
number of shares of the Common Stock outstanding without receiving compensation
therefore in money, services or property, then, subject to the provisions, if
any, in the Option Agreement (a) in the event of an increase in the number of
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such shares outstanding, the number of shares of Common Stock then subject to
Options hereunder shall be proportionately increased; and (b) in the event of a
decrease in the number of such shares outstanding the number of shares then
available for Option hereunder shall be proportionately decreased.
(c) After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each holder of an outstanding Option shall,
at no additional cost, be entitled upon exercise of such Option to receive
(subject to any required action by stockholders) in lieu of the number of shares
as to which such Option shall then be so exercisable, the number and class of
shares of stock, other securities or consideration to which such holder would
have been entitled to receive pursuant to the terms of the agreement of merger
or consolidation if, immediately prior to such merger or consolidation, such
holder had been the holder of record of a number of shares of the Company equal
to the number of shares as to which such Option had been exercisable.
(d) If the Company is about to be merged into or consolidated with another
corporation or other entity under circumstances where the Company is not the
surviving corporation, or if the Company is about to sell or otherwise dispose
of substantially all of its assets to another corporation or other entity while
unexercised Options remain outstanding, then the Plan Administrator may direct
that any of the following shall occur:
(i) If the successor entity is willing to assume the obligation to
deliver shares of stock or other securities after the effective date of the
merger, consolidation or sale of assets, as the case may be, each holder of
an outstanding Option shall be entitled to receive, upon the exercise of
such Option and payment of the option price, in lieu of shares of Common
Stock, such shares of stock or other securities as the holder of such
Option would have been entitled to receive had such Option been exercised
immediately prior to the consummation of such merger, consolidation or
sale, and the terms of such Option shall apply as nearly as practicable to
the shares of stock or other securities purchasable upon exercise of the
Option following such merger, consolidation or sale of assets;
(ii) The Plan Administrator may waive any limitations set forth in or
imposed pursuant to this Plan or any Option Agreement with respect to such
Option such that such Option shall become exercisable prior to the record
or effective date of such merger, consolidation or sale of assets; and/or
(iii) The Plan Administrator may cancel all outstanding Options as of
the effective date of any such merger, consolidation or sale of assets
provided that prior notice of such cancellation shall be given to each
holder of an Option at least 30 days prior to the effective date of such
merger, consolidation or sale of assets, and each holder of an Option shall
have the right to exercise such Option in full immediately prior to, and
contingent upon, the effective date of such merger, consolidation or sale
of assets.
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(e) Except as herein provided, the issuance by the Company of Common Stock
or any other shares of capital stock or securities convertible into shares of
capital stock, for cash, property, labor done or other consideration, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding Options.
SECTION 4.12 AMENDMENT OF THE PLAN. The Board of Directors may, without
further approval by the stockholders and without receiving further consideration
from the participants, amend this Plan or condition or modify Options under this
Plan, including increases to the number of shares which may be covered by
Options under this Plan.
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