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EXHIBIT 10.1
STARBAND COMMUNICATIONS INC.
2000 STOCK INCENTIVE PLAN
This is the STARBAND COMMUNICATIONS INC. 2000 STOCK INCENTIVE PLAN. Our
Board adopted this Plan as of May 26, 2000. At that time, our name was
Gilat-to-Home Inc. As of September 11, 2000, we changed our name to StarBand
Communications Inc. and the name of the Plan has been conformed to reflect that
change.
This Plan authorizes our Board to grant options to purchase, stock
appreciation rights ("SARs") as to and restricted shares of, our common stock.
The Plan supplies a number of standard terms and conditions for options, SARs
and restricted stock that will apply unless our Board provides otherwise in a
particular case. We have provided definitions for capitalized terms in Section
20 below.
1. PURPOSE
We are adopting the Plan so that we can grant Options, SARs and shares of
Restricted Stock to selected officers, employees, directors and consultants who
are providing services to us or our Affiliates. We believe that equity ownership
will create strong incentives for our personnel to produce good business results
for us by giving them an opportunity to acquire or increase a proprietary
interest in StarBand Communications Inc. ("StarBand"). We hope that equity
ownership will encourage them to do their best to help us to achieve our
long-term corporate objectives and that they also will be more likely to stay
with us instead of pursing other employment or business opportunities.
We intend each Option we grant under the Plan to be a Nonqualified Option
(and not an Incentive Stock Option) for income tax purposes, unless we
specifically designate the Option as an Incentive Stock Option in the Option
Agreement at the time we grant it and the Option satisfies all the requirements
for that treatment. We may issue SARs and shares of Restricted Stock in
accordance with the provisions of Section 6 below. We refer to Options, SARs and
Restricted Stock as "Incentive Awards."
2. ADMINISTRATION
(a) Board of Directors. Our Board will administer the Plan. Our
Board will have the full power and authority to take all actions and to make all
determinations required or permitted under the Plan. If any Incentive Award or
Agreement needs to be interpreted or amended or if any other action by StarBand
is necessary or desirable to implement the Plan or any Incentive Award, our
Board will have the authority to take those actions, in its discretion. Our
Board will take
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action and make determinations in accordance with our Certificate of
Incorporation and Bylaws by the affirmative vote of a majority of the members of
the Board who are present at a meeting at which any issue relating to the Plan
is properly raised for consideration, or by written consent. The Board's
interpretation of the Plan or any Incentive Award or Agreement shall be final
and conclusive.
(b) Committee. The Board may appoint a Committee and delegate
all or a portion of the Board's authority for the administration of the Plan to
the Committee. The Committee will take action and make determinations by the
affirmative vote of a majority of its members who are present at a meeting at
which any issue relating to the Plan is properly raised for consideration, or by
written consent in accordance with our Certificate of Incorporation and Bylaws.
(c) No Liability. No member of our Board or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Incentive Award or Agreement.
(d) Scope and Effect of Delegation to the Committee. If our
Board delegates to the Committee the power and authority to take an action or
make a determination, the Committee will have the same power and authority, to
the extent delegated, as the Board would have had. When our Board delegates
power and authority to the Committee, the Board may retain the power and
authority to take final actions and make final determinations itself.
3. STOCK
We can issue shares of our Stock under the Plan, either from treasury
shares or from our authorized but unissued shares. We will not issue more than
8,000,000 shares of Stock under the Plan. As of the first day of each fiscal
year of the Company beginning after December 31, 2000 and before July 1, 2005,
we will increase that number by 4% of the then issued and outstanding shares of
our Stock. We will adjust the number of shares of Stock available under the Plan
from time to time as appropriate to reflect changes in our capitalization
after the Effective Date, as provided in Section 17. If any Incentive Award
expires, terminates, or is canceled, forfeited or terminated, in whole or any
part, before exercise or vesting in full (other than as a result of the exercise
of an SAR for cash), the shares of Stock that were subject to the forfeited,
canceled or terminated portion of that Incentive Award shall be available for
future grants under the Plan. Notwithstanding the foregoing, no more than
8,000,000 shares (adjusted pursuant to Section 17 and reduced by Incentive
Awards granted from time to time under the Plan) shall be issued pursuant to
Incentive Stock Options under the Plan, provided, that upon the expiration,
termination, cancellation or forfeiture of an Incentive Stock Option (other than
as a result of the exercise of an SAR for cash), the shares of Stock that were
subject to the forfeited, canceled or terminated portion of the Incentive Stock
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Option shall again be available for future grants of Incentive Stock Options
under the Plan.
4. ELIGIBILITY
We can grant Incentive Awards to any employee, officer, director or
consultant who provides services to StarBand or any Affiliate. All of those
persons will be Eligible Individuals, but only employees of StarBand or a
Subsidiary are eligible to receive Incentive Stock Options. Our Board will have
discretion to designate the Eligible Individuals who will receive Incentive
Awards. No one will have any right to an Incentive Award until both: (a) our
Board takes corporate action to make the award and (b) we enter into an
Agreement with that individual. An individual may hold more than one Incentive
Award.
5. EFFECTIVE DATE AND TERM OF THE PLAN
(a) Effective Date. The Plan became effective as of the Effective
Date, which is the date our Board adopted it, but our ability to grant Incentive
Stock Options under the Plan is subject to approval of our stockholders, by a
majority of the votes cast at a meeting or by written consent, in either case in
accordance with our Certificate of Incorporation and Bylaws, within one year
after the Effective Date. Upon approval of the Plan within that time period by
our stockholders, all Incentive Stock Options that we had previously granted
under the Plan will be fully effective as if the stockholders had approved the
Plan on the Effective Date. If the stockholders do not approve the Plan or
approve it more than one year after the Effective Date, any Incentive Stock
Options that we have granted under the Plan will be Nonqualified Options. Other
Incentive Awards will be fully effective, whether or not our stockholders
approve the Plan.
(b) Term. The Plan shall terminate 10 years after the Effective
Date and we will not grant any Incentive Awards under the Plan after it
terminates.
6. GRANT OF OPTIONS, SARS AND
SHARES OF RESTRICTED STOCK
(a) Options. The Board may grant to an Eligible Individual an
Option to purchase a specified number of shares of Stock at a specified price,
subject to the terms and conditions that are set out in the Plan and to any
additional or permissible alternative terms and conditions that our Board
determines to apply, including in appropriate cases, terms that are necessary to
qualify an Option as an Incentive Stock Option. The grant date of an Option will
be the date our Board has taken action to approve the grant, unless the Board
determines that the Option should have a later grant date.
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(b) SARs. The Board may grant to an Eligible Individual rights
to surrender an SAR or a tandem Option and SAR, or portion thereof, and receive
payment from the Company of an amount equal to the excess of the Fair Market
Value of the shares of Stock subject to the SAR or Option and SAR, or portion
thereof, as of the date the SARs are exercised, over the Option Price of such
shares. Payment may be made either in shares of Stock or in cash or in any
combination thereof. The method of payment shall be specified in the Agreement
with respect to the SAR. Each SAR shall relate to a specific number of shares of
Stock. The number of shares of Stock subject to an Option to which an SAR
relates shall be reduced by the number of SARs exercised for Stock or cash under
the provisions of the Agreement. SARs may be exercised as provided in Section 10
below.
(c) Restricted Stock. The Board may grant to an Eligible
Individual shares of Restricted Stock, subject to payment by the Holder of an
amount not less than the par value of the Stock. Our Board can specify
performance objectives, continuous service requirements or other Conditions that
the Holder must satisfy before the Stock will become vested (wholly or
partially). No Restricted Stock grant will be effective until the Holder and
StarBand each executes an Agreement setting out the Conditions of the grant.
Upon satisfying the specified Conditions and any other applicable requirements,
the Holder shall be entitled to the shares of Stock covered by the grant free of
restrictions, other than restrictions under Section 11 below.
If the Holder fails to satisfy the specified Conditions within the time
specified or if the Holder's employment terminates before the Holder has
satisfied the Conditions, the Holder will forfeit the shares of Restricted Stock
that are not vested. Our Board can direct that shares of Restricted Stock will
be held, either by StarBand or in escrow, until they become vested and it can
place a legend on the shares of Restricted Stock disclosing the restrictions and
the possibility that the shares will be forfeited if the Conditions are not
satisfied.
(d) Cancellation and New Grant of Options and SARs. Our Board
has the authority, with the consent of the affected Optionee or Holder, to
cancel any Option or SAR and to substitute a new Option or SAR covering the same
or a different number of shares of Stock, with the same or a different exercise
price and vesting schedule than the exercise price and vesting schedule of the
canceled Option or SAR.
(e) Acceleration and Waiver of Restrictions. By written notice
to the Optionee or Holder, our Board may accelerate the date on which an Option
or SAR may be exercised or the vesting of an Option or SAR or Restricted Stock
award and it may waive transfer restrictions.
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7. LIMITATION ON INCENTIVE STOCK OPTIONS
There is a $100,000 annual limitation on Incentive Stock Options. The
limitation is based on the fair market value at the time of grant of the shares
of Stock that are covered by an Incentive Stock Option. The limitation relates
to the maximum dollar value of stock for which an Optionee can exercise a vested
Option for the first time in any calendar year, whether or not he or she
actually exercises it.
Specifically, an option will constitute an Incentive Stock Option only to
the extent that the aggregate fair market value (determined at the time the
option was granted) of the stock with respect to which the optionee first has
the right to exercise the option (and all other incentive stock options granted
by the same employer or its affiliate) in any calendar year is not more than
$100,000.
If one or more Options that are designated as Incentive Stock Options
become exercisable in a particular year and the $100,000 limitation is exceeded,
the Options granted most recently will be disqualified first. If any of our
Options exceeds this limitation, the excess portion shall be a Nonqualified
Option.
8. AGREEMENTS
We will not grant any Incentive Awards pursuant to oral agreements. All
of our Options, SARs and Restricted Stock will be evidenced by written
Agreements executed by us and the Optionee or Holder. Our Board has the
discretion to specify the terms of the Agreements, subject to the requirements
of the Plan, and the Board can use different Agreements for different grants.
Our Board can modify an Agreement after it has been executed, but no amendment
or modification will be effective unless it is in writing, approved by our Board
and executed by us and the Optionee or Holder, except that execution by the
Optionee or Holder is not required if the change is beneficial to the Optionee
or Holder.
9. OPTION PRICE
Our Board will determine the purchase price of each share of Stock that
is subject to an Option and the strike price of each SAR and will state that
price in the Agreement. In the case of an Incentive Stock Option, the Option
Price cannot be less than 100% of the Fair Market Value of the Stock covered by
the Option on the date of grant (except that the Option Price cannot be less
than 110% of such Fair Market Value if the Optionee is a 10% Stockholder). In
any case, the Option Price cannot be less than the par value (if any) of the
Stock.
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10. TERM AND EXERCISE OF OPTIONS AND SARS
(a) Term. Each Option and SAR granted under the Plan will
terminate 10 years from the date of grant or on such earlier date as our Board
specifies in a particular Agreement. If the Option is an Incentive Stock Option
and the Optionee is a 10% Stockholder, the maximum term shall be five years from
the date of grant. Options may be terminated earlier because of termination of
employment or service or a Corporate Transaction under Section 17 below.
(b) Option or SAR Period and Limitations on Exercise. Unless
our Board provides different terms in a particular Agreement, each Option and
SAR shall be exercisable at any time from the date of grant until the expiration
or termination of the Option. Our Board may provide that an Optionee or Holder
cannot exercise all or a part of an Option or SAR during any period of time that
the Option or SAR is outstanding and may condition vesting or exercisability of
an Option or SAR upon the Optionee's or Holder's attainment of performance
objectives or service requirements that are specified in the Agreement. Our
Board also may waive in writing any limitation or condition on the exercise of
an Option or SAR that is set out in an Agreement (other than limitations and
conditions that are imposed by the Plan). No Incentive Stock Option can be
exercised before the Plan is approved by our stockholders.
(c) Method of Exercise of an Option. An Optionee can exercise a
vested and exercisable Option by delivering to the Company (1) a written notice
of exercise specifying the number of the Option shares that he or she wants to
purchase and (2) payment in full of the Option Price of the shares for which the
Option is being exercised.
Payment shall be made in cash or through the tender to the Company
of whole shares of Stock that have been held at least six months, valued at
their Fair Market Value on the date of exercise, plus cash for any remainder,
except that, to the extent permitted in an Option Agreement, the Optionee may
(1) pay the par value of the shares in cash and deliver a full-recourse
promissory note for the remainder of such price or (2) direct the Company to
withhold a number of whole shares of Stock otherwise issuable to the Optionee
sufficient to pay the exercise price and applicable withholding taxes. Any
attempt to exercise any Option other than as set forth above shall be invalid
and of no force and effect.
Within 30 days after an Optionee exercises an Option and pays in full the
Option Price of the shares of Stock purchased, he or she shall be entitled to a
Stock certificate evidencing such shares. Shares purchased under an Incentive
Stock Option will be represented by a separate certificate and will not be
combined with shares purchased under Nonqualified Options, because of the rules
in the Code
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relating to disqualifying dispositions of shares purchased pursuant to Incentive
Stock Options. An individual holding or exercising an Option shall have none of
the rights of a stockholder until the shares of Stock are fully paid and issued.
We will put a legend on Stock certificates issued under the Plan to reflect
restrictions on the sale of the Stock and rights that we have under Section 11
below.
(d) Method of Exercise of an SAR.
(1) Exercise. A Holder my exercise an SAR by delivering
to the Company a written notice of exercise that specifies the number of SARs
that he or she wants to exercise. The exercise date of the SARs will be the date
upon which the Company receives the exercise notice. Except to the extent that a
Holder exercises an SAR for cash (if permitted by the Agreement), the Holder who
exercises an SAR shall receive, without payment to the Company, the number of
shares of Stock determined under Section 10(d)(2) below. The Company shall issue
a Stock certificate or certificates for such shares promptly after the Holder
exercises an SAR. Shares issued pursuant to the exercise shall be subject to
applicable restrictions pursuant to Section 11 below. No one who holds or
exercises SARs shall have any of the rights of a stockholder with respect to any
shares of Stock covered by the SARs until shares of Stock are issued to him or
her, and, except as provided in Section 17 below, no adjustment shall be made
for dividends or other rights for which the record date is before the date on
which the Company issues such shares.
(2) Shares to be issued upon the Exercise of an SAR for
Shares. The number of shares of Stock which shall be issued pursuant to the
exercise of SARs shall be determined by dividing (i) the total number of SARs
being exercised, multiplied by the amount by which the Fair Market Value of a
share of Stock on the exercise date exceeds the Option Price of the shares of
Stock under the SAR by (ii) the Fair Market Value of a share of Stock on the
exercise date of the SARs; provided, however, that no fractional share shall be
issued on exercise of SARs, and that cash shall be paid by the Company to the
individual exercising SARs in lieu of any such fractional share.
(3) Exercise of an SAR for Cash. Promptly after the
exercise of an SAR for cash (if permitted by the Agreement), the Company shall
pay to the individual exercising the SAR an amount of money equal to the
difference between the Fair Market Value of a share of Stock on the exercise
date and the Option Price, in full satisfaction of the Holder's rights in the
SAR.
(4) Limitations. SARs shall be exercisable at such times
and under such terms and conditions as the Board, in its sole and absolute
discretion, shall determine and set forth in the Agreements; provided, however,
that an SAR may be exercised only at such times and by such individuals as the
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Agreement provides; and provided, further, that an SAR may be exercised only at
such times as the Fair Market Value of a share of Stock on the exercise date
exceeds the Option Price. Adjustments in the number, kind, or Option Price of
shares of Stock for which Awards are granted pursuant to Section 17 below shall
be made as necessary to the related SARs held by each Eligible Individual. Any
amendment, suspension or termination of any Option to which any SAR relates
pursuant to Section 17 below shall be deemed an amendment, suspension or
termination of related SARs to the same extent.
11. TRANSFERABILITY OF STOCK, SARS AND OPTIONS
(a) Lifetime Transfers. During his or her lifetime, only the
Optionee may exercise an Incentive Stock Option. No Optionee may assign or
transfer any Incentive Stock Option, except that, in the event of the Optionee's
death, the Option may be transferred by will or the laws of descent and
distribution. The same rules concerning transfers shall apply to Nonqualified
Options and SARS, except that, to the extent authorized in an Option Agreement,
an Optionee may transfer not for value all or part of a Nonqualified Option and
any related SAR to a Family member or a Family Trust, provided that the
transferee shall enter into a written agreement to be bound by the terms of the
Plan and the Option Agreement and any subsequent transfer of the Option or
shares of Stock shall be subject to the transfer restrictions set out in this
Plan. A transfer (i) under a domestic relations order in settlement of marital
property rights, or (ii) to an entity in which more than 50% of the voting
interests are owned by Family members (or the Optionee) in exchange for an
interest in that entity, shall be considered to be "not for value" for this
purpose. No Holder may assign or transfer any shares of Restricted Stock before
he or she satisfies applicable Conditions with respect to such shares, except
that (i) the Holder may transfer such shares subject to such Conditions by gift
to one or more Family members or to a Family Trust and (ii) in the event of the
Holder's death, the shares of Restricted Stock, to the extent vested, may be
transferred by will or the laws of descent and distribution.
No holder of shares of Stock acquired pursuant to this Plan shall sell,
assign, transfer, pledge or hypothecate any of those shares (1) at any time
before the Stock is registered under Section 12 of the Exchange Act unless the
holder has held such shares of Stock at least six months (except as provided in
Section 11(c) below) and (2) in any case, other than in accordance with the
terms of this Plan and any applicable stockholders agreement, or with the prior
written consent of the Company.
(b) Right of First Refusal. No one shall sell, pledge, assign,
gift or transfer to anyone, or otherwise dispose of, any shares of Stock
acquired pursuant to an Incentive Award without first offering them to StarBand
for
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purchase on the same terms and conditions as those offered by the proposed
transferee. Any individual who proposes such a transfer (the "Transferor") shall
notify StarBand, in writing, of the identity of the transferee and the terms and
conditions of such transfer.
StarBand may exercise its right of first refusal within 30 days after
receiving notice of the proposed transfer or it may assign its right to a 10%
Stockholder, a Qualified Plan or an Affiliate. If StarBand and any person to
whom it assigns its rights fail to exercise the right of first refusal during
this 30-day period, the Transferor may proceed with the proposed transfer at any
time within the next 60 days, and if he or she does not do so, the restrictions
of this Subsection shall re-apply. The restrictions of this Subsection shall not
apply to a transfer of Stock (i) by gift to one or more Family members or to a
Family Trust or (ii) that occurs as a result of the death of the Transferor, but
such restrictions shall apply to any subsequent transfer by any person who
acquires such shares from the Transferor. The right of first refusal granted in
this Section shall terminate on the closing of an initial public offering of the
Company's Stock under the Securities Act.
(c) Repurchase Right. Upon the termination of the employment or
service with the Company or any of its Affiliates for any reason of an Eligible
Individual, the Company or any of its Affiliates shall have the right, for a
period of 180 days following such termination, to repurchase any or all of the
shares of Stock acquired by the Eligible Individual under the Plan, at a price
equal to the Fair Market Value of such shares of Stock on the date of
termination (or at such lower price as is specified in the appropriate
Agreement). Upon the exercise of an Option or SAR following termination of
employment or service, the Company or any of its Affiliates shall have the
right, for a period of 180 days following such exercise, to repurchase any or
all of the shares of Stock purchased at a price equal to the Fair Market Value
of such shares on the date of exercise (or at such lower price as is specified
in the appropriate Award Agreement). The repurchase rights granted in this
Section shall terminate on the closing of an initial public offering of the
Company's Stock under the Securities Act.
(d) Additional Provisions. Our Board may include additional transfer
restrictions and other provisions in any Incentive Award granted under the Plan,
including, without limitation, provisions requiring return to the Company of
shares of Stock acquired under the Plan and forfeiture of Options, SARs and
gains realized upon the disposition of shares of Stock acquired under the Plan
in the event that an Eligible Individual competes with the Company, solicits its
employees, customers or suppliers to discontinue their business relationships
with the Company or materially breaches an agreement with StarBand or its
Affiliates concerning confidentiality, noncompetition or nonsolicitation.
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12. TERMINATION OF SERVICE OR EMPLOYMENT
(a) No Change of Control. If an Optionee or Holder ceases to be
an employee or service-provider of StarBand and its Affiliates other than
because of his or her death, Disability or Retirement, any Option, SAR or
Restricted Stock grant that he or she holds that is not vested shall terminate
immediately, except as provided in Section 12(b) below with respect to a Change
of Control, and unless our Board determines otherwise. Except as otherwise
provided in Section 13 below (in the case of death, Disability or Retirement),
any vested Option or SAR will terminate (1) immediately, if the termination of
employment or service is involuntary and with Cause or (2) otherwise, upon the
expiration of three months after termination of the Optionee's or Holder's
employment or service with StarBand and its Affiliates or, if earlier,
expiration or termination of the Option or SAR under the Plan or the Agreement,
except that our Board has the authority to specify different provisions relating
to the vesting of Restricted Stock and the vesting and exercise of Options or
SARs in any Agreement.
(b) Change of Control. If, within 12 months following a Change
of Control, an Optionee's or Holder's service or employment with StarBand and
its Affiliates is terminated without Cause either involuntarily or by
Constructive Discharge, any Option, SAR or Restricted Stock grant that he or she
holds that is not vested shall become immediately vested in full and any such
Option or SAR shall terminate upon the expiration of three months after
termination of the Optionee's or Holder's employment or service with StarBand
and its Affiliates or, if earlier, expiration or termination of the Option or
SAR under the Plan or the Agreement, except as provided in Section 12(c) below;
provided, that our Board has the authority to specify different provisions
relating to the vesting of Restricted Stock and the vesting and exercise of
Options and SARs in any Agreement.
(c) Limitation on Parachute Payments. Notwithstanding any other
provision of the Plan or of any other agreement, contract, or understanding
heretofore or hereafter entered into by an Eligible Individual with the Company
or any Affiliate, except an agreement, contract, or understanding hereafter
entered into that expressly modifies or excludes application of this paragraph
(an "Other Agreement"), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to the Eligible
Individual (including groups or classes of participants or beneficiaries of
which the Eligible Individual is a member), whether or not such compensation is
deferred, is in cash, or is in the form of a benefit to or for the Eligible
Individual (a "Benefit Arrangement"), if the Eligible Individual is a
"disqualified individual," as defined in Section 280G(c) of the Code, any
Option, Restricted Stock or SAR held by that Eligible Individual and any right
to receive any payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to exercise, vesting,
payment, or
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benefit, taking into account all other rights, payments, or benefits to or for
the Eligible Individual under this Plan, all Other Agreements, and all Benefit
Arrangements, would cause any payment or benefit to the Eligible Individual
under this Plan to be considered a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code as then in effect (a "Parachute Payment") and(ii)
if, as a result of receiving a Parachute Payment, the aggregate after-tax
amounts received by the Eligible Individual under this Plan, all Other
Agreements, and all Benefit Arrangements would be less than the maximum
after-tax amount that could be received by the Eligible Individual without
causing any such payment or benefit to be considered a Parachute Payment. In the
event that the receipt of any such right to exercise, vesting, payment, or
benefit under this Plan, in conjunction with all other rights, payments, or
benefits to or for the Eligible Individual under any Other Agreement or any
Benefit Arrangement would cause the Eligible Individual to be considered to have
received a Parachute Payment under this Plan that would have the effect of
decreasing the after-tax amount received by the Eligible Individual as described
in clause (ii) of the preceding sentence, then the Eligible Individual shall
have the right, in the Eligible Individual's sole discretion, to designate those
rights, payments, or benefits under this Plan, any Other Agreements, and any
Benefit Arrangements that should be reduced or eliminated so as to avoid having
the payment or benefit to the Eligible Individual under this Plan be deemed to
be a Parachute Payment.
(d) Transfers; Leave of Absence. Our Board has discretion to
determine whether employment or service continues during a leave of absence on
military or government service. If an Optionee or Holder transfers from StarBand
to an Affiliate or vice versa or from one Affiliate to another, his or her
employment or service will not be deemed to have terminated because of the
transfer.
13. RIGHTS IN THE EVENT OF DEATH, DISABILITY OR RETIREMENT
(a) Death. If an Optionee or Holder of an SAR dies while
employed by or providing service to StarBand or an Affiliate, the personal
representative or beneficiaries of the Optionee or Holder, as applicable, shall
have the right within one year after the date of his or her death and before
termination of the Option or SAR to exercise, in whole or in part, any Option or
SAR held by the deceased person when he or she died, whether or not vested
before his or her death, and the Option or SAR will terminate if not exercised
within that period of time, except that our Board has the authority to specify
different provisions relating to the vesting and exercise of a deceased person's
Options or SARs in any Agreement.
(b) Disability. If an Optionee or Holder of an SAR terminates
employment or service with the Company and its Affiliates because of Disability,
then he or she shall have the right, within one year after such termination of
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employment or service and before termination of his or her Option or SAR, to
exercise, in whole or in part, any Option or SAR held by such person at the date
of his or her termination of employment or service, whether or not vested at the
time of such termination, and the Option or SAR will terminate if not exercised
within that period of time. However, our Board can specify different terms for
the vesting or exercise of an Option or SAR in the case of Disability in any
Agreement.
(c) Retirement. If an Optionee or Holder of an SAR terminates
employment or service with the Company and its Affiliates because of Retirement,
then he or she shall have the right to exercise, in whole or in part, the vested
portion of his or her Option or SAR until termination or expiration of such
Option or SAR under the terms of the Plan and Agreement. In such cases, the
unvested portion of any Option or SAR held by the Optionee or Holder shall
terminate upon termination of his or her employment or service. However, our
Board can specify different terms for the vesting or exercise of an Option or
SAR in the case of Retirement in any Agreement.
(d) Disability or Death of Holder of Restricted Stock. Except
as otherwise provided in an Agreement, upon the termination of employment or
service of a Holder with the Company because of Disability or Death (but not
Retirement), the shares of Restricted Stock held by such Holder shall be fully
vested.
14. USE OF PROCEEDS
The proceeds that StarBand receives from the issuance of Stock pursuant
to the Plan shall constitute its general funds.
15. REQUIREMENTS OF LAW
We will not issue any shares of Stock under the Plan if doing so would
result in a violation by us or anyone else of any law or regulation, including
any federal or state securities law. Specifically in connection with the
Securities Act, when we grant Restricted Stock, when Restricted Stock becomes
vested or when someone exercises an Option or SAR, unless a registration
statement under the Securities Act is in effect with respect to the shares of
Stock that we are supposed to issue, we will not be required to issue any shares
of Stock unless and until we have receive evidence satisfactory to us that the
such shares can be issued or sold under an exemption from registration under the
Securities Act. The Board's good faith determination in this connection shall be
final, binding, and conclusive.
We may, but shall not be obligated to, register any securities covered by
the Plan under the Securities Act. We are not obligated to take any action in
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order to allow an Optionee or Holder to exercise an Option or SAR or to cause
shares issued or sold pursuant to an Option or SAR or because of the grant or
vesting of Restricted Stock to comply with any law or regulation, including the
Securities Act. As to any jurisdiction that expressly imposes the requirement
that an Option or SAR shall not be exercisable or that we may not issue or sell
shares of Stock unless and until the shares are registered or are subject to an
available exemption from registration, the issuance or sale of shares of Stock
under circumstances in which such laws apply shall be deemed conditioned upon
the effectiveness of such registration or the availability of such an exemption.
16. AMENDMENT AND TERMINATION OF THE PLAN
Our Board may amend, suspend or terminate the Plan as to any shares of
Stock as to which Incentive Awards have not been granted. Without prior or
subsequent approval by a majority of the votes cast at a duly held meeting of
our stockholders or by written consent, in either case in accordance with our
Certificate of Incorporation and Bylaws, (a) change the requirements as to
eligibility to receive Incentive Stock Options or (b) increase the maximum
number of shares of Stock in the aggregate that may be sold or issued pursuant
to grants of Incentive Stock Options under the Plan (except as permitted under
Section 17).
Except as permitted under Section 17, no amendment, suspension or
termination of the Plan shall alter or impair any rights or obligations under
any Incentive Award previously granted under the Plan. However, with the consent
of the Optionee or Holder, our Board may amend any outstanding Agreement in a
manner not inconsistent with the Plan.
Amendments to the Plan not requiring stockholder approval shall become
effective when our Board adopts them. Amendments requiring stockholder approval
shall become effective when our Board adopts them, but no Incentive Stock Option
issued after the date of such amendment shall be exercised (unless the Option
could have been exercised without regard to the amendment) unless and until such
amendment shall have been approved by our stockholders. If such stockholder
approval is not obtained within 12 months of the Board's adoption of such
amendment, any Incentive Stock Options granted on or after the date of such
amendment shall be a Nonqualified Option to the extent that such amendment to
the Plan was required to enable StarBand to grant the Option as an Incentive
Stock Option.
17. EFFECT OF CHANGES IN CAPITALIZATION
(a) Changes in Stock. If the outstanding shares of our Stock
are increased or decreased or changed into or exchanged for a different number
or
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<PAGE> 14
kind of shares or other securities of the Company because of a Capitalization
Change, we will adjust the number and kinds of shares for which we may grant
Options and SARs and issue Restricted Stock.
In addition, we will adjust the number and kind of shares for which
Options and SARs are outstanding and we will use our reasonable best efforts to
adjust the Options and SARs so that the proportionate interest of the holder of
the Option or SAR immediately after the Capitalization Change will be the same
as immediately before that event. Any adjustment in outstanding Options and SARs
shall not change the aggregate Option Price payable with respect to shares
subject to the unexercised portion of the Option or SAR outstanding but shall
include a proportionate adjustment in the Option Price per share. In making
adjustments under this Section, we will follow the rules of Code section 424(a)
and the regulations under that section (whether or not the Option is an
Incentive Stock Option or the SAR relates to an Incentive Stock Option).
(b) Reorganizations in Which StarBand is the Surviving
Corporation not Involving a Change of Ownership. If the Company is the surviving
corporation in any reorganization, merger, or consolidation that is not a
Corporate Transaction, any Option granted under the Plan shall apply to the
securities that a holder of shares of Stock that the Optionee would have been
entitled to immediately following the transaction if the Optionee had exercised
the Option in full immediately before the transaction, with an adjustment of the
Option Price per share so that the aggregate Option Price shall not change. In
making adjustments under this Section, we will follow the rules of Code section
424(a) and the regulations under that section (whether or not the Option is an
Incentive Stock Option).
(c) Reorganization in Which StarBand Is Not the Surviving
Corporation or involving a Change of Ownership; Sale of Assets or Stock. Upon
any Corporate Transaction, the Plan and all outstanding Options and SARs shall
terminate, unless we or our Successor agrees in writing in connection with the
Corporate Transaction to continue the Plan and/or to assume the Options and SARs
or to substitute new Options and SARs covering the stock of a Successor for the
Options and to make appropriate equitable adjustments in the number and kind of
shares covered by the Options and the exercise prices, in which event the Plan
and Options and SARs shall continue on such basis. If the Options and SARs and
the Plan are terminated under this Section, each individual holding an
outstanding Option or SAR, whether or not vested, will be entitled to exercise
the Option or SAR for at least 30 days before the Option or SAR terminates,
except as provided in Section 12(c) above. The Board shall send written notice
of a Corporate Transaction that will result in such a termination to all
individuals who hold Options and SARs not later than the time when we give
notice of the proposed transaction to our stockholders. Unvested shares of
Restricted Stock shall not become vested or
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<PAGE> 15
forfeited in the case of a Corporate Transaction unless otherwise provided in
the Agreement with respect to those restricted shares.
(d) Adjustments. The Board shall make the adjustments to our
stock or securities under this Section 17 and the Board's reasonable good faith
determination in that respect shall be final, binding, and conclusive. Neither
we nor any Successor will be required to issue any fractional shares of Stock or
units of other securities, and any fractions resulting from any adjustment shall
be eliminated in each case by rounding to the nearest whole share or unit
(except that, in the case of an Incentive Stock Option, a fractional unit shall
be rounded downward).
(e) No Limitations on Company. The grant of Incentive Awards
pursuant to the Plan shall not affect or limit in any way our right or power to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge, consolidate, dissolve or liquidate, or to
sell or transfer all or any part of its business or assets without the consent
of any Optionee.
18. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Incentive Award granted or agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ or service of StarBand or any
Affiliate, or to interfere in any way with our right and authority to increase
or decrease the compensation of any individual at any time, or to terminate any
employment or other relationship we have with any individual. Our obligation to
pay any amounts or issue any Stock under the Plan is only a contractual
obligation to pay only those amounts, in the manner and under the conditions
prescribed in the Plan and applicable Agreements. We are not required to
transfer any amounts to a third party trustee or otherwise hold any amounts in
trust or escrow for payment to any participant or beneficiary under the Plan.
19. NONEXCLUSIVITY OF THE PLAN
The Plan does not limit in any way the right and authority of our Board
to adopt other incentive compensation arrangements that apply generally or that
are limited to single individuals, including restricted stock, stock options or
stock appreciation rights.
20. DEFINITIONS
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<PAGE> 16
For purposes of interpreting the Plan and related documents (including
Agreements), the following definitions shall apply:
"Affiliate" means any Person that controls, is controlled by or is under
common control with StarBand within the meaning of Rule 405 of Regulation C
under the Securities Act.
"Agreement" means a written Option or SAR Agreement, Restricted Stock
agreement or other agreement between the Company and an Eligible Individual that
evidences and sets out the terms and conditions of an Incentive Award.
"Board" means the board of directors of the Company.
"Cause" means conduct by the Eligible Individual amounting to (1) fraud
or dishonesty against the Company, (2) gross or willful misconduct that causes
substantial and material harm to the business and operations of the Company or
an Affiliate, (3) voluntary intoxication with alcohol or illegal drugs while on
the Company's premises during regular business hours, (4) a conviction or plea
of guilty or nolo contendere to a felony or a crime involving dishonesty, or (5)
a material breach or violation of the terms of any employment, confidentiality,
noncompetition or other agreement to which the Eligible Individual and the
Company are parties.
"Capitalization Change" means a recapitalization, reclassification, stock
split-up, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company, occurring after
the Effective Date.
"Change of Control" means the earliest date on which: (i) there shall be
a change in the ownership or control of the Company effected through either the
acquisition, directly or indirectly, by any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with the Company), of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than 50% of the combined voting power of the Company's
outstanding securities; (ii) as the result of, or in connection with, any cash
tender or exchange offer, merger, or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions, the
persons who were directors of the Company immediately before such transaction
shall cease to constitute at least a majority of the Board or the board of
directors of any corporation that is the successor to the Company (disregarding
changes in directors initiated by any stockholder who is entitled to
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<PAGE> 17
designate one or more members of the Board pursuant to a stockholders agreement
or the bylaws of the Company); (iii) there is a sale in one or a series of
transactions of all or substantially all of the assets of the Company other than
to a corporation or other entity controlled by or under common control with the
Company; or (iv) the Board approves any plan or proposal for the liquidation or
dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended, or the corresponding provision of any subsequently enacted
tax statute.
"Committee" means a committee of, and designated from time to time by
resolution of, our Board, which shall consist of no fewer than two members of
the Board. During any time when the Company has a class of equity securities
registered under Section 12 of the Exchange Act, each member of the Committee
shall qualify in all respects as a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act or any successor rule or regulation and an
"outside director" for purposes of Code section 162(m), unless the Board
determines that satisfaction of such requirements is impractical or unnecessary.
"Company" means StarBand Communications Inc., a Delaware corporation,
and any successor or assignee of StarBand Communications Inc. that assumes the
Plan or Incentive Awards granted hereunder. The terms we, us and our also refer
to the Company.
"Conditions" means the terms and conditions that must be met before
shares of Restricted Stock become vested.
"Constructive Discharge" means termination of employment or service by
an Eligible Individual on account of (i) any material reduction in the Eligible
Individual's compensation, (ii) any material reduction in the level or scope of
job responsibility or status of the Eligible Individual occurring without the
consent of the Eligible Individual, or (iii) any relocation to an office of the
Company which is more than 50 miles from the office where the Eligible
Individual was previously located to which the Eligible Individual has not
agreed.
"Corporate Transaction" means: the dissolution or liquidation of the
Company; a merger, consolidation or reorganization of the Company in which the
Company is not the surviving corporation; a sale of all or substantially all of
the assets of the Company to another corporation; or any other transaction
(including a merger or reorganization in which the Company is the surviving
corporation) that results in any person or entity (other than persons who were
stockholders of the
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<PAGE> 18
Company immediately before such transaction) owning more than 50% of the
combined voting power of all classes of stock of the Company.
"Disability" has the same meaning as provided in the long-term
disability plan maintained by the Company. In the event of a dispute, the
determination of Disability shall be made by the Board. If at any time during
the period that this Plan is in operation, the Company does not maintain a
long-term disability plan, Disability shall mean a permanent and total
disability as defined in Code Section 22(e)(3). In making its determination the
Board may, but is not required to, rely on advice of a physician competent in
the area to which such Disability relates. The Board may make the determination
in its sole discretion and any decision of the Board will be binding on all
parties.
"Effective Date" means May 26, 2000, the date as of which our Board
adopted the Plan.
"Eligible Individual" means any individual who is an employee, officer,
director, or consultant of StarBand or any Affiliate.
"Exchange Act" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
"Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq Small Cap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for the Stock (or the closing bid, if no
sa1es were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;
(ii) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall, be the
mean between the high bid and low asked prices for the Stock on the last market
trading day prior to the day of determination; or
(iii) In the absence of an established market for the Stock, the
Fair Market Value thereof shall be determined in good faith by the Board.
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<PAGE> 19
"Family" means the child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of
the Optionee or Holder, including adoptive relationships, or any person sharing
the Optionee or Holder's household (other than a tenant or employee).
"Family Trust" means a trust in which members of the Optionee or
Holder's Family have more than 50% of the beneficial interest, a foundation in
which members of the Optionee or Holder's Family (or the Optionee or Holder)
control the management of assets, and any other entity in which member of the
Optionee or Holder's family (or the Optionee or Holder) own more than 50% of the
voting interests.
"Holder" means an individual to whom the Company has granted shares of
Restricted Stock or an SAR under the Plan.
"Incentive Award" means an Option, an SAR or a Restricted Stock grant.
"Incentive Stock Option" means an Option that is an "incentive stock
option" within the meaning of Code section 422, or the corresponding provision
of any subsequently enacted tax statute, as amended from time to time.
"Nonqualified Option" means an Option that is not an Incentive Stock
Option.
"Option" means a written option granted by the Company pursuant to the
Plan under which the Optionee has the right to purchase one or more shares of
Stock at a specified price for a specified period of time.
"Option Agreement" means a written agreement between the Company and the
Optionee that sets out terms of an Option.
"Option Price" means the purchase price for each share of Stock subject
to an Option or the strike price under an SAR.
"Optionee" means an individual to whom the Company has granted an Option
under the Plan, while such Option continues to be outstanding.
"Person" means any person or group within the meaning of section
13(d)(3) or 14(d)(2) of the Exchange Act.
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<PAGE> 20
"Plan" means this StarBand Communications Inc. 2000 Stock Incentive
Plan.
"Qualified Plan" means an employee benefit plan (within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended)
maintained by the Company or a Subsidiary for the benefit of employees of the
Company or a Subsidiary.
"Restricted Stock" means shares of Stock awarded to pursuant to Section
6(b) of the Plan that may be subject to restrictions and a substantial risk of
forfeiture.
"Retirement" means voluntary retirement from employment or service with
the Company or an Affiliate after attainment of age 65.
"Securities Act" means the Securities Act of 1933, as now in effect or
as hereafter amended.
"Stock" means the common stock, par value $.05 per share, of StarBand
"Stock Appreciation Right" or SAR means a right granted pursuant to
Section 6(b) hereof to receive a payment from the Company in cash or shares of
Stock of an amount equal to the excess of (i) the fair market value of the
shares of Stock that are subject to the SAR, or portion thereof, that are
surrendered to the Company, over (ii) the Option Price of such shares. An SAR
may be granted alone or in tandem with an Option.
"Subsidiary" means any "subsidiary corporation" or "parent corporation"
of the Company within the meaning of Code section 424(f).
"Successor" means any corporation that is a successor corporation to
StarBand in a transaction described in Section 17 of the Plan, and any parent or
subsidiary corporation thereof.
"StarBand" means the Company.
"10% Stockholder" means an individual who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of StarBand
or any Subsidiary within the meaning of Code section 422(b)(6) and 424(d).
"We, us and our" refer to the Company.
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<PAGE> 21
* * *
The Plan was duly adopted and approved by the Board on the 26th day of
May, 2000 and was amended, ratified and confirmed by the Board on the 19th day
of September, 2000.
/s/ WILLIAM MCMOIL
---------------------------------
Secretary
The Plan was duly adopted and approved by the stockholders of StarBand
on the 19th day of September, 2000.
/s/ WILLIAM MCMOIL
---------------------------------
Secretary
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