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EXHIBIT 4.1
On August 1, 2000, the Board of Directors of Aperian, Inc. (formerly
MSI Holdings, Inc.) adopted the following 2000 Stock Incentive Plan:
APERIAN, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose.
Aperian, Inc., a Delaware corporation (herein, together with its
successors, referred to as the "Company"), by means of this 2000 Stock Incentive
Plan (the "Plan"), desires to afford certain individuals and employees of the
Company and any parent corporation or subsidiary corporation thereof now
existing or hereafter formed or acquired (such parent and subsidiary
corporations referred to herein as "Related Entities") who are responsible for
the continued growth of the Company an opportunity to acquire a proprietary
interest in the Company and thus to create in such persons an increased interest
in and a greater concern for the welfare of the Company and any Related
Entities. As used in the Plan, the terms "parent corporation" and "subsidiary
corporation" shall mean, respectively, a corporation within the definition of
such terms contained in Sections 424(e) and 424(f) of the Internal Revenue Code
of 1986, as amended (the "Code"). All capitalized terms not otherwise defined in
Sections 1 through 17 of this Plan shall have the meanings set forth in Section
18 of this Plan.
The stock options described in Sections 6 and 7 (the "Options"), and
other stock or equity-based awards described in Section 8 (the "Awards"), are a
matter of separate inducement and, except as specifically provided herein or
elsewhere, are not in lieu of any salary or other compensation for services.
2. Administration.
(a) Committee. The Board of Directors of the Company (the "Board of
Directors") shall administer the Plan with respect to all Employees (as
hereinafter defined) or Eligible Non-Employees (as hereinafter defined) or may
delegate all or part of its duties under this Plan to any committee or
sub-committee appointed by the Board of Directors (the "Committee") or to any
officer or committee of officers of the Company, subject in each case to such
conditions and limitations as the Board of Directors may establish and subject
to the following sentence. Except for references in Sections 2(a), 2(b), and
2(c) and unless the context otherwise requires, references herein to the
Committee shall also refer to the Board of Directors as administrator of the
Plan for Employees or Eligible Non-Employees or to the appropriate delegate of
the Committee or the Board of Directors.
(b) Duration, Removal, Etc. The members of the Committee shall serve at
the pleasure of the Board of Directors, which shall have the power, at any time
and from time to time, to remove members from or add members to the Committee.
Removal from the Committee may be with or without cause. Any individual serving
as a member of the Committee shall have the right to resign from membership in
the Committee by written notice to the Board of Directors. The Board of
Directors, and not the remaining members of the Committee, shall have the power
and authority to fill vacancies on the Committee, however caused.
(c) Meetings and Actions of Committee. The Board of Directors shall
designate which of the Committee members shall be the chairman of the Committee.
If the Board of Directors fails to designate a Committee chairman, the members
of the Committee shall elect one of the Committee members as chairman, who shall
act as chairman until he ceases to be a member of the Committee or until the
Board of Directors elects a new chairman. The Committee shall hold its meetings
at those times and places as the chairman of the Committee may determine. At all
meetings of the Committee, a quorum for the transaction of business shall be
required, and a quorum shall be deemed present if at least a majority of the
members of the Committee are present. At any meeting of the Committee, each
member shall have one vote. All decisions and determinations of the Committee
shall be made by the majority vote or majority decision of all of its members
present at a meeting at which a quorum is present; provided, however, that any
decision or determination reduced to writing and signed by all of the members of
the Committee shall be as fully effective as if it had been made at a meeting
that was duly called and held. The Committee may make any rules and regulations
as it may deem advisable for the conduct of its business that are not
inconsistent with the provisions of the Plan, the certificate of incorporation
of the Company or the by-laws of the Company.
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3. Shares Available.
Subject to the adjustments provided in Section 10, the maximum
aggregate number of shares of common stock, $0.10 par value, of the Company
("Common Stock") in respect of which Options and Awards may be granted for all
purposes under the Plan shall be 2,000,000 shares, provided, however, that no
more than 10% of such shares shall be available for issuance under Awards
granted pursuant to Section 8. If, for any reason, any shares as to which
Options have been granted cease to be subject to purchase thereunder, including
the expiration of such Option, the termination of such Option prior to exercise,
or the forfeiture of such Option, or any shares as to which Awards have been
granted are forfeited or surrendered, such shares shall thereafter be available
for grants under the Plan. Options or Awards granted under the Plan may be
fulfilled in accordance with the terms of the Plan with (i) authorized and
unissued shares of the Common Stock, (ii) issued shares of such Common Stock
held in the Company's treasury, or (iii) issued shares of Common Stock
reacquired by the Company in each situation as the Board of Directors or the
Committee may determine from time to time.
4. Eligibility and Bases of Participation.
Grants of Non-Qualified Options (as hereinafter defined) may be made
under the Plan, subject to and in accordance with Section 6, to Employees, and
subject to and in accordance with Section 7, to any Eligible Non-Employee. As
used herein, the term "Employee" shall mean any employee of the Company or any
Related Entity who is regularly employed on a salaried basis and who is so
employed on the date of such grant; provided, that all officers or directors of
the Company and any employees of the Company or any Related Entity who perform
functions equivalent to an officer of the Company shall not be Employees. As
used herein, the term "Eligible Non-Employee" shall mean any person or entity of
any nature whatsoever, specifically including an individual, a firm, a company,
a corporation, a partnership, a trust, or other entity (collectively, a
"Person"), that the Committee designates as eligible for a grant of Options
pursuant to this Plan because such Person performs bona fide consulting,
advisory, or other services for the Company or any Related Entity (other than
services in connection with the offer or sale of securities in a capital-raising
transaction) and the Board of Directors or the Committee determines that the
Person has a direct and significant effect on the financial development of the
Company or any Related Entity; provided, that all officers or directors of the
Company and any employees of the Company or any Related Entity who perform
functions equivalent to an officer of the Company shall not be Eligible
Non-Employees.
Grants of Awards may be made under the Plan, subject to and in
accordance with Section 8, to Employees and Eligible Non-Employees.
The adoption of this Plan shall not be deemed to give any Person a
right to be granted any Options or any Awards.
Notwithstanding any other provision of this Plan to the contrary, with
respect to the grant of any Options or Awards to any Employee or Eligible
Non-Employee, the Committee shall first determine the number of shares (or
units) in respect of which Options or Awards are to be granted to such Employee
or Eligible Non-Employee and shall then cause to be granted to such Employee or
Eligible Non-Employee an Option exercisable for such shares or an Award for such
shares (or units). The exercise price per share of Common Stock under each
Option and the value of each share of Common Stock (or unit) under each Award
shall be fixed by the Committee at the time of grant of the Option or Award and
shall not be less than 85% of the Fair Market Value of a share of Common Stock
on the day preceding the date of grant.
5. Authority of Committee.
Subject to the express provisions of the Plan and any applicable law
with which the Company intends the Plan to comply, the Committee shall have the
authority, in its sole and absolute discretion, (a) to adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the Plan,
including without limitation to adopt and observe such procedures concerning the
counting of Options or Awards against the Plan and individual maximums as it may
deem appropriate from time to time; (b) to determine the Employees or Eligible
Non-Employees to whom, and the time or times at which, Options and Awards shall
be granted; (c) to determine the number of shares of Common Stock (or units)
that shall be the subject of each Option or Award; (d) to determine the terms
and provisions of each agreement
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evidencing Options or Awards granted hereunder (which need not be identical),
including provisions defining or otherwise relating to (i) the term and the
period or periods and extent of exerciseability of the Options, (ii) the
forfeitability of any shares (or units) or any restrictions on shares (or units)
subject to an Award, (iii) the extent to which the transferability of shares of
Common Stock issued or transferred pursuant to any Option or Award is
restricted, (iv) the effect of termination of employment on the Option or Award,
(iv) the effect of approved leaves of absence (consistent with any applicable
provisions of the Code or Treasury regulations) and (v) the establishment of
procedures for an optionee to exercise an Option by delivering that number of
shares of Common Stock already owned by such optionee having an aggregate Fair
Market Value which shall equal the Option exercise price; provided, however,
that (A) no such procedure shall be available if there is an opinion of the
Company's independent accounting firm that the use of such a procedure could
negatively affect the financial statements of the Company or a Related Entity,
and (B) notwithstanding any provision in the Plan to the contrary, no such
shares shall be used to pay the Option exercise price unless such shares shall
have been held by the optionee for a period of six months prior to the date of
exercise of the Option; (e) to accelerate, pursuant to Section 9 or otherwise,
the vesting or exerciseability (or time of exerciseability) of all or part of
any Option, or the vesting or lapsing of restrictions on all or part of any
Award, that has been granted; (f) to construe the respective agreements
evidencing Options and Awards pursuant to the Plan; (g) to make determinations
of the Fair Market Value of the Common Stock pursuant to the Plan; (h) to
delegate its duties under the Plan to such agents as it may appoint from time to
time, subject to the second sentence of Section 2(a); and (i) to make all other
determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee deems
appropriate. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan, in any Option, in any Award, or in any
agreements evidencing Options or Awards granted hereunder in the manner and to
the extent it deems necessary or desirable to carry the Plan into effect, and
the Committee shall be the sole and final judge of that necessity or
desirability. The determinations of the Committee on the matters referred to in
this Section 5 shall be final and conclusive. The Committee shall not have the
power to appoint members of the Committee or to terminate, modify, or amend the
Plan. Those powers are vested in the Board of Directors.
An Option shall be vested and/or exercisable, and the restrictions on
any Awards shall lapse, in whole or in part and at such times as determined by
the Committee. The Committee in its discretion may provide that an Option shall
be vested or exercisable, and the restrictions on any Awards shall lapse, only
upon the attainment of one or more performance goals or targets established by
the Committee, which are based on (i) the price of a share of Common Stock, (ii)
the Company's earnings per share, (iii) the Company's market share, (iv) the
market share of a business unit of the Company designated by the Committee, (v)
the Company's sales, (vi) the sales of a business unit of the Company designated
by the Committee, (vii) the net income (before or after taxes) of the Company or
a business unit of the Company designated by the Committee, (viii) the cash flow
return on investment of the Company or any business unit of the Company
designated by the Committee, (ix) the earnings before or after interest, taxes,
depreciation, and/or amortization of the Company or any business unit of the
Company designated by the Committee, (x) the economic value added, or (xi) the
return on stockholders' equity achieved by the Company.
From time to time, the Board of Directors and appropriate officers of
the Company shall be and are authorized to take whatever actions are necessary
to file required documents with governmental authorities, stock exchanges, and
other appropriate Persons to make shares of Common Stock available for issuance
pursuant to agreements evidencing Options or Awards granted hereunder.
6. Stock Options for Employees.
Subject to the express provisions of this Plan, the Committee shall
have the authority to to grant non-qualified stock options (options which do not
qualify under Section 422 of the Code) ("Non-Qualified Options") to Employees.
The terms and conditions of the Options granted under this Section 6 shall be
determined from time to time by the Committee; provided, however, that the
Options granted under this Section 6 shall be subject to all terms and
provisions of the Plan (other than Sections 7 and 8), including the following:
(a) Option Exercise Price. Subject to Section 4, the Committee shall
establish the Option exercise price at the time any Option is granted at such
amount as the Committee shall determine. The Option exercise price shall not be
less than 85% of the Fair Market Value of a share of Common Stock on the day
preceding the date of grant. The Option exercise price shall be subject to
adjustment in accordance with the provisions of Section 10 of the Plan.
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(b) Payment. The price per share of Common Stock with respect to each
Option exercise shall be payable at the time of such exercise. Such price shall
be payable in cash or by any other means acceptable to the Committee, including
delivery to the Company of shares of Common Stock owned by the optionee pursuant
to a procedure created pursuant to Section 5(d) of the Plan. Shares delivered to
the Company in payment of the Option exercise price shall be valued at the Fair
Market Value of the Common Stock on the day preceding the date of the exercise
of the Option.
(c) Reserved.
(d) Exerciseability of Stock Option. Subject to Section 9, each Option
shall be exercisable in one or more installments as the Committee may determine
at the time of the grant.
(e) Death. If any optionee's employment with the Company or a Related
Entity terminates due to the death of such optionee, the estate of such
optionee, or a Person who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of the optionee, shall have the right
to exercise such Option in accordance with its terms at any time and from time
to time within 180 days after the date of death unless a shorter or longer
period is expressly provided in such Option (but in no event prior to the 90th
day after the death of such optionee) or established by the Committee pursuant
to Section 9 (but in no event after the expiration date of such Option).
(f) Disability. If the employment of any optionee terminates because of
his Disability, such optionee or his legal representative shall have the right
to exercise the Option in accordance with its terms at any time and from time to
time within 180 days after the date of such termination unless a shorter or
longer period is expressly provided in such Option (but in no event prior to the
90th day after the date of such termination of employment) or established by the
Committee pursuant to Section 9 (but not after the expiration date of the
Option).
(g) Termination for Good Cause. Unless an optionee's Option expressly
provides otherwise or the Committee determines otherwise, such optionee shall
immediately forfeit all rights under his Option as of the date of termination of
employment with the Company or Related Entity, except as to the shares of stock
already purchased thereunder, if the employment of such optionee with the
Company or a Related Entity is terminated by the Company or any Related Entity
for Good Cause. The determination that there exists Good Cause for termination
shall be made by the Committee (unless otherwise agreed to in writing by the
Company and the optionee), and any decision in respect thereof by the Committee
shall be final and binding on all parties in interest.
(h) Other Termination of Employment. If the employment of an optionee
with the Company or a Related Entity terminates for any reason other than those
specified in Sections 6(e), 6(f) or 6(g) above, such optionee shall have the
right to exercise his Option in accordance with its terms, within one year after
the date of such termination, unless a shorter or longer period is expressly
provided in such Option or established by the Committee pursuant to Section 9
(but not after the expiration date of the Option).
(i) Reserved.
7. Stock Option Grants to Eligible Non-Employees.
(a) Subject to the express provisions of this Plan, the Committee shall
have the authority to grant Non-Qualified Options to Eligible Non-Employees. The
terms and conditions of the Options granted under this Section 7 shall be
determined from time to time by the Committee; provided, however, that the
Options granted under this Section 7 shall be subject to all terms and
provisions of the Plan (other than Sections 6 and 8), including the following:
(i) Option Exercise Price. Subject to Section 4, the Committee
shall establish the Option exercise price at the time any Non-Qualified
Option is granted at such amount as the Committee shall determine,
provided however, that the exercise price shall not be less than 85% of
the Fair Market Value per share of Common Stock on the day preceding
the Option's date of grant. The Option exercise price shall be subject
to adjustment in accordance with the provisions of Section 10 of the
Plan.
(ii) Payment. The price per share of Common Stock with respect
to each Option exercise shall be payable at the time of such exercise.
Such price shall be payable in cash or by any other means acceptable to
the Committee, including delivery to the Company of shares of Common
Stock owned by the optionee
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pursuant to a procedure created pursuant to Section 5(d) of the Plan.
Shares delivered to the Company in payment of the Option exercise price
shall be valued at the Fair Market Value of the Common Stock on the day
preceding the date of the exercise of the Option.
(iii) Exerciseability of Stock Option. Subject to Section 9,
each Option shall be exercisable in one or more installments as the
Committee may determine at the time of the grant. No Option shall be
exercisable after the expiration of ten years from the date of grant of
the Option, unless otherwise expressly provided in such Option.
(iv) Death. If the retention by the Company or any Related
Entity of the services of any Eligible Non-Employee terminates because
of his death, the estate of such optionee, or a Person who acquired the
right to exercise such Option by bequest or inheritance or by reason of
the death of the optionee, shall have the right to exercise such Option
in accordance with its terms, at any time and from time to time within
180 days after the date of death unless a shorter or longer period is
expressly provided in such Option (but in no event prior to the 90th
day after the death of such optionee) or established by the Committee
pursuant to Section 9 (but in no event after the expiration date of
such Option).
(v) Disability. If the retention by the Company or any Related
Entity of the services of any Eligible Non-Employee terminates because
of his Disability, such optionee or his legal representative shall have
the right to exercise the Option in accordance with its terms at any
time and from time to time within 180 days after the date of the
optionee's termination unless a shorter or longer period is expressly
provided in such Option (but in no event prior to the 90th day after
the date of such termination of employment) or established by the
Committee pursuant to Section 9 (but not after the expiration of the
Option).
(vi) Termination for Good Cause. If the retention by the
Company or any Related Entity of the services of any Eligible
Non-Employee is terminated for Good Cause, then such optionee shall
immediately forfeit his rights under his Option except as to the shares
of stock already purchased. The determination that there exists Good
Cause for termination shall be made by the Committee (unless otherwise
agreed to in writing by the Company and the optionee) and any decision
in respect thereof by the Committee shall be final and binding on all
parties in interest.
(vii) Other Termination of Relationship. If the retention by
the Company or any Related Entity of the services of any Eligible
Non-Employee terminates for any reason other than those specified in
subsections 7(a)(iv), (a)(v) or (a)(vi) above, such optionee shall have
the right to exercise his or its Option in accordance with its terms
within one year after the date of such termination, unless a shorter or
longer period is expressly provided in such Option or established by
the Committee pursuant to Section 9 (but not after the expiration date
of the Option).
(b) Reserved.
8. Awards.
Subject to the express provisions of this Plan, the Committee shall
have the authority to grant Awards of shares of Common Stock or other
equity-based awards to Employees or Eligible Non-Employees. The terms and
conditions of the Awards granted under this Section 8 shall be determined from
time to time by the Committee and set forth in an agreement evidencing such
Award; provided, however, that the Awards granted under this Section 8 shall be
subject to all terms and provisions of the Plan (other than Sections 6 and 7),
including the following:
(a) Price. Subject to Section 4, the Committee shall establish the
price or value of the shares of Common Stock, or the value of
units, subject to an Award.
(b) Payment. The Committee shall determine the amount and form of
any payment (if applicable) for Common Stock received pursuant
to an Award, provided, that, in the absence of such a
determination, an award-holder shall not be required to make
any payment for Common Stock received pursuant to an Award,
except to the extent otherwise required by law.
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(c) Forfeiture Restrictions. An Award or shares of Common Stock
that may be the subject of an Award may be subject to
restrictions (the "Forfeiture Restrictions") such that an
award-holder will have an obligation to forfeit or surrender
all or part of the Award or any shares received under an Award
under the Forfeiture Restrictions. The Forfeiture Restrictions
shall be determined by the Committee in its sole discretion,
and the Committee may provide that the Forfeiture Restrictions
shall lapse upon (i) the attainment of one or more performance
goals or targets established by the Committee, which are based
on (A) the price of a share of Common Stock, (B) the Company's
earnings per share, (C) the Company's market share, (D) the
market share of a business unit of the Company designated by
the Committee, (E) the Company's sales, (F) the sales of a
business unit of the Company designated by the Committee, (G)
the net income (before or after taxes) of the Company or a
business unit of the Company designated by the Committee, (H)
the cash flow return on investment of the Company or any
business unit of the Company designated by the Committee, (I)
the earnings before or after interest, taxes, depreciation,
and/or amortization of the Company or any business unit of the
Company designated by the Committee, (J) the economic value
added, or (K) the return on stockholders' equity achieved by
the Company; (ii) the award-holder's continued employment or
service with the Company for a specified period of time; (iii)
the occurrence of any event or the satisfaction of any other
condition specified by the Committee in its sole discretion;
or (iv) a combination of any of the foregoing. Each Award may,
in the discretion of the Committee, have different Forfeiture
Restrictions.
(d) Term. The term of any Award shall not exceed ten years from
the date of grant of the Award.
9. Change of Control.
Except as otherwise expressly provided in a particular Option or Award,
if (i) a Change of Control shall occur or (ii) the Company shall enter into an
agreement providing for a Change of Control, then the Committee may declare any
or all Options or Awards outstanding under the Plan to be exercisable in full at
such time or times as the Committee shall determine and the Company may purchase
any or all of such Options or Awards for an amount of cash equal to the amount
that could have been attained upon the exercise of such Options or Awards or the
realization of the optionee's or award-holder's rights had such Option or Award
been currently exercisable. Each Option and Award accelerated by the Committee
pursuant to the preceding sentence shall terminate, notwithstanding any express
provision thereof or any other provision of the Plan, on such date (not later
than the stated exercise date) as the Committee shall determine.
10. Adjustment of Shares.
Except as otherwise contemplated in Section 9, and unless otherwise
expressly provided in a particular Option or Award, in the event that, by reason
of any merger, consolidation, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of the Company (collectively, a "Reorganization"), the Common Stock is
substituted, combined, or changed into any cash, property, or other securities,
or the shares of Common Stock are changed into a greater or lesser number of
shares of Common Stock, the number and/or kind of shares and/or interests
subject to an Option or Award and the per share price or value thereof shall be
appropriately adjusted by the Committee to give appropriate effect to such
Reorganization. Any fractional shares or interests resulting from such
adjustment shall be eliminated. The maximum aggregate number of shares of Common
Stock in respect of which Options or Awards may be granted under this Plan as
provided for in Section 3, and the maximum number that may be granted to any one
individual in a calendar year pursuant to Section 21, shall be subject to
adjustment as contemplated above.
Except as otherwise contemplated in Section 9, and unless otherwise
expressly provided in a particular Option or Award, in the event that the
Company is not the surviving entity of a Reorganization and, following such
Reorganization and, in connection with such Reorganization, any optionee or
award-holder will hold Options or Awards issued pursuant to this Plan which have
not been exercised, canceled, forfeited, or terminated in connection therewith,
the Company shall cause such Options or Awards to be assumed (or canceled and
replacement options or awards issued) by the surviving entity or a Related
Entity with such changes in the number and/or kind of shares and/or interests
subject to an Option and Award and the per share price or the value thereof as
the Committee determines is necessary to give appropriate effect to such
Reorganization. In the event of any perceived conflict between the provisions of
Section 9 and this Section 10, the Committee's determination under Section 9
shall control.
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11. Assignment or Transfer.
(a) Reserved.
(b) Transfer of Non-Qualified Options or Awards.
(i) Permitted Transferees. The Committee may, in its
discretion, permit an optionee or award-holder to transfer all or any
portion of a Non-Qualified Option or Award, or authorize all or a
portion of any Non-Qualified Option or Award to be granted to an
optionee or award-holder to be on terms that permit transfer by such
optionee or award-holder, to (A) the spouse, former spouse, children,
stepchildren, grandchildren, parents, stepparents, grandparents,
siblings, nieces, nephews, mother-in-law, father-in-law, sons-in-law,
daughters-in-law, brothers-in-law, or sisters-in-law of the optionee or
award-holder, including adoptive relationships, or any other person
sharing the optionee's or award-holder's household (other than a tenant
or employee) (collectively, "Immediate Family Members"), (B) a trust or
trusts in which such Immediate Family Members have more than fifty
percent of the beneficial interest, (C) a foundation in which such
Immediate Family Members (or the optionee or award-holder) control the
management of assets, or (D) any other entity in which such Immediate
Family Members (or the optionee or award-holder) own more than fifty
percent of the voting interests (collectively, "Permitted
Transferees"); provided that (x) there may be no consideration for any
such transfer, (y) subsequent transfers of Non-Qualified Options or
Awards transferred as provided above shall be prohibited except
subsequent transfers back to the grantee of the Option or Award and
transfers to other Permitted Transferees of the grantee of the Option
or Award.
(ii) Domestic Relations Orders. In the Committee's sole
discretion, Non-Qualified Options or Awards may be transferred pursuant
to domestic relations orders entered or approved by a court of
competent jurisdiction upon delivery to the Company of written notice
of such transfer and a certified copy of such order.
(iii) Other Transfers and Exercise Rights. Except as expressly
permitted by Sections 11(b)(i) and 11(b)(ii), Non-Qualified Options
requiring exercise, or any Awards subject to Forfeiture Restrictions,
shall not be transferable other than by will or the laws of descent and
distribution. In the event that a legal representative has been
appointed in connection with the Disability of an optionee, the
optionee's Options may be exercised by the legal representative.
(iv) Effect of Transfer. Following the transfer of any
Non-Qualified Option as contemplated by Sections 11(b)(i), 11(b)(ii)
and 11(b)(iii), (A) such Non-Qualified Option or Award shall continue
to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that the term "optionee" shall
be deemed to refer to the Permitted Transferee, the recipient under a
domestic relations order, or the estate or heirs of a deceased
optionee, as applicable, to the extent appropriate to enable the
optionee to exercise the transferred Non-Qualified Option in accordance
with the terms of this Plan and applicable law, (B) such Award shall
continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that the term
"award-holder" shall be deemed to refer to the Permitted Transferee,
the recipient under a domestic relations order, or the estate or heirs
of a deceased award-holder, as applicable and to the extent
appropriate, (C) the provisions of Sections 7(a)(iv) through (vii)
hereof shall continue to be applied with respect to the original
optionee and, following the occurrence of any such events described
therein the Non-Qualified Options shall be exercisable by the Permitted
Transferee, the recipient under a domestic relations order, or the
estate or heirs of a deceased Holder, as applicable, only to the extent
and for the periods specified in Sections 7(a)(iv) through (vii), and
(D) in the discretion of the Committee, all voting control in the
Common Stock transferred pursuant to the exercise of Non-Qualified
Options or acquired pursuant to an Award shall be retained in the
grantee of the Option or Award.
(c) Procedures and Restrictions. Any optionee or award-holder desiring
to transfer an Option or Award as permitted under Section 11(b) shall make
application therefor in the manner and time specified by the Committee and shall
comply with such other requirements as the Committee may require to assure
compliance with all applicable securities laws. The Committee shall not give
permission for such a transfer if (i) it would give rise to short-swing
liability under Section 16(b) of the Exchange Act, or (ii) it may not be made in
compliance with all applicable federal, state and foreign securities laws.
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12. Compliance with Securities Laws.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities law to permit exercise of any option or to issue any Common Stock in
violation of the Securities Act or any applicable state securities law. Each
optionee or award-holder (or, in the event of his death or, in the event a legal
representative has been appointed in connection with his Disability, the Person
exercising the Option or Award) shall, as a condition to his right to exercise
any Option, deliver to the Company an agreement or certificate containing such
representations, warranties and covenants as the Company may deem necessary or
appropriate to ensure that the issuance of shares of Common Stock pursuant to
such exercise is not required to be registered under the Securities Act or any
applicable state securities law.
Certificates for shares of Common Stock, when issued pursuant to the
Plan, may have substantially the following legend, or statements of other
applicable restrictions, endorsed thereon, and may not be immediately
transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT
VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Common Stock issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
13. Withholding Taxes.
By acceptance of the Option or Award, the optionee or award-holder will
be deemed to (i) agree to reimburse the Company or Related Entity by which the
optionee or award-holder is employed for any federal, state, or local taxes
required by any government to be withheld or otherwise deducted by such
corporation in connection with such Option or Award; (ii) authorize the Company
or any Related Entity by which the optionee or award-holder is employed to
withhold from any cash compensation paid to the optionee or in the optionee's
behalf, or to the award-holder or on the award-holder's behalf, an amount
sufficient to discharge any federal, state, and local taxes imposed on the
Company, or the Related Entity by which the optionee or award-holder is
employed, and which otherwise has not been reimbursed by the optionee or
award-holder, in connection with the Option or Award; and (iii) agree that the
Company may, in its discretion, hold the stock certificate to which the optionee
or award-holder is entitled in connection with the Option or Award as security
for the payment of the aforementioned withholding tax liability, until cash
sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable in connection
with the Option or Award having a Fair Market Value which is equal to the amount
to be withheld.
14. Costs and Expenses.
The costs and expenses of administering the Plan shall be borne by the
Company and shall not be charged against any Option or Award nor to any
individual receiving an Option or Award.
15. Funding of Plan.
The Plan shall be unfunded. The Company shall not be required to make
any segregation of assets to ensure the payment of any Option or Award under the
Plan.
16. Other Incentive Plans.
The adoption of the Plan does not preclude the adoption by appropriate
means of any other plan for employees or other individuals who provide services
to the Company or Related Entity.
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17. Effect on Employment.
Nothing contained in the Plan or any agreement related hereto or
referred to herein shall affect, or be construed as affecting, the terms of
employment of any Employee except to the extent specifically provided herein or
therein. Nothing contained in the Plan or any agreement related hereto or
referred to herein shall impose, or be construed as imposing, an obligation on
(i) the Company or any Related Entity to continue the employment of any
Employee, and (ii) any Employee to remain in the employ of the Company or any
Related Entity.
18. Definitions.
In addition to the terms specifically defined elsewhere in the Plan, as
used in the Plan, the following terms shall have the respective meanings
indicated below unless another definition is agreed to in writing by the Company
and the optionee in an option grant agreement with respect to such term or a
similar term:
(a) "Affiliate" shall mean, as to any Person, a Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person.
(b) "Award" shall have the meaning set forth in Section 1.
(c) "Board of Directors" shall have the meaning set forth in Section 2
hereof.
(d) "Change of Control" shall mean the first to occur of the following
events: (i) any sale, lease, exchange, or other transfer (in one transaction or
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act, (ii) a majority of the Board of Directors of the Company
shall consist of Persons who are not Continuing Directors; (iii) the acquisition
after the date of acceptance of this Plan by any Person or Group of the power,
directly or indirectly, to vote or direct the voting of securities having more
than 50% of the ordinary voting power for the election of directors of the
Company, or (iv) the approval by the stockholders of the Company of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or such surviving entity's parent) at least fifty percent (50%)
of the total voting power represented by the voting securities of the Company or
such surviving entity or such surviving entity's parent outstanding immediately
after such merger or consolidation.
(e) "Code" shall have the meaning set forth in Section 1 hereof.
(f) "Committee" shall have the meaning set forth in Section 2 hereof.
(g) "Common Stock" shall have the meaning set forth in Section 3
hereof.
(h) "Company" shall have the meaning set forth in Section 1 hereof.
(i) "Continuing Director" shall mean, as of the date of determination,
any Person who (i) was a member of the Board of Directors of the Company on the
date of adoption of this Plan or (ii) was nominated for election or elected to
the Board of Directors of the Company with the affirmative vote of a majority of
the Continuing Directors who were members of such Board of Directors at the time
of such nomination or election.
(j) "Disability" shall mean permanent disability as defined under
Section 22(e)(3) of the Code.
(k) "Eligible Non-Employee" shall have the meaning set forth in Section
4 hereof.
(l) "Employee" shall have the meaning set forth in Section 4 hereof.
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(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value", shall, as it relates to the Common Stock,
mean, at the option of the Committee, the average of the high and low prices or
the closing price of such Common Stock as reported on the principal national
securities exchange on which the shares of Common Stock are then listed or the
NASDAQ National Market, as applicable, on the date specified herein for such a
determination, or if there were no sales on such date, on the next succeeding
day or immediately preceding day on which there were sales, or if such Common
Stock is not listed on a national securities exchange or the NASDAQ National
Market, the last reported bid price in the over-the-counter market, or if such
shares are not traded in the over-the-counter market, the per share cash price
for which all of the outstanding Common Stock could be sold to a willing
purchaser in an arms length transaction (without regard to minority discount,
absence of liquidity, or transfer restrictions imposed by any applicable law or
agreement) at the date of the event giving rise to a need for a determination.
Except as may be otherwise expressly provided in a particular Option or Award,
Fair Market Value shall be determined in good faith by the Committee.
(o) "Good Cause", with respect to any Employee, shall mean (unless
another definition is agreed to in writing by the Company and the optionee)
termination by action of the Board of Directors that the Committee determines is
because of: (A) the optionee's or award-holder's conviction of, or plea of nolo
contendere to, a felony or a crime involving moral turpitude; (B) the optionee's
or award-holder's personal dishonesty, incompetence, willful misconduct, willful
violation of any law, rule, or regulation (other than minor traffic violations
or similar offenses) or breach of fiduciary duty which involves personal profit;
(C) the optionee's or award-holder's commission of material mismanagement in the
conduct of his duties as assigned to him by the Board of Directors or the
optionee's supervising officer or officers of the Company or any Related Entity;
(D) the optionee's or award-holder's willful failure to execute or comply with
the policies of the Company or any Related Entity or his stated duties as
established by the Board of Directors or the optionee's or award-holder's
supervising officer or officers of the Company or any Related Entity, or the
optionee's or award-holder's intentional failure to perform the optionee's or
award-holder's stated duties; or (E) substance abuse or addiction on the part of
the optionee or award-holder. "Good Cause", with respect to any Eligible
Non-Employee, shall mean (unless another definition is agreed to in writing by
the Company and the optionee or award-holder) termination by action of the Board
of Directors because of: (A) the optionee's or award-holder's conviction of, or
plea of nolo contendere to, a felony or a crime involving moral turpitude; (B)
the optionee's or award-holder's personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule, or regulation (other than minor
traffic violations or similar offenses) or breach of fiduciary duty which
involves personal profit; (C) the optionee's or award-holder's commission of
material mismanagement in providing services to the Company or any Related
Entity; (D) the optionee's or award-holder's willful failure to comply with the
policies of the Company in providing services to the Company or any Related
Entity, or the optionee's or award-holder's intentional failure to perform the
services for which the optionee or award-holder has been engaged; (E) substance
abuse or addiction on the part of the optionee or award-holder; or (F) the
optionee's or award-holder's willfully making any material misrepresentation or
willfully omitting to disclose any material fact to the board of directors of
the Company or any Related Entity with respect to the business of the Company or
any Related Entity.
(p) "Holding Period" shall have the meaning set forth in Section 5
hereof.
(q) Reserved.
(r) The terms "include," "included" or "including" when used herein
shall mean "including, but not limited to."
(s) "Non-Qualified Options" shall have the meaning set forth in Section
6 hereof.
(t) "Options" shall have the meaning set forth in Section 1 hereof.
(u) "Person" shall have the meaning set forth in Section 4 hereof.
(v) "Plan" shall have the meaning set forth in Section 1 hereof.
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(w) "Related Entity or Entities" shall have the meaning set forth in
Section 1 hereof.
(x) "Reorganization" shall have the meaning set forth in Section 10
hereof.
(y) "Rule 16b-3" shall mean Rule 16b-3, as amended, or other applicable
rules under Section 16(b) of the Exchange Act.
(z) Reserved.
(aa) "Securities Act" shall mean the Securities Act of 1933.
(bb) "Subsidiary" shall mean, with respect to any Person, any other
Person of which such first Person owns or has the power to vote, directly or
indirectly, securities representing a majority of the votes ordinarily entitled
to be cast for the election of directors or other governing Persons.
19. Amendment of Plan.
The Board of Directors shall have the right to amend, modify, suspend
or terminate the Plan at any time; provided, that no amendment shall be made
which shall increase the total number of shares of the Common Stock which may be
issued and sold pursuant to Options or Awards granted under the Plan or to
change the class of individuals eligible to receive Options or Awards under the
Plan unless such amendment is made by or with the approval of the stockholders
of the Company. The Board of Directors shall have the right to amend the Plan,
the Options, and Awards outstanding thereunder, without the consent or joinder
of any optionee, any award-holder or other Person, in such manner as may be
determined necessary or appropriate by the Board of Directors in order to cause
the Plan and the Options and Awards outstanding thereunder (as applicable) to
comply with Rule 16b-3 (or any successor rule) under the Exchange Act (or any
successor law) and the regulations (including any temporary regulations)
promulgated thereunder. Except as provided above, no amendment, modification,
suspension or termination of the Plan shall alter or impair any Options
previously granted under the Plan without the consent of the holder thereof.
20. Effective Date.
The Plan shall become effective on the date on which it is approved by
the Board of Directors.
21. Reserved.
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