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EXHIBIT 4.1
On July 11, 2000, the Board of Directors of Aperian, Inc. (formerly MSI
Holdings, Inc.) adopted the following amended and restated Stock Option Plan.
APERIAN, INC.
2000 STOCK OPTION PLAN
(RESTATEMENT)
1. Purpose.
Aperian, Inc., a Delaware corporation (herein, together with its
successors, referred to as the "Company"), by means of this 2000 Stock Option
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. Unless a majority of the members of the Board of
Directors determines otherwise: (a) the Committee shall be constituted in a
manner that satisfies the requirements of Rule 16b-3, which Committee shall
administer the Plan with respect to all Employees or Eligible Non-Employees who
are subject to Section 16 of the Exchange Act in a manner that satisfies the
requirements of Rule 16b-3; and (b) the Committee shall be constituted in a
manner that satisfies the requirements of Section 162(m), which Committee shall
administer the Plan with respect to "performance-based compensation" for all
Employees or Eligible Non-Employees who are reasonably expected to be "covered
employees" as those terms are defined in Section 162(m). The number of persons
that shall constitute the Committee shall be determined from time to time by a
majority of all the members of the Board of Directors, but shall in no event be
fewer than required by Rule 16b-3 and Section 162(m) where applicable. 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
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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, the by-laws of the
Company, Rule 16b-3 so long as it is applicable, and Section 162(m) so long as
it is applicable.
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 12,000,000 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 Incentive Options (as hereinafter defined) and Non-Qualified
Options (as hereinafter defined) may be made under the Plan, subject to and in
accordance with Section 6, to Employees. As used herein, the term "Employee"
shall mean any employee of the Company or any Related Entity, including officers
and directors of the Company or any Related Entity who are also employees 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.
Grants of Non-Qualified Options may be made, subject to and in accordance
with Section 7, to any Eligible Non-Employee. As used herein, the term "Eligible
Non-Employee" shall mean any director of the Company who is not regularly
employed on a salaried basis with the Company and any other 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.
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 date of grant; provided, in
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the case of an Incentive Option (as hereinafter defined) the exercise price per
share shall not be less than 100% of the Fair Market Value of a Share of Common
Stock on the date of grant, except as provided in 6(a) hereof.
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 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 if the Committee permits, pursuant to Section
6(b) or 7(a)(ii), payment of the exercise price of an Option with previously
acquired shares of Common Stock (A) in the case of Incentive Options, no shares
shall be used to pay the exercise price under this paragraph unless (1) such
shares were not acquired through the exercise of Incentive Options or (2) if so
acquired, (x) such shares have been held for more than two years since the grant
of such Incentive Options and for more than one year since the exercise of such
Incentive Options (the "Holding Period"), or (y) if such shares have not been
held for the Holding Period, the optionee elects in writing to use such shares
to pay the exercise price under this paragraph, (B) 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 (C) 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.
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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 grant incentive stock options pursuant to Section 422 of the
Code ("Incentive Options"), to grant non-qualified stock options (options which
do not qualify under Section 422 of the Code) ("Non-Qualified Options"), and to
grant both types of Options to Employees. No Incentive Option shall be granted
pursuant to this Plan after the earlier of ten years from the date of adoption
of the Plan or ten years from the date of approval of the Plan by the
stockholders of the Company. Notwithstanding anything in this Plan to the
contrary, Incentive Options may be granted only 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; provided, that in the case of an
Incentive Option, such price shall not be less than the Fair Market Value per
share of Common Stock at the date the Option is granted; and provided, further,
that in the case of an Incentive Option granted to a person who, at the time
such Incentive Option is granted, owns shares of the Company or any Related
Entity which possess more than 10% of the total combined voting power of all
classes of shares of the Company or of any Related Entity, the option exercise
price shall not be less than 110% of the Fair Market Value per share of Common
Stock at the date the Option is granted. The Option exercise price shall be
subject to adjustment in accordance with the provisions of Section 10 of the
Plan.
(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) Continuation of Employment. Each Incentive Option shall be granted to
an Employee only when he is an employee of the Company or a Related Entity and
may only be exercised while such optionee is an employee of the Company or a
Related Entity or within three months after termination of employment with the
Company or related Entity.
(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. No Incentive Option by its terms shall be exercisable
after the expiration of ten years from the date of grant of such Option;
provided, however, that no Incentive Option granted to a person who, at the time
such Option is granted, owns stock of the Company, or any Related Entity,
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, or any Related Entity, shall be exercisable after the
expiration of five years from the date such Option is granted.
(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); provided, however, that in the case
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of an Incentive Option, the optionee or his legal representative shall in any
event be required to exercise the Incentive Option within one year after
termination of the optionee's employment due to his Disability.
(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); provided, that no Incentive
Option shall be exercisable more than three months after such termination.
(i) Maximum Exercise. The aggregate Fair Market Value of stock (determined
at the time of the grant of the Option) with respect to which Incentive Options
are exercisable for the first time by an optionee during any calendar year under
all plans of the Company and any Related Entity shall not exceed $100,000.
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. 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 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
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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
(i) for Good Cause or (ii) as a result of removal of the optionee from
office as a director of the Company or of any Related Entity for cause by
action of the stockholders of the Company or such Related Entity in
accordance with the by-laws of the Company or such Related Entity, as
applicable, and the corporate law of the jurisdiction of incorporation of
the Company or such Related Entity, 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) An Eligible Non-Employee that is a non-employee director of the Company
may elect to receive Options in lieu of all or a portion of such director's
annual cash retainer fee, if any, for services as a director of the Company.
Notwithstanding subsection 7(a)(ii), the following shall apply if a non-employee
director elects to receive all or a portion of his/her annual cash retainer in
Options:
(i) Method of Election. Except as otherwise specified by the Committee,
a non-employee director's election shall be made in accordance with the
following provisions. Unless the Committee provides otherwise, the election
may be made only by written notice delivered to the Committee prior to the
first day of the calendar year in which the cash payment would otherwise be
made. The election shall specify the amount of the annual cash retainer
that is to be paid in the form of Options and shall be irrevocable except
for payments otherwise payable in the next calendar year after the date of
a written notice of revocation.
(ii) Terms of Options. The date of grant of an Option granted pursuant
to this Section 7(b) shall be the later of (1) the date all corporate
action necessary to effect the grant has been completed or (2) the date on
which the portion of the annual cash retainer fee that the non-employee
director has elected not to receive would otherwise have been paid. The
number of shares subject to that Option shall be determined by dividing the
foregone amount of the annual cash retainer fee otherwise due and payable
on the date of grant by the value of an Option for one share of Common
Stock on the date of grant having the terms set forth herein, which value
shall be calculated pursuant to a Black-Scholes Model or similar valuation
method selected by the Committee. The exercise price with respect to a
share of Common Stock subject to that Option shall be the Fair Market Value
of a share of Common Stock on the Option's date of grant.
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, provided, however, that the price or value of shares
of Common Stock shall not be less than 85% of the Fair Market Value of a
share of Common Stock on the date of grant.
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(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.
(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. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code, and (ii) in no event shall any adjustment be made
that would render any Incentive Option granted hereunder other than an
"incentive stock option" for purposes of Section 422 of the Code. 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
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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.
11. Assignment or Transfer.
(a) Transfer of Incentive Options. Incentive Options are not transferable
by an optionee other than by will or the laws of descent and distribution.
(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
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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(a) or 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.
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.
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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.
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.
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<PAGE> 11
(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.
(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.
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(p) "Holding Period" shall have the meaning set forth in Section 5 hereof.
(q) "Incentive Options" shall have the meaning set forth in Section 6
hereof.
(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.
(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) "Section 162(m)" means Section 162(m) of the Code and the Treasury
regulations adopted from time to time thereunder, or any successor law
or rule as it may be amended from time to time.
(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) (i)
to qualify as "incentive stock options" within the meaning of Section 422 of the
Code, (ii) 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, or (iii) to comply with Section 162(m).
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, provided the Plan is approved by the stockholders of the
Company within twelve months thereafter. Notwithstanding any provision in the
Plan or in any agreement evidencing an Option or Award, no Option shall be
exercisable or vest and no Award shall be granted prior to such stockholder
approval.
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21. Individual Limitations on Options and Awards.
No person may be granted during any one year period, Options and Awards
with respect to more than 2,000,000 shares of Common Stock. If an Option or
Award is canceled or forfeited, the canceled Option or Award shall continue to
be counted against the maximum number of shares of Common Stock for which
Options or Awards may be granted to such Person under the Plan. If, after the
grant, the exercise price of an Option is reduced, the transaction shall be
treated as a cancellation of the Option and the grant of a new Option. In such
case, both the Option that is deemed to be canceled and the Option that is
deemed to be granted reduce the maximum number of shares for which Options may
be granted to such Person under the Plan pursuant to Section 21.
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