EXHIBIT 10.3
E-PAWN.COM, INC.
2000 NONSTATUTORY STOCK PLAN
1. PURPOSES OF THE PLAN. The purposes of this Plan are:
1. to attract and retain the best available personnel for positions
of substantial responsibility,
2. to provide additional incentive to Employees and Consultants, and
3. to promote the success of the Company's business.
Options granted under the Plan will be Nonstatutory Stock Options.
2. DEFINITIONS. As used herein, the following definitions shall apply:
1. "Administrator" means the Board or any of its Committees shall be
administering the Plan, in accordance with Section 4 of the Plan.
2. (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed
or quoted, and the applicable laws of any foreign jurisdiction
where Options are, or will be, granted under the Plan.
3. "Board" means the Board of Directors of the Company.
4. "Code" means the Internal Revenue Code of 1986, as amended.
5. "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
6. "Common Stock" means the Common Stock of the Company.
7. "Company" means E-Pawn.com Inc.
8. "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such
entity.
9. "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any
Parent, or Subsidiary, is not interrupted or terminated.
Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary,
or any successor. A leave of absence approved by the Company
shall include sick leave, military leave, or any other personal
leave approved by an authorized representative of the Company.
10. "Director" means a member of the Board.
11. "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
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12. "Employee" means any person who, on the date he or she is granted
an Option under this Plan is (i) employed by the Company or any
Parent or Subsidiary of the Company, and (ii) is not an Officer
or Director of the Company or any Parent or Subsidiary of the
Company. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute
"employment" by the Company. An Employee who is not an Officer or
Director on the date he or she is granted an Option under this
Plan, but who thereafter becomes an Officer or Director of the
Company or any Parent or Subsidiary of the Company, shall
continue to be an "Employee" under this Plan for purposes of such
Option.
13. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
14. "Fair Market Value" means, as of any date, the value of Common
Stock determined as the closing sales price for such Common Stock
(or the closing bid, if no sales were reported) as quoted on such
exchange or system for the date of determination, as reported in
The Wall Street Journal or such other source as the Administrator
deems reliable. In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good
faith by the Administrator.
15. "Misconduct" means the Optionee (i) is convicted of a felony
involving dishonesty or moral turpitude, (ii) committed an act of
dishonesty intended to result in substantial personal enrichment,
(iii) engaged in actions intended to cause significant injury to
the Company (including derogatory statements regarding the
Company, but excluding statements made in connection with any
legal action filed against the Company), or (iv) breached the
non-disclosure, non-compete or non-solicit provisions of any
agreement between the Optionee and the Company.
16. "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated
thereunder.
17. "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
18. "Officer" means a person who is an officer of the Company (i)
within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder, or (ii) by virtue
of having the title of vice president or above.
19. "Option" means a stock option granted pursuant to the Plan.
20. "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
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21. "Optioned Stock" means the Common Stock subject to an Option.
22. "Optionee" means an Employee or Consultant who holds an
outstanding Option.
23. "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
24. "Plan" means this 1999 Nonstatutory Stock Plan.
25. "Retirement" means the termination of employment pursuant to the
Company's retirement policies for an Employee who has attained
the age of fifty-five (55) and whose Continuous Status as an
Employee was not interrupted during the previous five (5) years.
26. "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
27. "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned
and sold under the Plan is10,000,000. The Shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares that were subject thereto
shall become available for future grant or sale under the Plan (unless
the Plan has terminated).
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4. ADMINISTRATION OF THE PLAN.
1. ADMINISTRATION. The Plan shall be administered by (A) the Board,
or (B) a Committee, which Committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Committee shall
serve in its designated capacity until otherwise directed by the
Board. The Board may increase the size of the Committee and
appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however
caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by
Applicable Laws.
2. POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:
1. to determine the Fair Market Value of the Common Stock;
2. to select the Consultants and Employees to whom Options may
be granted hereunder;
3. to determine whether and to what extent Options or any
combination thereof, are granted hereunder;
4. to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
5. to approve forms of agreement for use under the Plan;
6. to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the
exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or
the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole
discretion, shall determine;
7. to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
8. to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of
qualifying for preferred tax treatment under foreign tax
laws;
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9. to modify or amend each Option (subject to Section 15(b) of
the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options;
10. to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option
previously granted by the Administrator;
11. to determine the terms and restrictions applicable to
Options;
12. to determine whether and under what circumstances an Option
may be settled in cash under Section 10(f) instead of Common
Stock;
13. to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant
(including providing for and determining the amount (if any)
of any deemed earnings on any deferred amount during any
deferral period); and
14. to make all other determinations deemed necessary or
advisable for administering the Plan.
3. EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options.
5. ELIGIBILITY. Options may be granted to Employees and Consultants;
provided, however, that notwithstanding anything to the contrary
contained in the Plan, Options may not be granted to Officers and
Directors.
6. LIMITATION. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's
employment or consulting relationship with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right
to terminate such employment or consulting relationship at any time,
with or without cause.
7. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan.
8. TERM OF OPTION. The term of each Option shall be stated in the Notice
of Grant.
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9. OPTION EXERCISE PRICE AND CONSIDERATION.
a. Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator but in no case shall the per Share exercise price be
less than 85% of the Fair Market Value per Share on the date of grant;
provided, however, that for any calendar year, the aggregate number of
Shares subject to Nonstatutory Stock Options granted during such
calendar year with a per Share exercise price less than the Fair
Market Value per Share on the date of grant shall not exceed five
percent (5%) of the number of Shares subject to Options granted in the
preceding calendar year.
B. WAITING PERIOD AND EXERCISE DATES. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied
before the Option may be exercised. In so doing, the Administrator may
specify that an Option may not be exercised until the completion of a
service period or the attainment of certain performance goals
determined by the Administrator.
C. FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including
the method of payment. Such consideration may consist entirely of:
1. cash;
2. check;
3. other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (B)
have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said
Option shall be exercised;
4. delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the
broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or
loan proceeds required to pay the exercise price;
5. a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred
compensation program or arrangement;
6. any combination of the foregoing methods of payment; or
7. such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable
Laws.
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10. EXERCISE OF OPTION.
1. PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall
be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the
stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock
certificate promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is
prior to the date the stock certificate is issued, except as provided
in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is
exercised.
2. TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Upon termination
of an Optionee's Continuous Status as an Employee or Consultant, other
than as provided for in Sections 10(c), 10(d) and 10(e), the Optionee
may exercise his or her Option, but only within such period of time as
is specified in the Notice of Grant, and only to the extent that the
Optionee was entitled to exercise it at the date of termination (but
in no event later than the expiration of the term of such Option as
set forth in the Notice of Grant). In the absence of a specified time
in the Notice of Grant, the Option shall remain exercisable for three
(3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's
entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
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1. Notwithstanding the above, in the event an Optionee's
Continuous Status as an Employee or Consultant
terminates and the Optionee performs an act of
Misconduct, all unexercised Options held by such
Optionee shall expire five (5) business days
following written notice from the Company to the
Optionee.
2. Notwithstanding the above, in the event of an
Optionee's change in status from Consultant to
Employee or Employee to Consultant, an Optionee's
Continuous Status as an Employee or Consultant shall
not automatically terminate solely as a result of
such change in status.
3. DISABILITY OF OPTIONEE. In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at
any time within twelve (12) months from the date of such termination,
but only to the extent that the Optionee was entitled to exercise it
at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of
Grant). If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
4. DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised at any time within twenty-four (24) months
following the date of death (but in no event later than the expiration
of the term of such Option as set forth in the Notice of Grant), by
the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent
that the Optionee was entitled to exercise the Option at the date of
death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the
Plan. If, after death, the Optionee's estate or a person who acquired
the right to exercise the Option by bequest or inheritance does not
exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.
5. RETIREMENT. In the event that an Optionee's Continuous Status as an
Employee terminates as a result of the Optionee's Retirement, the
Optionee may exercise his or her Option at any time subject to the
limitations in the Plan and the Notice of Grant, but only to the
extent that the Optionee was entitled to exercise the Option at the
time of such termination, unless otherwise expressly provided in a
written agreement between the Optionee and the Company.
6. BUYOUT PROVISIONS. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish
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and communicate to the Optionee at the time that such offer is made.
11. WITHHOLDING TAXES. In accordance with any applicable administrative
guidelines it establishes, the Administrator may allow a purchaser to
pay the amount of taxes required by law to be withheld as a result of a
purchase of Shares or a lapse of restrictions in connection with Shares
purchased pursuant to an Option, by withholding from any payment of
Common Stock due as a result of such purchase or lapse of restrictions,
or by permitting the purchaser to deliver to the Company, Shares having
a Fair Market Value, as determined by the Administrator, equal to the
amount of such required withholding taxes.
12. NON-TRANSFERABILITY OF OPTIONS. Unless otherwise specified by the
Administrator in the Notice of Grant, an Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the
Optionee. If the Administrator makes an Option transferable, such
Option shall contain such additional terms and conditions as the
Administrator deems appropriate.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, Dissolution, Merger or
Asset Sale.
1. CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which
have been returned to the Plan upon cancellation or expiration of
an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number
of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares of Common Stock subject to an Option.
2. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator
shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in
its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any
Company repurchase rights
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applicable to any Shares purchased upon exercise of an Option
shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the
consummation of such proposed action.
3.
MERGER OR ASSET SALE. In the event of a merger of the Company
with or into another corporation, or the sale of substantially
all of the assets of the Company, each outstanding Option shall
be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor
corporation (the "Successor Corporation"), unless the Successor
Corporation refuses to assume or substitute for the Option, in
which case the Optionee shall have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option is
exercisable in lieu of assumption or substitution in the event of
a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be
fully exercisable for a period of not less than forty-five (45)
days from the date of such notice, and the Option shall terminate
upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the Option confers the right to
purchase or receive, for each Share of Optioned Stock subject to
the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets was
not solely common stock of the Successor Corporation, the
Administrator may, with the consent of the Successor Corporation,
provide for the consideration tobe received upon the exercise of
the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the Successor Corporation
equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of
assets.
14. DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination
granting such Option, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each
Optionee within a reasonable time after the date of such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN.
1. Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
2. Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights
of any Optionee, unless mutually agreed
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otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it
hereunder with respect to options granted under the Plan prior
to the date of such termination.
16. CONDITIONS UPON ISSUANCE OF SHARES.
1. LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and
the issuance and delivery of such Shares shall comply with
Applicable Laws, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
2. INVESTMENT REPRESENTATIONS. As a condition to the exercise of
an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for
investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required.
17. LIABILITY OF COMPANY. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed
by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.
18. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall
be sufficient to satisfy the requirements of the Plan.
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