<PAGE> 1
EXHIBIT 4.8
HQ GLOBAL HOLDINGS, INC.
2000 STOCK OPTION AND RESTRICTED STOCK PLAN
Section 1. Purpose. The purpose of the HQ Holdings, Inc. 2000 Stock Option
and Restricted Stock Plan (the "Plan") is to promote the interests of HQ
Holdings, Inc., a Delaware corporation (the "Company"), and any Subsidiary
thereof and the interests of the Company's stockholders by providing an
opportunity to selected employees, officers and directors of the Company or any
Subsidiary thereof as of the date of the adoption of the Plan or at any time
thereafter to purchase Common Stock of the Company. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate such employees and
persons and to encourage such employees and persons to devote their best efforts
to the business and financial success of the Company. It is intended that this
purpose will be effected by the granting of "non-qualified stock options" and/or
"incentive stock options" to acquire the Common Stock of the Company and/or by
the granting of Common Stock or rights to purchase the Common Stock of the
Company on a "restricted stock" basis. Under the Plan, the Committee (defined
below) shall have the authority (in its sole discretion) to grant "incentive
stock options" within the meaning of Section 422(b) of the Code, "non-qualified
stock options" as described in Treasury Regulation Section 1.83-7 or any
successor regulation thereto, or "restricted stock" awards.
Section 2. Definitions. For purposes of the Plan, the following terms used
herein shall have the following meanings, unless a different meaning is clearly
required by the context.
2.1. "Award" shall mean an award of Common Stock or the right to purchase
Common Stock granted under the provisions of Section 7 of the Plan.
2.2. "Board of Directors" shall mean the Board of Directors of the Company.
2.3 "Change in Control" (a) Except as provided in (b) below, the term
"Change in Control" shall mean: (i) any merger, consolidation, reorganization,
or recapitalization of the Company, or any similar transaction involving the
Company, in which the stockholders of the Company immediately before the merger,
consolidation, reorganization, recapitalization, or similar transaction fail to
own securities in the surviving or new entity that represent more than 50% of
the voting power of the equity holders of such entity immediately after the
merger, consolidation, reorganization, recapitalization, or similar transaction,
(ii) any person or group, as determined in accordance with Rule 13d-3 under the
Securities and Exchange Act of 1934, beneficially owning securities of the
Company that represent more than 50% of the voting power of the security holders
of the Company as determined under Rule 13d-3, other than any such ownership by
any employee benefit plan sponsored or maintained by the Company or one of its
Subsidiaries or affiliates, or any trust related to any such employee benefit
plan, (iii) any sale of all or substantially all of the aggregate assets of the
Company and its Subsidiaries, (iv) any filing of a voluntary petition by the
Company under the federal bankruptcy laws or any filing of an involuntary
petition against the Company under such laws, which involuntary petition is not
dismissed within 30 days after it was filed, or (v) any adoption of a plan of
dissolution or liquidation of the Company. For purposes of a Change in Control,
voting power shall mean the power to vote in the election of an entity's
directors or similar functionaries. If an entity's equity holders vote in
classes in such elections, however, voting power shall be determined based upon
<PAGE> 2
the voting power within any class of equity securities entitled to elect
one-half or more of such entity's directors or similar functionaries.
(b) Notwithstanding the above, a change in Control shall not include a
firm commitment underwritten public offering pursuant to a registration
statement on Form S-1 or Form S-2 under the Securities Act of 1933, as amended.
(c) If a Change in Control occurs and the Company fails to remain in
existence, the Option shall become an obligation of the person succeeding to the
business of the Company or otherwise responsible for the Company's obligations.
2.4. "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.5. "Committee" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.6. "Common Stock" shall mean the Common Stock $0.01 par value, of the
Company, or such other security or right or instrument into which such Common
Stock may be changed or converted in the future.
2.7. "Employee" shall mean (i) with respect to an ISO, any person,
including an officer or director of the Company, who, at the time an ISO is
granted to such person hereunder, is employed on a full-time basis by the
Company or any Subsidiary of the Company, and (ii) with respect to a
Non-Qualified Option and/or an Award, any person employed by, or performing
services for, the Company or any Subsidiary of the Company, including, without
limitation, directors and officers.
2.8. "Fair Market Value" of a share of Common Stock means:
(1) If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are regularly
reported for the Common Stock, either (a) the closing price of the
Common Stock on the Composite Tape or other comparable reporting
system for the applicable date or (b) if the Common Stock is not
traded on the relevant date, the closing price of the Common Stock on
the Composite Tape or other comparable reporting system for the most
recent day on which the Common Stock was traded immediately preceding
the applicable date.
(2) If the Common Stock is not traded on a national securities exchange
but is traded on the over-the-counter market, if sales prices are not
regularly reported for the Common Stock for the trading days or day
referred to in clause (1), and if bid and asked prices for the Common
Stock are regularly reported, either (a) the average of the bid and
the asked price for the Common Stock at the close of trading in the
over-the-counter market for the applicable date or (b) the average of
the bid and the asked price for the Common Stock at the close of
trading in the over-the-counter market of the trading day on which
Common Stock was traded immediately preceding the applicable date, as
the Committee shall determine in its sole discretion; and
2
<PAGE> 3
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as the
Board of Directors in good faith, shall determine.
2.9 "ISO" shall mean an Option granted to a Participant pursuant to the
Plan that constitutes and shall be treated as an "incentive stock option" as
defined in Section 422(b) of the Code.
2.10. "Non-Qualified Option" shall mean an Option granted to a Participant
pursuant to the Plan that is intended to be, and qualifies as, a "non-qualified
stock option" as described in Treasury Regulation Section 1.83-7 or any
successor regulation thereto and that shall not constitute nor be treated as an
ISO.
2.11. "Option" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to the Plan.
2.12. "Participant" shall mean any Employee to whom an Award and/or an
Option is granted under the Plan (and, where applicable, also includes a
Permitted Transferee of a Non-Qualified Option).
2.13. "Parent of the Company" shall have the meaning set forth in Section
424(e) of the Code.
2.14 "Permitted Transferee" means any transferee of a Non-Qualified Option
pursuant to a transfer that is approved by the Committee in accordance with the
provisions of Section 6.3 of the Plan.
2.15. "Subsidiary of the Company" shall have the meaning set forth in
Section 424(f) of the Code.
Section 3. Eligibility. Awards and/or Options may be granted to any
Employee. The Committee shall have the sole authority to select the persons to
whom Awards and/or Options are to be granted hereunder, and to determine whether
a person is to be granted a Non-Qualified Option, an ISO or an Award or any
combination thereof. No person shall have any right to participate in the Plan.
Any person selected by the Committee for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period. On and after the time that the Company becomes
subject to Code Section 162(m), no Participant shall be granted Options and/or
Awards under the Plan with respect to more than 500,000 shares of Common Stock
in any calendar year (subject to adjustment as provided in Section 8 hereof).
Section 4. Common Stock Subject to the Plan.
4.1. Number of Shares. (a) Except as provided below, the total number of
shares of Common Stock for which Options and/or Awards may be granted under the
Plan (as well as the total number of ISOs that may be granted hereunder) shall
not exceed in the aggregate 800,000 shares of Common Stock (subject to
adjustment as provided in Section 8 hereof).
3
<PAGE> 4
(b) The number of authorized shares of Common Stock hereunder shall be
increased on January 1, 2001, and on each of the four (4) succeeding January 1,
ending on January 1, 2005, by a number of shares equal to 3% of the total number
of shares of Common Stock outstanding as of such date. However, no ISO's shall
be issuable under this paragraph and the maximum number of ISO's shall be
determined without regard to this "evergreen" provision.
4.2. Reissuance. The shares of Common Stock that may be subject to Options
and/or Awards granted under the Plan may be either authorized and unissued
shares or shares reacquired at any time and now or hereafter held as treasury
stock as the Board of Directors may determine. In the event that any outstanding
Option expires or is terminated for any reason, the shares allocable to the
unexercised portion of such Option may again be subject to an Option and/or
Award granted under the Plan. If any shares of Common Stock acquired pursuant to
an Award or the exercise of an Option shall be forfeited or repurchased by the
Company, or is settled in cash in lieu of Common Stock, or is deemed to have
been used to pay the exercise price or tax withholding due with respect to an
Option, through share withholding or other cashless exercise method, then such
shares shall again become available for issuance pursuant to the Plan. In
addition, in the event a Participant pays for any Option through the delivery of
previously owned shares of Common Stock, the number of shares available for
issuance under the Plan shall be increased by the number of shares surrendered
by the Participant.
4.3. Special ISO Limitations.
(a) To the extent that the aggregate fair market value (determined as of
the date an ISO is granted) of the shares of Common Stock with respect to which
ISOs are exercisable for the first time by an Employee during any calendar year
(under all Incentive Stock Option Plans of the Company or any Parent or
Subsidiary of the Company) exceeds $100,000, then the excess thereof shall be
treated as a Non-Qualified Option and not as an ISO. This rule shall be applied
by taking Options into account in the order in which they are granted.
(b) No ISO shall be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of Section 424(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and the ISO by its terms is not exercisable more than five
years from the date it is granted.
Section 5. Administration of the Plan.
5.1. Administration. The Plan shall be administered by a committee of the
Board of Directors (the "Committee") established by the Board of Directors and
consisting of no less than two persons. From and after the time that any equity
securities of the Company become registered or required to be registered under
Section 12 of the Securities Exchange Act of 1934 ("Exchange Act"), all members
of the Committee shall be both "non-employee directors" within the meaning of
Rule 16b-3 promulgated under the Exchange Act and "outside directors" within the
meaning of Code Section 162(m). The Committee shall be appointed from time to
time by, and shall serve at the pleasure of, the Board of Directors.
4
<PAGE> 5
5.2. Grant of Options/Awards.
(a) Options. The Committee shall have the sole authority and discretion
under the Plan (i) to select the Employees who are to be granted Options
hereunder; (ii) to designate whether any Option to be granted hereunder is to be
an ISO or a Non-Qualified Option; (iii) to establish the number of shares of
Common Stock that may be issued under each Option; (iv) to determine the time
and the conditions subject to which Options may be exercised in whole or in
part; (v) to determine the form of the consideration that may be used to
purchase shares of Common Stock upon exercise of any Option (including the
circumstances under which the Employee may pay all or part of the exercise price
by entering into a promissory note with the Company, circumstances under which
the Company's issued and outstanding shares of Common Stock may be used by a
Participant to exercise an Option, or various "cashless exercise" methods); (vi)
to impose restrictions and/or conditions with respect to shares of Common Stock
acquired upon exercise of an Option; (vii) to determine the circumstances under
which shares of Common Stock acquired upon exercise of any Option may be subject
to repurchase by the Company; (viii) to determine the circumstances and
conditions subject to which shares acquired upon exercise of an Option may be
sold or otherwise transferred, including, without limitation, the circumstances
and conditions subject to which a proposed sale of shares of Common Stock
acquired upon exercise of an Option may be subject to the Company's right of
first refusal (as well as the terms and conditions of any such right of first
refusal); (ix) to establish a vesting provision for any Option relating to the
time when (or the circumstances under which) the Option may be exercised by a
Participant, including, without limitation, vesting provisions that may be
contingent upon (A) the Company meeting specified financial goals, (B) a change
of control of the Company or (C) the occurrence of other specified events; (x)
to accelerate the time when outstanding Options may be exercised; and (xi) to
establish any other terms, restrictions and/or conditions applicable to any
Option not inconsistent with the provisions of the Plan.
(b) Awards. The Committee shall have the sole authority and discretion
under the Plan (i) to select the Employees who are to be granted Awards
hereunder; (ii) to determine the amount, if any, to be paid by a Participant to
acquire shares of Common Stock pursuant to an Award; (iii) to determine the time
or times and the conditions subject to which Awards may be made; (iv) to
determine the time or times and the conditions subject to which the shares of
Common Stock subject to an Award are to become vested and no longer subject to
forfeiture to and/or repurchase by the Company; (v) to establish transfer
restrictions and the terms and conditions on which any such transfer
restrictions with respect to shares of Common Stock acquired pursuant to an
Award shall lapse; (vi) to establish vesting provisions with respect to any
shares of Common Stock subject to an Award, including, without limitation,
vesting provisions which may be contingent upon (A) the Company meeting
specified financial goals, (B) a change of control of the Company or (C) the
occurrence of other specified events; (vii) to determine the circumstances under
which shares of Common Stock acquired pursuant to an Award may be subject to
repurchase by the Company; (viii) to determine the circumstances and conditions
subject to which any shares of Common Stock acquired pursuant to an Award may be
sold or otherwise transferred, including, without limitation, the circumstances
and conditions subject to which a proposed sale of shares of Common Stock
acquired pursuant to an Award may be subject to the Company's right of first
refusal (as well as the terms and conditions of any such right of first
refusal); (ix) to determine the form of consideration that may be used to
purchase shares of Common Stock pursuant to an Award (including the
circumstances under which the
5
<PAGE> 6
Company's issued and outstanding shares of Common Stock may be used by a
Participant to purchase the Common Stock subject to an Award); (x) to accelerate
time at which any or all restrictions imposed with respect to any shares of
Common Stock subject to an Award will lapse; and (xi) to establish any other
terms, restrictions and/or conditions applicable to any Award not inconsistent
with the provisions of the Plan.
5.3. Interpretation. The Committee shall be authorized to interpret the
Plan and may, from time to time, adopt such rules and regulations, not
inconsistent with the provisions of the Plan, as it may deem advisable to carry
out the purposes of the Plan.
5.4. Finality. The interpretation and construction by the Committee of any
provision of the Plan, any Option and/or Award granted hereunder or any
agreement evidencing any such Option and/or Award shall be final and conclusive
upon all parties.
5.5. Voting. Members of the Committee may vote on any matter affecting the
administration of the Plan or the granting of Options and/or Awards under the
Plan.
5.6. Expenses, Etc. All expenses and liabilities incurred by the Committee
in the administration of the Plan shall be borne by the Company. The Committee
may employ attorneys, consultants, accountants or other persons in connection
with the administration of the Plan. The Company, and its officers and
directors, shall be entitled to rely upon the advice, opinions or valuations of
any such persons.
5.7. Indemnification. Neither the members of the Board of Directors nor any
member of the Committee shall be liable for any act, omission, or determination
taken or made in good faith with respect to the Plan or any Options or Awards
granted under it, and members of the Board of Directors and the Committee shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage, or expense (including attorneys' fees, the costs of
settling any suit, provided such settlement is approved by independent legal
counsel selected by the Company, and amounts paid in satisfaction of a judgment,
except a judgment based on a finding of bad faith) arising therefrom to the full
extent permitted by law.
Section 6. Terms and Conditions of Options.
6.1. ISOs. The terms and conditions of each ISO granted under the Plan
shall be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO issued
hereunder shall constitute and shall be treated as an "incentive stock option"
as defined in Section 422(b) of the Code. The terms and conditions of any ISO
granted hereunder need not be identical to those of any other ISO granted
hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no event
be less than 100% (or 110% in the case of an Employee referred to in Section
4.3(b) hereof) of the Fair Market Value of the shares of Common Stock subject to
the ISO on the date the ISO is granted. The Fair Market Value of Common Stock
subject to an ISO shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse.
6
<PAGE> 7
(b) ISOs, by their terms, shall not be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
ISO shall be exercisable only by the Optionee.
(c) All ISOs must be granted within 10 years of the earlier of the date the
Plan is adopted or the date the Plan is approved by the shareholders of the
Company. The Committee shall fix the term of all ISOs granted pursuant to the
Plan (including the date on which such ISO shall expire and terminate),
provided, however, that such term shall in no event exceed ten years from the
date on which such ISO is granted (or, in the case of an ISO granted to an
Employee referred to in Section 4.3(b) hereof, such term shall in no event
exceed five years from the date on which such ISO is granted). Each ISO shall be
exercisable in such amount or amounts, under such conditions and at such times
or intervals or in such installments as shall be determined by the Committee in
its sole discretion.
(d) To the extent that the Company or any Parent or Subsidiary of the
Company is required to withhold any Federal, state or local taxes in respect of
any compensation income realized by any Participant as a result of any
"disqualifying disposition" of any shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Board of
Directors in its sole discretion.
(e) In the sole discretion of the Committee the terms and conditions of any
ISO may (but need not) include any of the following provisions:
(i) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis for
any reason other than as a result of his death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
ISO held by such Participant at that time may only be exercised within
three (3) months after the date on which the Participant ceased to be so
employed, and only to the extent that the Participant could have otherwise
exercised such ISO as of the date on which he ceased to be so employed.
(ii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full--time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within one year after the date on which the
Participant ceased to be so employed, and only to the extent that the
Participant could have otherwise exercised such ISO as of the date on which
he ceased to be so employed.
(iii) In the event a Participant shall die while in the full-time
employ of the Company or a Parent or Subsidiary of the Company (or within a
period of three (3)
7
<PAGE> 8
months after ceasing to be an Employee for any reason other than his
"disability" or within a period of one year after ceasing to be an Employee
by reason of such "disability"), the unexercised portion of any ISO held by
such Participant at the time of his death may only be exercised within one
year after the date of such Participant's death, and only to the extent
that the Participant could have otherwise exercised such ISO at the time of
his death. In such event, such ISO may be exercised by the executor or
administrator of the Participant's estate or by any person or persons who
shall have acquired the ISO directly from the Participant by bequest or
inheritance.
(f) No Option granted hereunder shall qualify as an ISO unless the Plan is
approved by the shareholders of the Company within 12 months before or after the
date the Plan is adopted by the Board of Directors.
6.2. Non-Qualified Options. The terms and conditions of each Non-Qualified
Option granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written option agreement between the
Company and the Participant in such form as the Committee shall approve. The
terms and conditions of each Non-Qualified Option will be such (and each
Non-Qualified Option Agreement shall expressly so state) that each Non-Qualified
Option issued hereunder shall not constitute nor be treated as an "incentive
stock option" as defined in Section 422(b) of the Code but will be a
"non-qualified stock option" for Federal, state and local income tax purposes.
The terms and conditions of any Non-Qualified Option granted hereunder need not
be identical to those of any other Non-Qualified Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
(a) The option (exercise) price shall be fixed by the Committee and may be
equal to, more than or less than 100% of the Fair Market Value of the shares of
Common Stock subject to the Non-Qualified Option on the date such Non-Qualified
Option is granted, provided, however, that the option (exercise) price shall not
be less than the par value of such shares of Common Stock.
(b) The Committee shall fix the term of all Non-Qualified Options granted
pursuant to the Plan (including the date on which such Non-Qualified Option
shall expire and terminate). Each Non-Qualified Option shall be exercisable in
such amount or amounts, under such conditions (including provisions governing
the rights to exercise such Non-Qualified Option), and at such times or
intervals or in such installments as shall be determined by the Committee in its
sole discretion. To the extent approved by the Committee, Options may
distinguish between exercisability and vesting, such that Options may be
exercisable immediately, but the underlying Common Stock issuable thereunder may
be subject to a vesting schedule. In such case, the Option, upon exercise, shall
become an Award of restricted stock governed by the terms of Section 7 hereof.
(c) Except as otherwise provided in Section 6.3 hereof or in an individual
Option Agreement, Non-Qualified Options shall not be transferable otherwise than
by will or the laws of descent and distribution, or a domestic relations order,
and during a Participant's lifetime a
8
<PAGE> 9
Non-Qualified Option shall be exercisable only by the Participant or an
alternate payee under a domestic relations order.
(d) To the extent that the Company is required to withhold any Federal,
state or local taxes in respect of any compensation income realized by any
Participant in respect of a Non-Qualified Option granted hereunder or in respect
of any shares of Common Stock acquired upon exercise of a Non-Qualified Option,
the Company shall deduct from any payments of any kind otherwise due to such
Participant the aggregate amount of such Federal, state or local taxes required
to be so withheld or, if such payments are insufficient to satisfy such Federal,
state or local taxes, or if no such payments are due or to become due to such
Participant, then, such Participant will be required to pay to the Company, or
make other arrangements satisfactory to the Company (including, with prior
Committee approval, use of a promissory note in favor of the Company, delivery
of previously owned shares of Common Stock, or share withholding from shares
otherwise to be issued upon exercise of the Option or other cashless exercise
method) regarding payment to the Company of, the aggregate amount of any such
taxes. All matters with respect to the total amount of taxes to be withheld in
respect of any such compensation income shall be determined by the Board of
Directors in its sole discretion.
(e) To exercise an Option, a Participant (or Permitted Transferee) must
deliver a completed copy of the Option Exercise Form to the address indicated on
the Form, specifying the number of Option Shares being purchased as a result of
such exercise, together with payment of the full option price for the Option
Shares being purchased and the applicable income tax withholding obligations.
Unless otherwise agreed to by the Committee, payment of the option price and tax
withholding obligation must be made in cash or by cashier's check; provided,
however, that with prior approval of the Committee, and subject to applicable
laws and regulations, and any provisions in the Option Agreement, payment of
such option price and/or tax withholding may instead be made, in whole or in
part, by (A) the delivery to the Company of a promissory note in a form and
amount satisfactory to the Committee, provided that the principal amount of such
note shall not exceed the excess of such aggregate option price and minimum tax
withholding obligation over the aggregate par value of the purchased Option
Shares; (B) to the extent not in violation of any instrument or agreement to
which the Company is a party, by delivery of shares of Common Stock (not subject
to any security interest or pledge) valued at Fair Market Value at time of
exercise, not to exceed the aggregate option exercise price and minimum tax
withholding obligation; (C) by one or more forms of "cashless exercise" of the
Option, including, without limitation, withholding Option Shares from the Option
Shares to be otherwise issued that number of Option Shares needed to pay the
exercise price and/or tax withholding, not be exceed the aggregate option
exercise price and minimum tax withholding obligation; or (D) a combination of
one or more of the foregoing, or in any other form of payment acceptable to the
Committee. The Committee reserves the right to require that any shares of Common
Stock delivered by the Optionee in full or partial payment of the exercise price
and/or tax withholding to be limited to those shares already owned by the
Optionee for at least six (6) months.
(f) Notwithstanding anything to the contrary herein or in any Option
Agreement, no shares of stock purchased upon exercise of an Option, and no
certificate representing such shares, shall be issued or delivered if (1) such
shares have not been admitted to listing upon official notice of issuance on
each stock exchange upon which shares of the class are
9
<PAGE> 10
then listed, or (2) in the opinion of counsel to the Company, such issuance or
delivery would (i) cause the Company to be in violation of or to incur liability
under any federal, state or other securities law, or any requirement of any
stock exchange listing agreement to which the Company is a party, or any other
requirement of law or of any administrative or regulatory body having
jurisdiction over the Company, or (ii) require registration (apart from such
registrations as have been theretofore completed by the Company covering such
shares) under any federal, state or other securities or similar law.
(g) Except as otherwise provided in an Option Agreement, the following
provisions will apply upon termination of employment or other relationship with
the Company:
(i) In the event that the Company or any subsidiary, affiliate, or
parent thereof terminates a Participant's employment or other relationship
with the Company (or any subsidiary, affiliate or parent thereof) "for
cause" (as determined in the sole discretion of the Company or its
designated representative), then both the vested and the unvested portion
of the Option shall immediately terminate.
(ii) In the event that a Participant terminates his employment or
other relationship with the Company (or any subsidiary, affiliate, or
parent thereof) for any reason whatsoever (other than as a result of
retirement (as determined by the Company), death or total and permanent
disability (as determined by the Company or its designated
representative)), then the Option may only be exercised within 365 days
after the date the Participant ceases to be so employed or provide such
services, and only to the same extent he was entitled to exercise the
Option on the date he ceased to be so employed or provide such services by
reason of such termination and had not previously done so, and the unvested
portion shall immediately terminate.
(iii) In the event that a Participant ceases to be employed by or
provide services to the Company or any subsidiary, affiliate, or parent
thereof on a full-time basis (A) by reason of total and permanent
disability (as determined by the Company or its designated representative),
(B) by reason of retirement (as defined by the Company), or (C) as a result
of the termination of his employment or other relationship by the Company
or any subsidiary, affiliate, or parent thereof at any time other than "for
cause," then the Option may only be exercised within one year after the
date such Participant ceases to be so employed or provide such services,
and only to the same extent that such Participant was entitled to exercise
the Option on the date he ceased to be so employed or provide such services
by reason of such disability, retirement, or such termination and had not
previously done so. The unvested portion of the Option shall immediately
terminate.
(iv) In the event that a Participant dies while employed or providing
services to the Company or any subsidiary, affiliate, or parent thereof (or
within a period of one year after ceasing to be employed by or to provide
services to the Company or any subsidiary, affiliate, or parent thereof for
any reason described in Section 6.2(g)(iii) hereof), the Option may only be
exercised within one year after
10
<PAGE> 11
such Participant's death. In such event, the Option may be exercised during
such one-year period by the executor or administrator of such Participant's
estate or by any person who shall have acquired the Option through bequest
or inheritance, but only to the same extent that such Participant was
entitled to exercise the Option immediately prior to the time of his death
and had not previously done so. The unvested portion shall immediately
terminate.
(v) Except as otherwise provided in an Option Agreement,
notwithstanding anything to the contrary above, if a Participant is
employed by or providing services to the Company or any affiliate or
subsidiary thereof immediately before a Change in Control, such
Participant's Option shall vest immediately and in full, and such
Participant may exercise his Option with respect to any Option Shares not
previously purchased until the later of (a) the date specified in Section
6.2(g)(ii)-(iv) above, or (b) the first anniversary of such Change in
Control, but in no event longer than ten (10) years from the original date
of grant.
(vi) Notwithstanding any provision contained in this Section 6.2(g) to
the contrary, except as otherwise provided in an Option Agreement, in no
event may an Option be exercised to any extent by anyone after the tenth
(10th) anniversary of the date of grant of the Option.
6.3 RESTRICTIONS ON TRANSFERABILITY OF AWARDS. (a) No Option or Award under
the Plan or any Award Agreement, and no rights or interests herein or therein,
shall or may be assigned, transferred, sold, exchanged, encumbered, pledged, or
otherwise hypothecated or disposed of by a Participant or any beneficiary(ies)
of any Participant, except (i) in the case of any Option or Award, transfers by
testamentary disposition by the Participant or the laws of descent and
distribution and (ii) in the case of Non-Qualified Options, transfers made with
the prior approval of the Committee and on such terms and conditions as the
Committee, in its sole discretion, shall approve to: (A) in the case of a
transfer without the payment of any consideration, any "family member" as such
term is defined in Section 1(a)(5) of the General Instructions to Form S-8 under
the Securities Act of 1933, as in effect at the time of such transfer, (B) to
any person or entity described in clause (ii) of Section 1 (a)(5) of the General
Instructions to Form S-8 under the Securities Act of 1933, as in effect at the
time of such transfer, or (C) any other transferee that is approved by the
Committee in its sole discretion; provided, however, that, without the prior
approval of the Committee, no Permitted Transferee shall further transfer a
Non-Qualified Option, other than by testamentary disposition or the laws of
descent and distribution, either directly or indirectly, including, without
limitation, by reason of the dissolution of, or a change in the beneficiaries
of, a Permitted Transferee that is a trust, the sale, merger, consolidation,
dissolution, or liquidation of a Permitted Transferee that is a partnership (or
the sale of all or any portion of the partnership interests therein), or the
sale, merger, consolidation, dissolution, or liquidation of a Permitted
Transferee that is a corporation (or the sale of all or any portion of the stock
thereof).
(b) Except as may be provided in a domestic relations order related to a
Non-Qualified Option or an Award, no Option or Award under the Plan or any
Option or Award Agreement, and no rights herein or therein, shall be subject to
execution, attachment, or similar
11
<PAGE> 12
legal process, including, without limitation, seizure for the payment of the
Participant's or a Permitted Transferee's debts, judgments, alimony, or separate
maintenance.
(c) During the lifetime of a Participant, Stock Options are exercisable
only by the Participant or a Permitted Transferee.
(d) Each Permitted Transferee, along with the transferor, of a
Non-Qualified Option transferred in accordance with the provisions of this
Section 6.3 shall enter into a Stock Option Transfer Agreement with the Company
in a form specified by the Committee. Each such Participant and Permitted
Transferee shall agree to the restrictions, terms and conditions of the Option
set forth in the Option Agreement or the Stock Option Transfer Agreement, as
applicable, and in the Plan.
Section 7. Terms and Conditions of Awards. The terms and conditions of each
Award granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written agreement between the
Participant and the Company, in such form as the Committee shall approve. The
terms and provisions of any Award granted hereunder need not be identical to
those of any other Award granted hereunder.
The terms and conditions of each Award shall include the following:
(a) The amount, if any, to be paid by a Participant to acquire the shares
of Common Stock pursuant to an Award shall be fixed by the Board of Directors
(or the Committee).
(b) Each Award shall contain such vesting provisions, such transfer
restrictions and such other restrictions and conditions as the Committee, in its
sole discretion, may determine, including, without limitation, the circumstances
under which the Company shall have the right and option to repurchase shares of
Common Stock acquired pursuant to an Award.
(c) Stock certificates representing Common Stock acquired pursuant to an
Award shall bear a legend referring to the restrictions imposed on such Stock
and such other matters as the Committee may determine.
(d) To the extent that the Company is required to withhold any Federal,
state or local taxes in respect of any compensation income realized by the
Participant in respect of an Award granted hereunder, or in respect of any
shares acquired pursuant to an Award, or in respect of the vesting of any such
shares of Common Stock, then the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, or if no such
payments are due or to become due to such Participant, then, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Committee
in its sole discretion.
Section 8. Adjustments. In the event that, after the adoption of the Plan
by the Board of Directors, the outstanding shares of the Company's Common Stock
shall be increased or decreased or changed into or exchanged for a different
number or kind of shares of stock or other
12
<PAGE> 13
securities of the Company or of another corporation through reorganization,
merger or consolidation, recapitalization, reclassification, stock split,
split-up, combination or exchange of shares or declaration of any dividends
payable in Common Stock, the Board of Directors shall appropriately adjust (i)
the number of shares of Common Stock (and the option price per share) subject to
the unexercised portion of any outstanding Option (to the nearest possible full
share), provided, however, that the limitations of Section 424 of the Code shall
apply with respect to adjustments made to ISOs; (ii) the number of shares of
Common Stock to be acquired pursuant to an Award which have not become vested,
and (iii) the number of shares of Common Stock for which Options and/or Awards
may be granted under the Plan, as set forth in Section 4.1 hereof, and such
adjustments shall be effective and binding for all purposes of the Plan.
9. Restrictions on Transfer and Tag-Along/Drag-Along Rights.
(a) Restrictions. Except as otherwise provided in an Option or Award
Agreement, neither a Participant nor a Permitted Transferee (collectively, a
"Holder") may directly or indirectly (including by operation of law) assign,
bequeath, devise, encumber, hypothecate, mortgage, pledge, sell, or otherwise
transfer or dispose of (collectively, "Transfer") any of the Option Shares
purchased pursuant hereto or shares of Common Stock granted or sold through an
Award other than pursuant to the terms of this Section 9. Any purported Transfer
of such Option Shares or shares of Common Stock obtained through an Award
(collectively "Shares") in violation of the terms of this Section 9 shall be
null, void, and of no effect.
(b) Right of Repurchase. If a Holder receives a bona fide offer from an
independent third party for his or her Shares purchased pursuant hereto and he
or she desires to Transfer such Shares pursuant to such offer, the Holder must
give written notice of such proposed Transfer (a "Proposed Transfer Notice") to
the Company. The Proposed Transfer Notice shall set forth the Holder's name and
the name of the proposed transferee and the terms of the proposed Transfer,
including the date of the proposed Transfer, the purchase price, and the
consideration that the proposed transferee will transfer to the Holder in
satisfaction of the purchase price. The Company shall have 30 days following its
receipt of the Proposed Transfer Notice to notify the Holder that the Company
elects to purchase all or any portion of the Shares of Common Stock purchased
pursuant hereto set forth in the Proposed Transfer Notice that the Holder owns
for an amount equal to the Repurchase Price (as hereinafter defined), and during
such 30-day period, the Holder may not Transfer the Shares to such third party.
If the Company so notifies the Holder, the Holder shall sell such Shares of
Common Stock to the Company in accordance with paragraph 9(e) hereof. If the
Company does not so notify the Holder (or elects to purchase less than all of
the Shares of Common Stock set forth in the Proposed Transfer Notice), the
Holder may sell the number of shares of Common Stock specified in the Proposed
Transfer Notice (or the number of shares of Common Stock set forth in the
Proposed Transfer Notice that the Company does not elect to purchase) to the
proposed transferee in accordance with the terms set forth therein during the 60
days immediately following the expiration of the Company's 30-day election
period and thereafter the provisions of paragraph 9(i) hereof shall apply to
such Shares. If the Holder does not sell such Shares of Common Stock within such
60 day period, any subsequent Transfer of such Shares must be pursuant to a new
Proposed Transfer Notice.
(c) Cessation of Relationship. If the Company and its affiliates and
subsidiaries cease to engage the Holder as an Employee for any reason (including
death or disability), the
13
<PAGE> 14
Company may at any time thereafter until the lapse of this provision under
paragraph 9(f), notify the Holder that it elects to purchase all or any portion
of his or her Shares purchased pursuant hereto that the Holder owns for an
amount equal to the Repurchase Price. If the Company so notifies the Holder, the
Holder shall sell such shares of Common Stock to the Company in accordance with
paragraph 9(e) hereof. The Company's waiver of its rights under this paragraph
9(c) shall not affect its rights under paragraph 9(b) or (d) hereof.
(d) Bankruptcy. If a Holder files a voluntary bankruptcy petition or
another person files an involuntary bankruptcy petition against a Holder, the
Company shall have 90 days immediately following the day it is notified of such
bankruptcy petition to notify the Holder that the Company elects to purchase all
or any portion of his Shares purchased pursuant hereto that the Holder owns for
an amount equal to the Repurchase Price. If the Company so notifies the Holder,
the Holder shall sell such Shares to the Company in accordance with paragraph
9(e) hereof. The Company's waiver of its rights under this paragraph 9(d) shall
not affect its rights under paragraphs 9(b) or (c) hereof.
(e) Closing of the Repurchase. The closing of the Company's purchase of
Shares of Common Stock pursuant to paragraphs 9(b), (c), and (d) hereof shall
occur on the 20th day of the month immediately following the month during which
the Holder receives the Company's notice of its election to purchase such Shares
of Common Stock (unless such closing is delayed pursuant to the Holder's
disagreement with the computation of the Fair Market Value in accordance with
paragraph 9(h) hereof). At such closing, the Company shall deliver to the Holder
a check in the amount of the Repurchase Price for the Shares of Common Stock to
be sold and the Holder shall deliver to the Company the stock certificates
representing such Shares along with a stock power transferring those Shares to
the Company.
(f) Lapse of Restrictions. The restrictions set forth in paragraphs 9(b),
(c) and (d) hereof shall apply to the Shares of Common Stock purchased pursuant
hereto and each Holder thereof until the earlier of (i) the Company's issuance
of Shares of Common Stock pursuant to a firm commitment underwritten public
offering pursuant to a registration statement on Form S-1 or Form S-2 under the
Securities Act of 1933, as amended, or (ii) the consummation of a sale of all or
substantially all of the Company's Common Stock or assets to a third party.
(g) Repurchase Price. The "Repurchase Price" shall be the product of:
(a) the number of shares of Common Stock to be sold pursuant to this
Section 9 multiplied by
(b) the Fair Market Value of the Common Stock as determined in
accordance with Section 2.8(3).
(h) Disagreement Concerning Computation of Fair Market Value. If a Holder
disagrees with the Fair Market Value computed under paragraph 9(g) hereof, the
Holder must notify the Company within five (5) days after he receives the
Company's notice of such Fair Market Value. Upon receiving such notice from the
Holder, the Company shall promptly engage the firm of independent certified
public accountants (the "Certified Public Accountants") that audits the
Company's financial statements to determine the Fair Market Value. The Certified
14
<PAGE> 15
Public Accountants shall render a report to both the Company and the Holder
determining the Fair Market Value as soon thereafter as possible. The Fair
Market Value as determined by the Certified Public Accountants shall then be
used to determine the Repurchase Price of the Holder's Shares. The closing of
the Company's purchase of such Shares shall occur on the 5th day after the
rendering of such report. The Holder shall pay all fees and expenses of the
Certified Public Accountant with respect to the rendering of such report;
provided that if the Fair Market Value as determined by the Certified Public
Accountants is greater than 110 percent of the Fair Market Value as determined
by the Company, the Company shall pay such fees and expenses.
(i) Transferees. The restrictions on the Transfer of the Shares of Common
Stock purchased pursuant hereto set forth in this Section 9 shall bind any
Permitted Transferee or other subsequent holder of such Shares, who shall be
treated as if he were the Holder (i.e., the Participant or Permitted Transferee)
when determining those restrictions. Moreover, any waiver of the Company's
election to purchase Shares of Common Stock pursuant to paragraph 9(b) hereof
shall not waive the Company's right to purchase such Shares from the Holder
thereof pursuant to paragraph 9(b) hereof if such Holder desires to Transfer
such Shares. If the Holder dies or becomes legally incompetent, his
administrator, executor, or representative shall be considered as if he were the
Holder for purposes hereof. The Transfer of Shares of Common Stock to the
Holder's administrator, executor, or representative (or estate in connection
therewith) shall not be considered a Transfer of those shares. The subsequent
Transfer of such shares from such administrator, executor, or representative (or
estate in connection therewith), however, shall be a Transfer.
(j) Lock-Up Agreement. By participating herein, each Holder acknowledges
that in connection with any public offering of the Common Stock, the
underwriters for the Company may require that the Company's officers, directors,
and/or certain other shareholders not sell their shares of Common Stock for a
certain period of time after the effectiveness of the Registration Statement
filed in connection with such offering. By participating herein, each Holder
agrees that upon the Company's request in connection with any such public
offering, that he will not, directly or indirectly, offer, sell, contract to
sell, make subject to any purchase option, or otherwise dispose of any shares of
Common Stock for a period requested by the underwriter or its representative,
not to exceed 30 days before and 180 days after the date of the effectiveness of
the Registration Statement, without the prior written consent of the underwriter
or its representative.
(k) Drag-Along Rights.
(1) Prior to an IPO, initial firm commitment underwritten public
offering of the Company Common Stock pursuant to a registration statement
on Form S-1 or S-2 under the Securities Act of 1933, as amended, if the
holders of 51% of the then outstanding shares of Common Stock (including
Common Stock issuable upon conversion of Convertible Common Stock), decide
to sell or otherwise dispose of their stock to an unrelated third party
(other than by way of gift or transfer to a family member or family trust,
partnership, or corporation), or vote to approve a tender offer or plan of
merger, whereby the shares of Company Common stock and/or Convertible
Common Stock will be sold, transferred, disposed of, or converted in cash,
securities, or
15
<PAGE> 16
combination thereof, such majority shareholders shall have the right to
require the Holder to likewise, on the same terms and conditions, sell,
transfer, or dispose of, or accept such consideration in exchange for
surrender of his shares of Common Stock or Convertible Common Stock, and by
participating hereto, each Holder hereby agrees to do so.
(2) Each Holder hereby waives his right of appraisal as provided by
Section 262 of the Delaware General Corporation Law.
Section 10. Effect of the Plan on Employment Relationship. Neither the Plan
nor any Option and/or Award granted hereunder to a Participant shall be
construed as altering the "at-will" nature of Participant's employment or
conferring upon such Participant any right to continue in the employ of (or
otherwise provide services to) the Company or any Subsidiary or Parent thereof,
or limit in any respect the right of the Company or any Subsidiary or Parent
thereof to terminate such Participant's employment or other relationship with
the Company or any Subsidiary or Parent, as the case may be, at any time.
Section 11. Amendment of the Plan. The Committee or Board of Directors may
amend or suspend the Plan or any portion thereof at any time, provided such
amendment is made with stockholder approval if such approval is necessary to
comply with any tax or regulatory requirement. The Committee in its sole
discretion may amend the Plan so as to conform with local rules and regulations
subject to any provisions to the contrary specified herein.
Section 12. Amendment of an Option or Award Agreement. In its sole and
complete discretion, the Committee may at any time amend any Option or Award
Agreement for the following reasons: (i) additions and/or changes to the Code,
any federal or state securities law, or other law or regulations applicable to
the Option or Award, are made, and such additions and/or changes have some
effect on the Option or Award; or (ii) any other event not described in clause
(i) occurs and the Participant gives his or her consent to such amendment.
Section 13. Exemption from Computation of Compensation for Other Purposes.
By acceptance of an applicable Option or Award, subject to the conditions of
such Option or Award, each Participant shall be considered in agreement that all
shares sold or awarded and all Options granted under this Plan shall be
considered special incentive compensation and will be exempt from inclusion as
"wages" or "salary" in pension, retirement, life insurance, and other employee
benefits arrangements of the Company, except as determined otherwise by the
Company. In addition, each beneficiary of a deceased Participant shall be in
agreement that all such Options and Awards will be exempt from inclusion in
"wages" or "salary" for purposes of calculating benefits of any life insurance
coverage sponsored by the Company.
Section 14. Listing, Registration and Other Legal Compliance. No Options,
Awards or shares of the Common Stock shall be required to be issued or granted
under the Plan unless legal counsel to the Company shall be satisfied that such
issuance or grant will be in compliance with all applicable federal and state
securities laws and regulations and any other applicable laws or regulations.
The Committee may require, as a condition of any payment or share issuance, that
certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be executed or
provided to the Company to assure compliance with all such applicable laws or
regulations. Any certificates for shares of Common
16
<PAGE> 17
Stock delivered under the Plan may be subject to such stock-transfer orders and
such other restrictions as the Committee may deem advisable under the rules,
regulations, or other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities law. In addition, if, at any time
specified herein (or in any Agreement or otherwise) for (a) the making of any
Option or Award, or the making of any determination, (b) the issuance or other
distribution of Common Stock, or (c) the payment of amounts to or through a
Participant or Permitted Transferee with respect to any Option or Award, any
law, rule, regulation, or other requirement of any governmental authority or
agency shall require the Company, any affiliate, or any Participant or Permitted
Transferee (or any estate, designated beneficiary, or other legal representative
thereof) to take any action in connection with any such determination, any such
shares to be issued or distributed, any such payment, or the making of any such
determination, as the case may be, shall be deferred until such required action
is taken.
Section 15. Rights as Stockholder. Subject to the Award provisions, no
Participant, Permitted Transferee or beneficiary shall be deemed a stockholder
of the Company nor have any rights as such with respect to any shares to be
provided under the Plan until he or she has become the holder of such shares.
Notwithstanding the aforementioned, with respect to restricted stock Awards
under this Plan, the Participant, Permitted Transferee or beneficiary of such
Award shall be deemed the owner of such shares provided herein. As such, unless
contrary to the provisions herein or in any such related Agreement, such
stockholder shall be entitled to full voting, dividend and distribution rights
as provided any other Company stockholder for as long as the Participant or
Permitted Transferee continues to be deemed the owner of such stock.
Section 16. Construction of the Plan. The Plan, and its rules, rights,
agreements and regulations, shall be governed, construed, interpreted and
administered solely in accordance with the laws of the state of Delaware. In the
event any provision of the Plan shall be held invalid, illegal or unenforceable,
in whole or in part, for any reason, such determination shall not affect the
validity, legality or enforceability of any remaining provision, portion of
provision or the Plan overall, which shall remain in full force and effect as if
the Plan had been absent the invalid, illegal or unenforceable provision or
portion thereof
Section 17. Termination of the Plan. The Board of Directors may terminate
the Plan at any time. Unless the Plan shall theretofore have been terminated by
the Board of Directors, the Plan shall terminate ten years after the date of its
initial adoption by the Board of Directors. No Option and/or Award may be
granted hereunder after termination of the Plan. The termination or amendment of
the Plan shall not alter or impair any rights or obligations under any Option
and/or Award theretofore granted under the Plan.
Section 18. Effective Date of the Plan. The Plan shall be effective as of
June 1, 2000, the date on which the Plan was adopted by the Board of Directors
of the Company.
* * * *
17
