<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
MOSAIX, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1273645
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
6464 - 185TH AVENUE N.E.
REDMOND, WASHINGTON 98052-6736
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
MOSAIX, INC.
1991 EMPLOYEE STOCK PURCHASE PLAN
RESTATED 1992 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1996 STOCK INCENTIVE COMPENSATION PLAN
1997 NONOFFICER STOCK INCENTIVE COMPENSATION PLAN
(FULL TITLE OF THE PLANS)
WILLIAM BRADFORD WELLER
ASSISTANT SECRETARY AND GENERAL COUNSEL
6464 - 185TH AVENUE N.E.
REDMOND, WASHINGTON 98052-6736
(425) 558-8272
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
MICHAEL E. STANSBURY
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED MAXIMUM
TITLE OF SECURITIES NUMBER TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER SHARE(2) PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.01 PAR VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
1991 EMPLOYEE STOCK PURCHASE PLAN 200,000 $10.94 $2,188,000 $646
- ------------------------------------------------------------------------------------------------------------------------------------
1992 STOCK OPTION PLAN FOR 100,000 $10.94 $1,094,000 $323
NON-EMPLOYEE DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
1996 STOCK INCENTIVE 300,000 $10.94 $3,282,000 $968
COMPENSATION PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
1997 NONOFFICER STOCK 200,000 $10.94 $2,188,000 $646
INCENTIVE COMPENSATION PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 800,000 $2,583
====================================================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant
to such employee benefit plans as the result of any future stock split,
stock dividend or similar adjustment of the Registrant's outstanding
Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee.
The price per share is estimated to be $10.94 based on the average of
the high ($11.38) and low ($10.50) sales prices for the Common Stock on
May 22, 1998 as reported on the Nasdaq National Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997, filed on March 13, 1998, which contains audited
financial statements for the most recent fiscal year for which such statements
have been filed;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the Annual Report on Form
10-K referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in
the Registration Statement on Form 8-A filed on April 27, 1990 under Section
12(g) of the Exchange Act.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof and prior to the filing
of a post-effective amendment, which indicate that the securities offered hereby
have been sold or which deregister the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the Registrant's Restated Bylaws provides for
indemnification of the Registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act authorizes
a corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, self-dealing or illegal
corporate loans or distributions, or any transactions from which the director
personally receives a benefit in money, property or services to which the
director is not entitled. Article 7 of the Registrant's Restated Articles of
Incorporation contains provisions implementing, to the fullest extent permitted
by Washington law, such limitations on a director's liability to the Registrant
and its shareholders.
Officers and directors of the Registrant are covered by insurance (with
certain exceptions and certain limitations) that indemnifies them against losses
and liabilities arising from certain alleged "wrongful acts," including alleged
errors or misstatements, or certain other alleged wrongful acts or omissions
constituting neglect or breach of duty.
II-1
<PAGE> 3
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ --------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Mosaix, Inc. 1991 Employee Stock Purchase Plan
99.2 Mosaix, Inc. Restated 1992 Stock Option Plan for Non-Employee
Directors
99.3 Mosaix, Inc. 1996 Stock Incentive Compensation Plan
99.4 Mosaix, Inc. 1997 Nonofficer Stock Incentive Compensation Plan
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 4
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Redmond,
State of Washington, on the 27th day of May, 1998.
MOSAIX, INC.
/s/ NICHOLAS A. TILIACOS
-------------------------------------
By: Nicholas A. Tiliacos
President and Chief Executive Officer
Each person whose individual signature appears below hereby authorizes
Nicholas A. Tiliacos, John J. Flavio, or either of them, as attorneys-in-fact
with full power of substitution, to execute in the name and on the behalf of
each person, individually and in each capacity stated below, and to file, any
and all amendments to this Registration Statement, including any and all
post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 27th day of May, 1998.
SIGNATURE TITLE
/s/ NICHOLAS A. TILIACOS President, Chief Executive Officer (Principal
- ----------------------------- Executive Officer) and Director
Nicholas A. Tiliacos
/s/ JOHN J. FLAVIO Senior Vice President and Chief Financial
- ----------------------------- Officer (Principal Financial Officer)
John J. Flavio
/s/ MICHAEL A. JACOBSEN Corporate Controller and Principal Accounting
- ----------------------------- Officer
Michael A. Jacobsen
/s/ HARVEY N. GILLIS Chairman of the Board
- -----------------------------
Harvey N. Gillis
/s/ TOM A. ALBERG Director
- -----------------------------
Tom A. Alberg
/s/ H. ROBERT GILL Director
- -----------------------------
H. Robert Gill
/s/ UMANG GUPTA Director
- -----------------------------
Umang Gupta
/s/ DAVID J. LADD Director
- -----------------------------
David J. Ladd
/s/ ROBERT S. LEVENTHAL Director
- -----------------------------
Robert S. Leventhal
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Mosaix, Inc. 1991 Employee Stock Purchase Plan
99.2 Mosaix, Inc. Restated 1992 Stock Option Plan for Non-Employee
Directors
99.3 Mosaix, Inc. 1996 Stock Incentive Compensation Plan
99.4 Mosaix, Inc. 1997 Nonofficer Stock Incentive Compensation Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
PERKINS COIE LLP
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: 206 583-8888 FACSIMILE: 206 583-8500
May 27, 1998
Mosaix, Inc.
6464 - 185th Avenue N.E.
Redmond, WA 98052-5032
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended ("the Act"), which you are filing with the
Securities and Exchange Commission with respect to 800,000 shares of Common
Stock, without par value (the "Shares"), which may be issued as follows: 200,000
shares pursuant to the Mosaix, Inc. 1991 Employee Stock Purchase Plan; 100,000
shares pursuant to the Mosaix, Inc. Restated 1992 Stock Option Plan for
Non-Employee Directors; 300,000 shares pursuant to the Mosaix, Inc. 1996 Stock
Incentive Compensation Plan; and 200,000 shares pursuant to the Mosaix, Inc.
1997 Nonofficer Stock Incentive Compensation Plan (the "Plans"). We have
examined the Registration Statement and such documents and records of the
Company and other documents as we have deemed necessary for the purpose of this
opinion.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plans have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such Shares and the sale thereof by the Company in
accordance with the terms of the Plans, and the receipt of consideration
therefor in accordance with the terms of the Plans, such Shares will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
------------------------------------------------------------
The Board of Directors
Mosaix, Inc.:
We consent to the use of our reports incorporated herein by reference.
KPMG Peat Marwick LLP
Seattle, Washington
May 27, 1998
<PAGE> 1
EXHIBIT 99.1
MOSAIX, INC.
1991 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purpose of this Mosaix, Inc.1991 Employee Stock Purchase Plan (the
"Plan") is to provide a means whereby certain employees of Mosaix, Inc. (the
"Company"), or of any Related Corporation designated by the Company, may be
granted stock options to purchase the common stock of the Company, in order to
attract and retain the services or advice of such employees and to provide added
incentive to them by encouraging stock ownership in the Company. It is the
intention of the Company to have the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed in a manner consistent
with the requirements of that Section of the Code.
SECTION 2. DEFINITIONS
2.1 ACCOUNT
"Account" shall mean the funds accumulated with respect to a Participant
as a result of deductions from his or her paycheck for the purpose of purchasing
stock under this Plan. The funds allocated to a Participant's Account shall
remain the property of the respective Participant at all times but may be
commingled with the general funds of the Company.
2.2 BASE PAY
"Base Pay" means the total cash compensation (including bonuses,
overtime, and commissions) as reflected on a Participant's W-2 income tax
statement (excluding moving expenses, reimbursed employee business expenses, and
taxable fringe benefits), except that a Participant may elect on the
Participation Agreement to exclude all bonuses from Base Pay.
2.3 CODE
"Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
2.4 ELIGIBLE EMPLOYEE
"Eligible Employee" shall mean any employee who is eligible to
participate in the Plan pursuant to the provisions of Section 5.
2.5 OFFERING DATE
"Offering Date" shall mean the commencement date of an offering, if such
date is a regular business day; otherwise, it shall mean the first regular
business day following such commencement date. A different date may be set by
resolution of the Board.
2.6 PARTICIPANT
"Participant" shall mean an Eligible Employee who has completed and
filed a Participation Agreement pursuant to Section 7.1.
1
<PAGE> 2
2.7 RELATED CORPORATION
"Related Corporation," when referring to a subsidiary corporation, shall
mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock of each of
the corporations other than the Company is owned by one of the other
corporations in such chain. When referring to a parent corporation, the term
"Related Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the
option, each of the corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
SECTION 3. ADMINISTRATION
This Plan shall be administered by the Compensation Committee of the
Board of Directors (the "Board"). The Compensation Committee shall hereinafter
be referred to as the Plan Administrator. The Plan Administrator shall be vested
with full authority to make, administer, and interpret such rules and
regulations as it deems necessary to administer the Plan, and any determination,
decision, or action of the Plan Administrator in connection with the
construction, interpretation, administration, or application of the Plan shall
be final, conclusive, and binding upon all Participants and any and all persons
claiming under or through any Participant, so long as such construction,
interpretation, administration, or application with respect to the stock options
correspond to the requirements of Section 423 of the Code, the regulations and
rulings thereunder, and any amendments thereto.
SECTION 4. STOCK SUBJECT TO THIS PLAN
4.1 TYPE AND NUMBER OF SHARES
The stock subject to this Plan shall be the Company's Common Stock (the
"Common Stock"), presently authorized but unissued or subsequently acquired by
the Company. Subject to adjustment as provided in Section 22, the aggregate
amount of Common Stock to be delivered upon the exercise of all options granted
under this Plan shall not exceed four hundred thousand (400,000) shares as such
Common Stock was constituted on the effective date of this Plan. If any option
granted under this Plan shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares subject thereto shall thereupon
again be available for delivery under this Plan.
4.2 LIMITATION ON EXERCISE
If the total number of shares for which options are to be exercised on
any date in accordance with Section 10 exceeds the number of shares then
available under the Plan (after deduction of all shares for which options have
been exercised or are then outstanding), the Plan Administrator shall make a pro
rata allocation of the shares remaining available in as nearly a uniform manner
as shall be practicable and as it shall determine to be equitable. The Company
shall give written notice of such reduction to each Participant affected thereby
and shall return any unused portion of each Participant's Account to such
Participant.
SECTION 5. ELIGIBILITY
Any regular employee of the Company (or any Related Corporation
designated by the Company) who is in the employ of the Company (or any such
designated Related Corporation) on one or more Offering Dates is eligible to
participate in the Plan, except for (i) employees who have been employed less
than three months, (ii) employees whose customary employment is less than twenty
(20) hours per week, and (iii) employees whose customary employment is for not
more than five (5) months in any calendar year. If the Company permits any
employees of a Related Corporation to participate in this Plan, then all
employees of that Related Corporation who meet the requirements of this Section
5 shall also be considered Eligible Employees.
2
<PAGE> 3
SECTION 6. OFFERINGS
There will be consecutive six-month offerings pursuant to the Plan,
until the earlier of the termination of the Plan or the date when all (except de
minimis amounts) the shares of Common Stock authorized under Section 4.1 to be
delivered upon exercise of options granted under the Plan have been so
delivered. The first offering shall commence on July 1, 1991 (or a later date
designated by the Board) and terminate on December 31, 1991. Thereafter,
offerings shall commence on each subsequent January 1 and July 1.
SECTION 7. PARTICIPATION BY PAYROLL DEDUCTION
7.1 An Eligible Employee may participate by completing a Participation
Agreement provided by the Company authorizing payroll deductions, and completing
any other papers deemed necessary by the Company or Plan Administrator and
filing the Agreement and any other such papers with the Company no later than
ten (10) business days prior to the commencement date (January 1 or July 1) of
the offering in which the Eligible Employee wishes to participate.
Participation, in one offering under the Plan shall neither limit, nor require,
participation in any other offering.
7.2 Payroll deductions for a Participant shall commence on the Offering
Date, and shall end on the termination date of such offering unless earlier
terminated by the Participant as provided in Section 13.
7.3 At the time a Participant files his Participation Agreement, the
Participant shall elect to have payroll deductions made from the Participant's
Base Pay, measured by whole number percentages from two (2) up to a maximum of
ten percent (10%) of Base Pay, on each pay day during the time he or she is a
Participant in an offering.
7.4 All payroll deductions made for a Participant shall be credited to
the Participant's Account under the Plan. A Participant may not make any
separate cash payment into such Account, nor may the Participant make payment
for shares other than by payroll deduction.
7.5 A Participant may discontinue his or her participation in the Plan
as provided in Section 13, but no other change can be made during an offering.
SECTION 8. OPTION PRICE
The purchase price per share of Common Stock during any offering shall
be the lesser of (1) 85% of the fair market value of the Common Stock on the
Offering Date or (2) 85% of the fair market value of the stock on the last
business day of the offering. Fair market value shall mean the closing price as
reported on the National Association of Securities Dealers Automated Quotation
System, or if the stock is traded on a stock exchange the closing price for the
stock on the principal such exchange. Notwithstanding the foregoing, for the
offering that begins on January 1, 1998 and ends on June 30, 1998, the purchase
price per share shall be the lesser of (1) 85% of the fair market value of the
Common Stock on the date the Company's shareholders approve an amendment to the
Plan to increase the shares authorized to be delivered under the Plan from
200,000 to 400,000 or (2) 85% of the fair market value of the Common Stock on
the last business day of the offering; provided, however, that in no event shall
the purchase price per share be less than the lesser of 85% of the fair market
value of the Common Stock on the first or last business days of the offering.
SECTION 9. GRANTING OF OPTION
On each Offering Date, this Plan shall be deemed to have granted to the
Participant an option for as many full shares as he or she will be able to
purchase with the payroll deductions credited to his or her Account during
participation in that offering. Notwithstanding the foregoing, commencing as of
January 1, 1995, no Participant may purchase more than 1,000 shares of Common
Stock during any single offering.
3
<PAGE> 4
SECTION 10. EXERCISE OF OPTION
Each Eligible Employee who continues to be a Participant in an offering
on the last business day of that offering shall be deemed to have exercised his
or her option on such date and shall be deemed to have purchased from the
Company such number of full shares of Common Stock reserved for the purpose of
the Plan as the accumulated payroll deductions on such date will pay for at the
option price, subject to the limitations of Section 4.2.
SECTION 11. PARTICIPANT'S RIGHTS AS A SHAREHOLDER
11.1 No Participant shall have any right as a shareholder with respect
to any shares of Common Stock until the shares have been purchased in accordance
with Section 10 above.
11.2 Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant, or, if the Participant so directs, by
written notice to the Company prior to the termination date of the pertinent
offering, in the names of the Participant and one such other person as may be
designated by the Participant, as joint tenants with right of survivorship,
tenants in common or as community property, to the extent and in the manner
permitted by applicable law.
SECTION 12. DELIVERY OF STOCK CERTIFICATES
Certificates for stock issued to Participants will be delivered as soon
as practicable after the end of each offering.
SECTION 13. WITHDRAWAL AND SUSPENSION
13.1 A Participant may withdraw from the Plan at any time prior to the
last business day of each offering by delivering a Withdrawal Notice to the
Company, in which event the Company will refund the entire balance of his or her
Account as soon as practicable thereafter.
13.2 To re-enter the Plan, an Eligible Employee who has previously
withdrawn must file a new Participation Agreement in accordance with Section
7.1. Re-entry into the Plan cannot, however, become effective before the
beginning of the next offering following withdrawal.
13.3 The Plan Administrator, in its sole discretion, may authorize and
permit a Participant to suspend his or her payroll deductions at any time prior
to the last business day of each offering by delivering a Suspension Notice to
the Company; provided, however, that such a suspension shall not be allowable
for those persons who are subject to Section 16 of the Securities and Exchange
Act of 1934, as amended. In the event of such a suspension, the balance of the
Participant's Account will be used at the termination of the offering to
purchase shares of Common Stock in accordance with Section 10.
13.4 A Participant's payroll deductions will automatically be suspended
when the "maximum permissible amount" has been deducted from his or her payroll
check. "Maximum permissible amount," for this purpose, means the lesser of (i)
1,000 (after January 1, 1995, the maximum number of shares purchasable during an
offering) multiplied by 85% of the fair market value of a share of Common Stock
on the Offering Date (the maximum purchase price), and (ii) the amount necessary
to purchase, at a price equal to 85% of the fair market value of a share of
Common Stock on the Offering Date, the greatest full number of shares of Common
Stock that does not exceed the limitation imposed under Section 18.1.
13.5 To resume payroll deductions, an Eligible Employee who has
previously had his or her payroll deductions suspended under either Section 13.3
or 13.4 must file a new Participation Agreement in accordance with Section 7.1.
Resumption of payroll deductions cannot, however, become effective before the
beginning of the next offering following suspension of such deductions.
4
<PAGE> 5
SECTION 14. CARRYOVER OF ACCOUNT
At the termination of each offering, the Company shall automatically
re-enroll each Participant in the next offering. Upon re-enrollment, the
balance, if any, in the Participant's Account shall be used for option exercises
in the new offering. The Participant may elect not to re-enroll in the Plan by
filing notice of such election with the Company no later than ten (10) business
days prior to the commencement date (January 1 or July 1) of the next offering.
If the Participant does not re-enroll in the Plan or the Plan terminates, the
balance, if any, of each Participant's Account shall be refunded to him or her.
SECTION 15. INTEREST
No interest will be paid or allowed on any money in the Accounts of
Participants.
SECTION 16. RIGHTS NOT TRANSFERABLE
No Participant shall be permitted to sell, assign, transfer, pledge, or
otherwise dispose of or encumber either the payroll deductions credited to his
or her Account or any rights with regard to the exercise of an option or to
receive shares under the Plan other than by will or the laws of descent and
distribution, and such right and interest shall not be liable for, or subject
to, the debts, contracts, or liabilities of the Participant. If any such action
is taken by the Participant, or any claim is asserted by any other party in
respect of such right and interest whether by garnishment, levy, attachment or
otherwise, such action or claim will be treated as an election by the
Participant to withdraw funds in accordance with Section 13.1.
SECTION 17. TERMINATION OF EMPLOYMENT
Upon termination of employment for any reason, on or prior to the last
business day of the offering, the balance in the Account of a Participant shall
be paid to the Participant or his or her estate.
SECTION 18. DOLLAR AMOUNT LIMITATION
18.1 No Eligible Employee may be granted an option under this Plan which
would permit the Eligible Employee's rights to purchase Common Stock under all
"employee stock purchase plans" of the Company, including any parent corporation
or subsidiary corporation (as the terms "parent corporation" and "subsidiary
corporation" are defined in Sections 425(e) and (f) of the Code), to accrue at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value
of such Common Stock (determined at the Offering Date) for each calendar year in
which such option is outstanding at any time.
18.2 For purposes of this Section 18.1, (i) the right to purchase stock
under an option accrues when the option (or any portion thereof) first becomes
exercisable during the calendar year, and (ii) a right to purchase stock which
has accrued under one option granted pursuant to this Plan may not be carried
over to any other option.
SECTION 19. CONTINUATION OF EMPLOYMENT
Nothing in this Plan or in any option granted pursuant to this Plan
shall confer upon any Participant any right to continue in the employ of the
Company or of a Related Corporation, or to interfere in any way with the right
of the Company or of any Related Corporation to terminate his or her employment
or other relationship with the Company or Related Corporation at any time.
SECTION 20. WITHHOLDING TAXES
Each Participant will agree by entering the Plan, promptly to give the
Company notice of any such stock disposed of within two years after the date of
grant of the applicable option, showing the number of such shares disposed of.
As a condition to the exercise of a stock option, the Participant shall make
such arrangements as the
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<PAGE> 6
Plan Administrator may require for the satisfaction of any federal, state or
local withholding tax obligations that may arise in connection with the exercise
of the stock option and the subsequent sale of the stock acquired upon the
exercise of the option within two years after the date of grant of the option.
SECTION 21. GREATER THAN FIVE PERCENT SHAREHOLDERS
No Eligible Employee may be granted an option under this Plan if such
employee, immediately after the option is granted, owns stock of the Company
possessing five percent (5%) or more of the total combined voting power of all
classes of stock of the Company or of any Related Corporations. For purposes of
this Section 21, the rules of Section 425(d) of the Code shall apply in
determining the stock ownership of an employee, and stock which an employee may
purchase under corresponding options (under this Plan or any other plan or
contract) shall be treated as stock owned by such employee.
SECTION 22. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
22.1 The aggregate number and class of shares for which options may be
granted under this Plan, the number and class of shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), and each such option, may all be proportionately adjusted by the Plan
Administrator as it deems appropriate, for any change in the structure of the
Common Stock of the Company resulting from a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation, or
any other capital adjustment.
22.2 All adjustments under this Section 22 shall be made by the Plan
Administrator, and its determination as to what adjustments shall be made, and
the extent thereof, shall be final, binding and conclusive. Unless a Participant
agrees otherwise, any change or adjustment to an option shall be made in such a
manner so as not to constitute a "modification," as defined in Section 425(h) of
the Code, and so as not to cause the Participant's stock option issued hereunder
to fail to continue to qualify as a stock option granted pursuant to an employee
stock purchase plan, as defined in Section 423(b) of the Code.
SECTION 23. SECURITIES REGULATION
23.1 Shares shall not be issued with respect to an option granted under
this Plan unless the exercise of such option and the issuance and delivery of
such shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, any applicable state securities laws, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, the requirements of
any automated quotation system through which shares may then be traded, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance, including the availability of an exemption from registration
for the issuance and sale of any shares hereunder. Inability of the Company to
obtain, from any regulatory body having jurisdiction, the authority deemed by
the Company's counsel to be necessary for the lawful issuance and sale of any
shares hereunder or the unavailability of an exemption from registration for the
issuance and sale of any shares hereunder shall relieve the Company of any
liability in respect of the nonissuance or sale of such shares as to which such
requisite authority shall not have been obtained.
23.2 As a condition to the exercise of an option, the Company may
require the Participant 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 by any relevant
provision of the aforementioned laws. At the option of the Company, a
stop-transfer order against any shares of stock may be placed on the official
stock books and records of the Company, and a legend indicating that the stock
may not be pledged, sold or otherwise transferred unless an opinion of counsel
is provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on stock
certificates in order to ensure exemption from registration. The Plan
Administrator may also require such other action or agreement by the
Participants as may from time to time be necessary to comply with the federal
and state securities laws. THIS PROVISION
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SHALL NOT OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK
HEREUNDER.
SECTION 24. AMENDMENT AND TERMINATION
The Board may at any time suspend, amend or terminate this Plan;
provided, however, the Board may not amend this Plan without appropriate
shareholder approval if such approval is required by Section 423 of the Code or
the Securities and Exchange Commission Rule 16b-3 under the 1934 Act or any
successor rule or other regulatory requirement. The Plan Administrator may also
amend the Plan; provided, however, that the Plan Administrator may not amend the
Plan in any way which would require shareholder approval.
SECTION 25. INDEMNIFICATION OF BOARD AND PLAN ADMINISTRATOR
In addition to all other rights of indemnification they may have as
Directors of the Company or as members of the body serving as the Plan
Administrator, members of the Board and Plan Administrator shall be indemnified
by the Company to the fullest extent provided by law for all reasonable expenses
and liabilities of any type and nature, including attorneys' fees, incurred in
connection with any action, suit or proceeding to which they or any of them are
a party by reason of, or in connection with, any stock option granted hereunder,
and against all amounts paid by them in settlement thereof (if such settlement
is approved by independent legal counsel selected by the Company).
SECTION 26. EFFECTIVENESS
This Plan shall become effective upon adoption by the Board so long as
it receives any required approval by the holders of a majority of the Company's
outstanding shares of voting capital stock at any time within twelve (12) months
before or after the adoption of this Plan.
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<PAGE> 1
EXHIBIT 99.2
MOSAIX, INC.
RESTATED 1992 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I - PURPOSE
The purposes of the Mosaix, Inc. Restated 1992 Stock Option Plan for
Non-Employee Directors (the "Plan") are to attract and retain the services of
experienced and knowledgeable non-employee directors of Mosaix, Inc. (the
"Corporation") and to provide an incentive for such directors to increase their
proprietary interest in the Corporation's long-term success and progress.
ARTICLE II - SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Article VI hereof, the total
number of shares of common stock (the "Shares") of the Corporation for which
options may be granted under the Plan is 225,000 shares. The Shares shall be
shares presently authorized but unissued or subsequently acquired by the
Corporation and shall include shares representing the unexercised portion of any
option granted under the Plan which expires or terminates without being
exercised in full.
ARTICLE III - PLAN ADMINISTRATOR
The administrator of the Plan (the "Plan Administrator") shall be the
Board of Directors of the Corporation (the "Board"). Subject to the terms of the
Plan, the Plan Administrator shall have the power to construe the provisions of
the Plan, to determine all questions arising thereunder and to adopt and amend
such rules and regulations for the administration of the Plan as it may deem
desirable.
ARTICLE IV - PARTICIPATION IN THE PLAN
Each Director of the Corporation elected or appointed who is not
otherwise an employee of the Corporation or any subsidiary ("Eligible Director")
shall be eligible to receive the following option grants under the Plan:
1. INITIAL GRANTS
Prior to the date of the Annual Meeting for 1998, an initial grant (an
"Initial Grant") of an option to purchase 5,000 shares shall automatically be
granted to each person who is an Eligible Director as of the date of approval of
this Plan, upon such date of adoption, and to each person who becomes an
Eligible Director following the date of approval of this Plan, upon the earlier
of the Director's initial election or appointment as a Director of the
Corporation.
Initial Grants shall vest annually over five years from the date of
grant in accordance with the schedule set forth in Article V.
2. ADDITIONAL GRANTS
Commencing with the annual meeting of shareholders of the Corporation as
specified in the Corporation's Bylaws (the "Annual Meeting") for 1993 and
through the Annual Meeting for 1995, each Eligible Director shall automatically
receive an additional grant (an "Additional Grant") of an option to purchase
1,000 shares immediately following each Annual Meeting, and commencing with the
Annual
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Meeting for 1996 and prior to the date of the Annual Meeting for 1998, each
Eligible Director shall automatically receive an Additional Grant of an option
to purchase 2,000 shares immediately following each Annual Meeting; provided,
however, that a Director who has received an Initial Grant within six months
prior to an Annual Meeting shall not receive an Additional Grant until the next
year's Annual Meeting.
Additional Grants shall be fully vested and immediately exercisable upon
the date of grant.
3. DISCRETIONARY GRANTS
Beginning on the date of the 1998 Annual Meeting, and except for the
terms and conditions explicitly set forth in the Plan, for all other grants of
options ("Discretionary Grants"), the Plan Administrator shall have the
exclusive authority, in its discretion, to determine all matters relating to
Discretionary Grants under the Plan, including the selection of individuals to
be awarded Discretionary Grants, the number of Shares subject to a Discretionary
Grant, all terms, conditions, restrictions and limitations, if any, of a
Discretionary Grant and the terms of any instrument evidencing the Discretionary
Grant.
ARTICLE V - OPTION TERMS
Each option granted to an Eligible Director under the Plan and the
issuance of Shares thereunder shall be subject to the following terms:
1. OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Corporation and by the
Eligible Director to whom such option is granted. Each Agreement shall comply
with and be subject to the terms and conditions of the Plan. Any Agreement may
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Plan Administrator.
2. OPTION EXERCISE PRICE
The option exercise price for an option granted under the Plan shall be
the fair market value of the Shares covered by the option at the time the option
is granted. For purposes of the Plan, "fair market value" shall mean the closing
price or, if there is no closing price, the mean between the high and low sale
prices for the Shares quoted on the day of grant on the National Association of
Securities Dealers, Inc. Automated Quotation System or, if the Shares are traded
on an exchange, the closing price on the day of grant on the principal exchange
on which such Shares are then traded.
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<PAGE> 3
3. TIME AND MANNER OF EXERCISE OF OPTION
Initial Grants awarded pursuant to Article IV.1 and prior to the date of
the 1998 Annual Meeting shall become exercisable in accordance with the
following schedule:
<TABLE>
<CAPTION>
Date On and After Which Option Portion of Total Option
Is Exercisable Which Is Exercisable
-------------- --------------------
<S> <C>
Date of first subsequent Annual Meeting 20%
after grant
Date of second subsequent Annual Meeting 40%
after grant
Date of third subsequent Annual Meeting 60%
after grant
Date of fourth subsequent Annual Meeting 80%
after grant
Date of fifth subsequent Annual Meeting 100%
after grant
</TABLE>
Any option may be exercised by giving written notice, signed by the
person exercising the option, to the Corporation stating the number of Shares
with respect to which the option is being exercised, accompanied by payment in
full for such Shares, which payment may be in whole or in part (i) in cash or by
check, (ii) shares of the common stock of the Corporation already owned for at
least six (6) months by the person exercising the option, valued at fair market
value at the time of such exercise, or by (iii) delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker, to properly
deliver to the Corporation the amount of sale or loan proceeds to pay the
exercise price, all in accordance with the regulations of the Federal Reserve
Board.
4. TERM OF OPTIONS
If not otherwise established in the instrument evidencing the award of
an option granted after the date of the 1998 Annual Meeting, each option shall
expire ten years from the date of grant, but shall be subject to earlier
termination as follows:
(a) In the event of the death of an optionee, the option granted to such
optionee shall be exercisable at any time within five (5) years after the date
of death of such optionee (unless such option shall have been previously
terminated pursuant to the preceding paragraph), to the extent of the number of
shares covered by such option, whether or not such shares had become purchasable
by such optionee at the date of such optionee's death, by the estate of such
optionee, or by any person or persons whom the optionee shall have designated in
writing on forms prescribed by and filed with the Corporation or, if no such
designation has been made by the person or persons to whom the optionee's rights
have passed, by will or the laws of descent and distribution.
(b) In the event that an optionee ceases to be a Director of the
Corporation for any reason other than the death of the optionee, the option
granted to such optionee that has vested and become exercisable may be exercised
by him or her only within five (5) years after the date such optionee ceases to
be a Director of the Corporation.
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<PAGE> 4
5. TRANSFERABILITY
Options shall not be transferable or assignable other than by (a) will
or the laws of descent and distribution, (b) pursuant to a qualified domestic
relation order, or (c) to the extent permitted by Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, as then applicable to the Company's
benefits plans, by gift or other transfer to either (i) any trust or estate in
which the optionee or such optionee's spouse or other immediate family member
has a substantial beneficial interest or (ii) a spouse or other immediate family
member, provided that such transfer would continue to require such options to be
disclosed pursuant to Item 403 of Regulation S-K under the Securities Act of
1933, as amended from time to time.
6. PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS SHAREHOLDER
Neither the recipient of an option under the Plan nor his or her
successor(s) in interest shall have any rights as a shareholder of the
Corporation with respect to any Shares subject to an option granted to such
person until such person becomes a holder of record of such Shares.
7. LIMITATION AS TO DIRECTORSHIP
Neither the Plan, nor the granting of an option, nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has a right to
continue as a Director for any period of time or at any particular rate of
compensation.
8. REGULATORY APPROVAL AND COMPLIANCE
The Corporation shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under the Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under the Plan, without obtaining to the complete satisfaction of the
Plan Administrator the approval of all regulatory bodies deemed necessary by the
Plan Administrator, and without complying, to the Plan Administrator's complete
satisfaction, with all rules and regulations under federal, state or local law
deemed applicable by the Plan Administrator.
ARTICLE VI - CAPITAL ADJUSTMENTS
The aggregate number and class of Shares for which options may be
granted under this Plan, the number and class of Shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), and each such option, shall all be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a split-up or
consolidation of Shares or any like capital adjustment, or the payment of any
stock dividend.
In the event of any adjustment in the number of Shares covered by any
option, any fractional Shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full Shares
resulting from such adjustment.
ARTICLE VII - EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan
shall be borne by the Corporation, and none of such expenses shall be charged to
any optionee.
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<PAGE> 5
ARTICLE VIII - EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon adoption by the Board so long as it
receives approval by the holders of a majority of the Corporation's outstanding
shares of voting capital stock at the next Annual Meeting. The Plan shall
continue in effect until it is terminated by action of the Board or the
Corporation's shareholders, but such termination shall not affect the
then-outstanding terms of any options.
ARTICLE IX - TERMINATION AND AMENDMENT OF THE PLAN
The Board may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion; provided, however, that the Board may not amend
the Plan without the approval of the Corporation's shareholders to materially
increase the number of shares that may be issued under the Plan or change the
class of individuals eligible to participate in the Plan. Any amendment of the
Plan shall not impair or diminish any rights of an optionee or obligations of
the Company under such option, regardless of when such option was granted,
without the consent of the optionee.
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<PAGE> 1
EXHIBIT 99.3
MOSAIX, INC.
1996 STOCK INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Mosaix, Inc. 1996 Stock Incentive Compensation Plan
(the "Plan") is to enhance the long-term shareholder value of Mosaix, Inc., a
Washington corporation (the "Company"), by offering opportunities to employees,
directors, officers, consultants, agents, advisors and independent contractors
of the Company and its Subsidiaries (as defined in Section 2) to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and its Subsidiaries and to acquire and maintain stock ownership
in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 COMMON STOCK
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property, if following such merger or consolidation
the holders of the Company's outstanding voting securities immediately
prior
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<PAGE> 2
to such merger or consolidation own less than 66-2/3% of the outstanding
voting securities of the surviving corporation;
(b) Consummation of any sale, lease, exchange or other transfer
in one transaction or a series of related transactions of all or
substantially all of the Company's assets other than a transfer of the
Company's assets to a majority-owned subsidiary corporation (as the term
"subsidiary corporation" is defined in Section 8.3) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company; or
(d) Acquisition by a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of
the Plan) of the Exchange Act of a majority or more of the Company's
outstanding voting securities (whether directly or indirectly,
beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) pursuant to the Exchange Act.
2.7 DISABILITY
"Disability" means a mental or physical impairment of the Holder which
is expected to result in death or which has lasted or is expected to last for a
continuous period of 12 months or more and which causes the Holder to be unable,
in the opinion of the Company and two independent physicians, to perform his or
her duties for the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and the two independent physicians have furnished their
opinion of total disability to the Plan Administrator.
2.8 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.9 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing price
for the Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.
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<PAGE> 3
2.11 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction in the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are materially inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason;
(b) a reduction in the Holder's annual base salary;
(c) the Successor Corporation's requiring the Holder (without the
Holder's consent) to be based at any place outside a 35-mile radius of his or
her place of employment prior to a Corporate Transaction, except for reasonably
required travel on the Successor Corporation's business that is not materially
greater than such travel requirements prior to the Corporate Transaction;
(d) the Successor Corporation's failure to (i) continue in effect
any material compensation or benefit plan (or the substantial equivalent
thereof) in which the Holder was participating at the time of a Corporate
Transaction, including, but not limited to, the Plan, or (ii) provide the Holder
with compensation and benefits substantially equivalent (in terms of benefit
levels and/or reward opportunities) to those provided for under each material
employee benefit plan, program and practice as in effect immediately prior to
the Corporate Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent plan of
the Successor Corporation; or
(f) any purported termination of the Holder's employment or
service for Cause by the Successor Corporation that does not comply with the
terms of the Plan or any substantially equivalent plan of the Successor
Corporation.
2.12 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
2.13 HOLDER
"Holder" means the person to whom an Award is granted, a permitted
assignee or transferee or, for a Holder who has died, the personal
representative of the Holder's estate, the person(s) to whom the Holder's rights
under the Award have passed by will or the applicable laws of descent and
distribution or the beneficiary designated pursuant to Section 11.
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<PAGE> 4
2.14 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.15 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.16 OPTION
"Option" means the right to purchase Common Stock granted under Section
7.
2.17 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.18 RESTRICTED STOCK
"Restricted Stock" means shares of Common Stock granted under Section 9,
the rights of ownership of which are subject to restrictions prescribed by the
Plan Administrator.
2.19 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date under the Company's 401(k) Plan or other similar successor plan applicable
to salaried employees or, if no such plan exists, as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.20 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.21 STOCK AWARD
"Stock Award" means an Award granted under Section 9.
2.22 SUBSIDIARY
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
2.23 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth under Section 12.2.
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<PAGE> 5
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or committees
(which term includes subcommittees) appointed by, and consisting of two or more
members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator of the Plan with respect to any persons subject or likely to
become subject to Section 16 under the Exchange Act the provisions regarding (a)
"outside directors," as contemplated by Section 162(m) of the Code, and (b)
"non-employee directors," as contemplated by Rule 16b-3 under the Exchange Act.
The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible persons to different committees,
subject to such limitations as the Board deems appropriate. Committee members
shall serve for such term as the Board may determine, subject to removal by the
Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 12.1, a
maximum of 1,800,000 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares.
4.2 LIMITATIONS
(a) Subject to adjustment from time to time as provided in Section 12.1,
not more than an aggregate of 300,000 shares shall be available for issuance
pursuant to grants of Stock Awards under the Plan.
(b) Subject to adjustment from time to time as provided in Section 12.1,
not more than 100,000 shares of Common Stock may be made subject to Awards under
the Plan to any individual in the aggregate in any one fiscal year of the
Company except that the Company may make additional one-time grants of up to
300,000 shares to newly hired individual, such limitation to be applied in a
manner consistent with the requirements of, and only to the extent required for
compliance with, the exclusion from the limitation on deductibility of
compensation under Section 162(m) of the Code.
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4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan; provided, however, that for purposes of Section 4.2, any such shares shall
be counted in accordance with the requirements of Section 162(m) of the Code.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
key employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Incentive Stock Options, Nonqualified Stock
Options and Stock Awards. Awards may be granted singly or in combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, and the persons holding such
Awards shall be deemed to be Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
Subject to Section 6.2, the exercise price for shares purchased under an
Option shall be as determined by the Plan Administrator, but shall not be less
than 100% of the Fair Market Value of the Common Stock on the Grant Date.
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7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:
<TABLE>
<CAPTION>
Period of Holder's Continuous Employment or
Service With the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That Is Exercisable
-------------------------- -------------------
<S> <C>
After 1 year 25%
After 2 years 50%
After 3 years 75%
After 4 years 100%
</TABLE>
Unless the Plan Administrator determines otherwise, the vesting schedule of an
Option shall be adjusted proportionately to the extent a Holder's hours of
employment or service are reduced after the date of grant.
To the extent that the right to purchase shares has accrued thereunder,
an Option may be exercised from time to time by written notice to the Company,
in accordance with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Option is being exercised
and accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than ten shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check, or, unless the Plan Administrator at any time
determines otherwise, a combination of cash and/or check and one or both of the
following alternative forms: (a) tendering (either actually or, if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) Common Stock already owned by the Holder for at least six
months (or any shorter period necessary to avoid a charge to the Company's
earnings for financial reporting purposes) having a Fair Market Value on the day
prior to the exercise date equal to the aggregate Option exercise price or (b)
if and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions, to (i) a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise and (ii) the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board. In addition, the exercise
price for shares purchased under an Option may be paid, either singly or in
combination with one or
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more of the alternative forms of payment authorized by this Section 7.5, by (y)
a promissory note delivered pursuant to Section 10; or (z) such other
consideration as the Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other than
by reason of death or Cause, the Option shall be exercisable, to the extent of
the number of shares purchasable by the Holder at the date of such termination,
only (a) within one year if the termination of the Holder's employment or
services is coincident with Retirement, Early Retirement at the Company's
request or Disability or (b) within three months after the date the Holder
ceases to be an employee, director, officer, consultant, agent, advisor or
independent contractor of the Company or a Subsidiary if termination of the
Holder's employment or services is for any reason other than Retirement, Early
Retirement at the Company's request or Disability, but in no event later than
the remaining term of the Option. Any Option exercisable at the time of the
Holder's death may be exercised, to the extent of the number of shares
purchasable by the Holder at the date of the Holder's death, by the personal
representative of the Holder's estate, the person(s) to whom the Holder's rights
under the Award have passed by will or the applicable laws of descent and
distribution or the beneficiary designated pursuant to Section 11 at any time or
from time to time within one year after the date of death, but in no event later
than the remaining term of the Option. Any portion of an Option that is not
exercisable on the date of termination of the Holder's employment or services
shall terminate on such date, unless the Plan Administrator determines
otherwise. In case of termination of the Holder's employment or services for
Cause, the Option shall automatically terminate upon first notification to the
Holder of such termination, unless the Plan Administrator determines otherwise.
If a Holder's employment or services with the Company are suspended pending an
investigation of whether the Holder shall be terminated for Cause, all the
Holder's rights under any Option likewise shall be suspended during the period
of investigation.
A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a Company-approved leave of absence on the terms and
conditions of an option shall be determined by the Plan Administrator, in its
sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the optionee holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
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8.2 10% SHAREHOLDERS
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option
designated as an Incentive Stock Option must be exercised within three months
after termination of employment for reasons other than death, except that, in
the case of termination of employment due to total disability, such Option must
be exercised within one year after such termination. Employment shall not be
deemed to continue beyond the first 90 days of a leave of absence unless the
Holder's reemployment rights are guaranteed by statute or contract. For purposes
of this Section 8.5, "total disability" shall mean a mental or physical
impairment of the Holder that is expected to result in death or that has lasted
or is expected to last for a continuous period of 12 months or more and that
causes the Holder to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Holder must hold the shares issued
upon the exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of exercise. A
Holder may be subject to the alternative minimum tax at the time of exercise of
an Incentive Stock Option. The Plan Administrator may require a Holder to give
the Company prompt notice of any disposition of shares acquired by the exercise
of an Incentive Stock Option prior to the expiration of such holding periods.
8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 10 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
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<PAGE> 10
SECTION 9. STOCK AWARDS
9.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock on
such terms and conditions and subject to such restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals related to operating profit as a percentage of revenues, revenue and
profit growth, profit-related return ratios, such as return on equity, or cash
flow, where such goals may be stated in absolute terms or relative to comparison
companies), as the Plan Administrator shall determine, in its sole discretion,
which terms, conditions and restrictions shall be set forth in the instrument
evidencing the Award. The terms, conditions and restrictions that the Plan
Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions and the circumstances under which
forfeiture of Restricted Stock shall occur by reason of termination of the
Holder's services.
9.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Holder's release from any
terms, conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall deliver, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, a stock certificate for the
appropriate number of shares of Common Stock.
9.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 10. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist a Holder (including a Holder who is an officer or director of
the Company) in acquiring shares of Common Stock pursuant to an Award granted
under the Plan, the Plan Administrator, in its sole discretion, may authorize,
either at the Grant Date or at any time before the acquisition of Common Stock
pursuant to the Award, (a) the extension of a loan to the Holder by the Company,
(b) the payment by the Holder of the purchase price, if any, of the Common Stock
in installments, or (c) the guarantee by the Company of a loan obtained by the
grantee from a third party. The terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of and security for repayment,
will be subject to the Plan Administrator's discretion. Loans, installment
payments and loan guarantees may be granted with or without security. The
maximum credit available is the purchase price, if any, of the Common Stock
acquired, plus the maximum federal and state income and employment tax liability
that may be incurred in connection with the acquisition.
SECTION 11. ASSIGNABILITY
No Option granted under the Plan may be assigned or transferred by the
Holder other than by will or by the laws of descent and distribution, and,
during the Holder's lifetime, such Awards may be exercised only by the Holder or
a permitted assignee or transferee of the Holder (as provided below).
Notwithstanding the foregoing, and to the extent permitted by Section 422 of the
Code, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Holder of such Awards
to designate a beneficiary who may exercise the Award or receive compensation
under the Award after the
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<PAGE> 11
Holder's death; provided, however, that any Award so assigned or transferred
shall be subject to all the same terms and conditions contained in the
instrument evidencing the Award.
SECTION 12. ADJUSTMENTS
12.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend or other change in the Company's corporate or capital structure results
in (a) the outstanding shares, or any securities exchanged therefor or received
in their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and class of
securities subject to the Plan as set forth in Section 4.1, (ii) the maximum
number and class of securities that may be made subject to Awards to any
individual as set forth in Section 4.2, and (iii) the number and class of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding.
12.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the Award,
in the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested, except that such acceleration will not occur if, in the
opinion of the Company's accountants, it would render unavailable "pooling of
interest" accounting for a Corporate Transaction that would otherwise qualify
for such accounting treatment. Awards to persons other than executive officers,
as designated by the Board from time to time, shall not so accelerate, however,
if and to the extent that (a) such Award is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
(the "Successor Corporation") or to be replaced with a comparable award for the
purchase of shares of the capital stock of the Successor Corporation or (b) such
Award is to be replaced with a cash incentive program of the Successor
Corporation that preserves the spread existing at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same
vesting schedule applicable to such Award. The determination of Award
comparability above shall be made by the Plan Administrator, and its
determination shall be conclusive and binding. All such Awards shall terminate
and cease to remain outstanding immediately following the consummation of the
Corporate Transaction, except to the extent assumed by the Successor
Corporation. Any such Awards that are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time shall be accelerated in
the event that the Holder's employment or services should subsequently terminate
within two years following such Corporate Transaction, unless such employment or
services are terminated by the Successor Corporation for Cause or by the Holder
voluntarily without Good Reason.
12.3 FURTHER ADJUSTMENT OF AWARDS
Subject to Section 12.2, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Holders, with respect to
Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on,
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Awards so as to provide for earlier, later, extended or additional time for
exercise, lifting restrictions and other modifications, and the Plan
Administrator may take such actions with respect to all Holders, to certain
categories of Holders or only to individual Holders. The Plan Administrator may
take such action before or after granting Awards to which the action relates and
before or after any public announcement with respect to such sale, merger,
consolidation, reorganization, liquidation or change in control that is the
reason for such action.
12.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 13. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise of any Award. Subject to the Plan and applicable law, the
Plan Administrator, in its sole discretion, may permit the Holder to satisfy
withholding obligations, in whole or in part, by electing to have the Company
withhold shares of Common Stock or by transferring shares of Common Stock to the
Company, in such amounts as are equivalent to the Fair Market Value of the
withholding obligation. The Company shall have the right to withhold from any
Award or any shares of Common Stock issuable pursuant to an Award or from any
cash amounts otherwise due or to become due from the Company to the Holder an
amount equal to such taxes. The Company may also deduct from any Award any other
amounts due from the Holder to the Company or a Subsidiary.
SECTION 14. AMENDMENT AND TERMINATION OF PLAN
14.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board as it shall deem advisable;
however, to the extent required for compliance with Section 422 of the Code or
any applicable law or regulation, shareholder approval will be required for any
amendment that will (a) increase the total number of shares as to which Awards
may be granted under the Plan or that may be issued as Stock Awards, (b) modify
the class of persons eligible to receive Options, or (c) otherwise require
shareholder approval under any applicable law or regulation.
14.2 TERMINATION OF PLAN
The Company's shareholders or the Board may suspend or terminate the
Plan at any time. The Plan will have no fixed expiration date; provided,
however, that no Incentive Stock Options may be granted more than 10 years after
the earlier of the Plan's adoption by the Board and approval by the
shareholders.
14.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent
of the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan. Any change or
adjustment to an outstanding Incentive Stock Option shall not, without the
consent of the Holder, be made in a manner so as to constitute a "modification"
that would cause such Incentive Stock Option to fail to continue to qualify as
an Incentive Stock Option.
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SECTION 15. GENERAL
15.1 AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
15.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
None of the Plan, participation in the Plan as a Holder or any action of
the Plan Administrator taken under the Plan shall be construed as giving any
Holder or employee of the Company any right to be retained in the employ of the
Company or limit the Company's right to terminate the employment or services of
the Holder.
15.3 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Holder to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
15.4 NO RIGHTS AS A SHAREHOLDER
No Award shall entitle the Holder to any cash dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Award, free of all applicable
restrictions.
15.5 COMPLIANCE WITH LAWS AND REGULATIONS
It is the Company's intention that, if and so long as any of the
Company's equity securities are registered pursuant to Section 12(b) or 12(g) of
the Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under
the Exchange Act and, if any Plan provision is later found not to be in
compliance with such Rule 16b-3, the provision shall be deemed null and void,
and in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Board, in its sole discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan to Holders who
are officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other Holders.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code.
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15.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Holder, and no Holder shall
have any rights that are greater than those of a general unsecured creditor of
the Company.
15.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 16. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's shareholders at any time
within 12 months of such adoption or, if earlier, and to the extent required for
compliance with Rule 16b-3 under the Exchange Act, at the next annual meeting of
the Company's shareholders after adoption of the Plan by the Board.
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EXHIBIT 99.4
MOSAIX, INC.
1997 NONOFFICER STOCK INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Mosaix, Inc. 1997 Nonofficer Stock Incentive
Compensation Plan (the "Plan") is to enhance the long-term shareholder value of
Mosaix, Inc., a Washington corporation (the "Company"), by offering
opportunities to selected employees, consultants, agents, advisors and
independent contractors of the Company and its Subsidiaries (as defined in
Section 2) who are not directors or officers of the Company to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and its Subsidiaries and to acquire and maintain stock ownership
in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 COMMON STOCK
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or pursuant to
which shares of the Common Stock are converted into cash, securities or other
property, if following such merger or consolidation the holders of the
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Company's outstanding voting securities immediately prior to such merger or
consolidation own less than 66-2/3% of the outstanding voting securities of the
surviving corporation;
(b) Consummation of any sale, lease, exchange or other transfer
in one transaction or a series of related transactions of all or substantially
all of the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as the term "subsidiary corporation" is
defined for purposes of Section 422 of the Code) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company; or
(d) Acquisition by a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of the
Plan) of the Exchange Act of a majority or more of the Company's outstanding
voting securities (whether directly or indirectly, beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) pursuant to the Exchange Act.
2.7 DISABILITY
"Disability" means a mental or physical impairment of the Holder which
is expected to result in death or which has lasted or is expected to last for a
continuous period of 12 months or more and which causes the Holder to be unable,
in the opinion of the Company and two independent physicians, to perform his or
her duties for the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and the two independent physicians have furnished their
opinion of total disability to the Plan Administrator.
2.8 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.9 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing price
for the Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.
2.11 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
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2.12 HOLDER
"Holder" means the person to whom an Award is granted, a permitted
assignee or transferee or, for a Holder who has died, the personal
representative of the Holder's estate, the person(s) to whom the Holder's rights
under the Award have passed by will or the applicable laws of descent and
distribution or the beneficiary designated pursuant to Section 10.
2.13 OPTION
"Option" means the right to purchase Common Stock, which is not intended
to qualify as an incentive stock option under Section 422 of the Code and which
is granted under Section 7.
2.14 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board or
any senior executive officer designated to administer the Plan under Section
3.1.
2.15 RESTRICTED STOCK
"Restricted Stock" means shares of Common Stock granted under Section 8,
the rights of ownership of which are subject to restrictions prescribed by the
Plan Administrator.
2.16 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date under the Company's 401(k) Plan or other similar successor plan applicable
to salaried employees or, if no such plan exists, as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.17 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.18 STOCK AWARD
"Stock Award" means an Award granted under Section 8.
2.19 SUBSIDIARY
"Subsidiary" means any entity that is directly or indirectly controlled
by the Company or in which the Company has a significant ownership interest, as
determined by the Plan Administrator, and any entity that may become a direct or
indirect parent of the Company.
2.20 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth under Section 11.2.
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SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by (a) the Board, (b) a committee or
committees (which term includes subcommittees) appointed by, and consisting of
one or more members of, the Board, or (c) within limits specifically prescribed
by the Board, by a senior executive officer of the Company appointed by the
Board. The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible persons to different committees or to
a senior executive officer, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 11.1, a
maximum of 200,000 shares of Common Stock shall be available for issuance under
the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares.
4.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those employees of the Company
and its Subsidiaries who at the time the Award is granted are not directors or
officers of the Company as the Plan Administrator from time to time selects.
Awards may also be made to independent contractors, consultants, agents and
advisors who provide services to the Company and its Subsidiaries and who at the
time the Award is granted are not directors or officers of the Company.
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SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Options and Stock Awards. Awards may be
granted singly or in combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, and the persons holding such
Awards shall be deemed to be Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options.
7.2 OPTION EXERCISE PRICE
Subject to Section 6.2, the exercise price for shares purchased under an
Option shall be as determined by the Plan Administrator, but shall not be less
than 100% of the Fair Market Value of the Common Stock on the Grant Date.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:
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<TABLE>
<CAPTION>
PERIOD OF HOLDER'S CONTINUOUS EMPLOYMENT OR
SERVICE WITH THE COMPANY OR ITS SUBSIDIARIES PERCENT OF TOTAL OPTION
FROM THE OPTION GRANT DATE THAT IS EXERCISABLE
- -------------------------------------------- -----------------------
<S> <C>
After 1 year........................ 25%
After 2 years....................... 50%
After 3 years....................... 75%
After 4 years....................... 100%
</TABLE>
Unless the Plan Administrator determines otherwise, the vesting schedule of an
Option shall be adjusted proportionately to the extent a Holder's hours of
employment or service are reduced after the date of grant.
To the extent that the right to purchase shares has accrued thereunder,
an Option may be exercised from time to time by written notice to the Company,
in accordance with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Option is being exercised
and accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 10 shares at any one time (or the lesser number of remaining shares
covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check, or, unless the Plan Administrator at any time
determines otherwise, a combination of cash and/or check and one or both of the
following alternative forms: (a) tendering (either actually or, if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) Common Stock already owned by the Holder for at least six
months (or any shorter period necessary to avoid a charge to the Company's
earnings for financial reporting purposes) having a Fair Market Value on the day
prior to the exercise date equal to the aggregate Option exercise price or (b)
if and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions, to (i) a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise and (ii) the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board. In addition, to the extent
permitted by the Plan Administrator in its sole discretion, the exercise price
for shares purchased under an Option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized by
this Section 7.5, by (y) a promissory note delivered pursuant to Section 9; or
(z) such other consideration as the Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other than
by reason of death or Cause, the Option shall be exercisable, to the extent of
the number of shares purchasable by the Holder at the
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date of such termination, only (a) within one year if the termination of the
Holder's employment or services is coincident with Retirement, Early Retirement
at the Company's request or Disability or (b) within three months after the date
the Holder ceases to be an employee, consultant, agent, advisor or independent
contractor of the Company or a Subsidiary if termination of the Holder's
employment or services is for any reason other than Retirement, Early Retirement
at the Company's request or Disability, but in no event later than the remaining
term of the Option. Any Option exercisable at the time of the Holder's death may
be exercised, to the extent of the number of shares purchasable by the Holder at
the date of the Holder's death, by the personal representative of the Holder's
estate, the person (s) to whom the Holder's rights under the Award have passed
by will or the applicable laws of descent and distribution or the beneficiary
designated pursuant to Section 10 at any time or from time to time within one
year after the date of death, but in no event later than the remaining term of
the Option. Any portion of an Option that is not exercisable on the date of
termination of the Holder's employment or services shall terminate on such date,
unless the Plan Administrator determines otherwise. In case of termination of
the Holder's employment or services for Cause, the Option shall automatically
terminate upon first notification to the Holder of such termination, unless the
Plan Administrator determines otherwise. If a Holder's employment or services
with the Company are suspended pending an investigation of whether the Holder
shall be terminated for Cause, all the Holder's rights under any Option likewise
shall be suspended during the period of investigation.
A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a Company-approved leave of absence on the terms and
conditions of an option shall be determined by the Plan Administrator, in its
sole discretion.
SECTION 8. STOCK AWARDS
8.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock on
such terms and conditions and subject to such restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals as the Plan Administrator shall determine, in its sole discretion, which
terms, conditions and restrictions shall be set forth in the instrument
evidencing the Award. The terms, conditions and restrictions that the Plan
Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions and the circumstances under which
forfeiture of Restricted Stock shall occur by reason of termination of the
Holder's services.
8.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Holder's release from any
terms, conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall deliver, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, a stock certificate for the
appropriate number of shares of Common Stock.
8.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
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<PAGE> 8
SECTION 9. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist a Holder in acquiring shares of Common Stock pursuant to an
Award granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Award, (a) the extension of a loan to the Holder by
the Company, (b) the payment by the Holder of the purchase price, if any, of the
Common Stock in installments, or (c) the guarantee by the Company of a loan
obtained by the grantee from a third party. The terms of any loans, installment
payments or loan guarantees, including the interest rate and terms of and
security for repayment, will be subject to the Plan Administrator's discretion.
Loans, installment payments and loan guarantees may be granted with or without
security. The maximum credit available is the purchase price, if any, of the
Common Stock acquired, plus the maximum federal and state income and employment
tax liability that may be incurred in connection with the acquisition.
SECTION 10. ASSIGNABILITY
No Option granted under the Plan may be assigned or transferred by the
Holder other than by will or by the laws of descent and distribution, and,
during the Holder's lifetime, such Awards may be exercised only by the Holder or
a permitted assignee or transferee of the Holder (as provided below).
Notwithstanding the foregoing, the Plan Administrator, in its sole discretion,
may permit such assignment, transfer and exercisability and may permit a Holder
of such Awards to designate a beneficiary who may exercise the Award or receive
compensation under the Award after the Holder's death; provided, however, that
any Award so assigned or transferred shall be subject to all the same terms and
conditions contained in the instrument evidencing the Award.
SECTION 11. ADJUSTMENTS
11.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend or other change in the Company's corporate or capital structure results
in (a) the outstanding shares, or any securities exchanged therefor or received
in their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and class of
securities subject to the Plan as set forth in Section 4.1 and (ii) the number
and class of securities that are subject to any outstanding Award and the per
share price of such securities, without any change in the aggregate price to be
paid therefor. The determination by the Plan Administrator as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
11.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the Award,
in the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested, except that such acceleration will not occur if, in the
opinion of the Company's accountants, it would render unavailable "pooling of
interest" accounting for a Corporate Transaction that would otherwise qualify
for such accounting treatment. Such Award shall not so accelerate, however, if
and to the extent that such Award is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
(the "Successor Corporation") or to be replaced with a comparable award for the
purchase of shares of the capital stock of the Successor Corporation or (b) such
Award is to be replaced with
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<PAGE> 9
a cash incentive program of the Successor Corporation that preserves the spread
existing at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same vesting schedule applicable to such Award.
The determination of Award comparability above shall be made by the Plan
Administrator, and its determination shall be conclusive and binding. All such
Awards shall terminate and cease to remain outstanding immediately following the
consummation of the Corporate Transaction, except to the extent assumed by the
Successor Corporation.
11.3 FURTHER ADJUSTMENT OF AWARDS
Subject to Section 11.2, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Holders, with respect to
Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Holders, to
certain categories of Holders or only to individual Holders. The Plan
Administrator may take such action before or after granting Awards to which the
action relates and before or after any public announcement with respect to such
sale, merger, consolidation, reorganization, liquidation or change in control
that is the reason for such action.
11.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 12. WITHHOLDING
The Company may require a Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant or exercise of any Award. Subject to the Plan and applicable law, the Plan
Administrator, in its sole discretion, may permit the Holder to satisfy
withholding obligations, in whole or in part, by electing to have the Company
withhold shares of Common Stock or by transferring shares of Common Stock to the
Company, in such amounts as are equivalent to the Fair Market Value of the
withholding obligation. The Company shall have the right to withhold from any
Award or any shares of Common Stock issuable pursuant to an Award or from any
cash amounts otherwise due or to become due from the Company to the Holder an
amount equal to such taxes. The Company may also deduct from any Award any other
amounts due from the Holder to the Company or a Subsidiary.
SECTION 13. AMENDMENT AND TERMINATION OF PLAN
13.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board as it shall deem advisable.
13.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date.
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13.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent
of the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan.
SECTION 14. GENERAL
14.1 AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
14.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
None of the Plan, participation in the Plan as a Holder or any action of
the Plan Administrator taken under the Plan shall be construed as giving any
Holder or employee of the Company any right to be retained in the employ of the
Company or limit the Company's right to terminate the employment or services of
the Holder.
14.3 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Holder to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
14.4 NO RIGHTS AS A SHAREHOLDER
No Award shall entitle the Holder to any cash dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Award, free of all applicable
restrictions.
14.5 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Holder, and no Holder shall
have any rights that are greater than those of a general unsecured creditor of
the Company.
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14.6 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 15. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board.
Adopted by the Board on July 16, 1997.
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