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EXHIBIT 10.3
ZIXIT CORPORATION
1995 LONG-TERM INCENTIVE PLAN
(AMENDED AND RESTATED AS OF SEPTEMBER 20, 2000)
Section 1. PURPOSE
The purpose of the ZixIt Corporation 1995 Long-Term Incentive Plan
(hereinafter called the "Plan") is to advance the interests of ZixIt Corporation
(hereinafter called the "Company") by strengthening the ability of the Company
to attract, on its behalf and on behalf of its Subsidiaries (as hereinafter
defined), and retain personnel of high caliber through encouraging a sense of
proprietorship by means of stock ownership.
Section 2. DEFINITIONS
"Board of Directors" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time-to-time.
"Committee" shall mean a committee of the Board of Directors comprised of at
least two directors or the entire Board of Directors, as the case may be.
Members of the Committee shall be selected by the Board of Directors. To the
extent necessary to comply with the requirements of Rule 16b-3, the Committee
shall consist of two or more Non-employee Directors. Also, if the requirements
of Section 162(m) of the Code are intended to be met, the Committee shall
consist of two or more "outside directors" within the meaning of Section 162(m)
of the Code.
"Common Stock" shall mean the Common Stock of the Company, par value $.01 per
share.
"Date of Grant" shall mean the date on which an Option is granted pursuant to
this Plan.
"Designated Beneficiary" shall mean the beneficiary designated by the
Participant, in a manner determined by the Committee, to receive amounts due the
Participant in the event of the Participant's death. In the absence of an
effective designation by the Participant, Designated Beneficiary shall mean the
Participant's estate.
"Effective Date" shall mean the first business day following the date of the
1995 annual meeting of the shareholders of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean the closing sale price (or average of the quoted
closing bid and asked prices if there is no closing sale price reported) of the
Common Stock on the date specified as reported by the Nasdaq National Market, or
by the principal national stock exchange on which the Common Stock is then
listed. If there is no reported price information for such date, the Fair Market
Value will be determined by the reported price information for Common Stock on
the day nearest preceding such date.
"Incentive Stock Option" shall mean a stock option granted under Section 6 that
is intended to meet the requirements of Section 422 of the Code (or any
successor provision).
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"Non-employee Director" shall have the meaning given such term in Rule 16b-3.
"Nonqualified Stock Option" shall mean a stock option granted under Section 6
that is not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Nonqualified Stock Option.
"Optionee" shall mean the person to whom an option is granted under the Plan or
who has obtained the right to exercise an option in accordance with the
provisions of the Plan.
"Plan Adoption Date" means the later of the date on which the Plan is adopted by
the Board of Directors of the Company and by the shareholders of the Company in
accordance with Rule 16b-3.
"Rule 16b-3" shall mean Rule 16b-3 of the rules and regulations under the
Exchange Act as it may be amended from time-to-time and any successor provision
to Rule 16b-3 under the Exchange Act.
"Subsidiary" shall mean any now existing or hereafter organized or acquired
corporation or other entity of which more than fifty percent (50%) of the issued
and outstanding voting stock or other economic interest is owned or controlled
directly or indirectly by the Company or through one or more Subsidiaries of the
Company.
Section 3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have sole
and complete authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time-to-time deem advisable, and to construe, interpret, and administer the
terms and provisions of the Plan and the agreements thereunder. The
determinations and interpretations made by the Committee are final and
conclusive.
Section 4. ELIGIBILITY
All employees and non-employee consultants and advisors, in each case, who, in
the opinion of the Committee, in each case, have the capacity for contributing
in a substantial measure to the successful performance of the Company are
eligible to receive Options under the Plan.
Section 5. MAXIMUM AMOUNT AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Common Stock in respect of which
Options may be made under the Plan shall be a total of 1,825,000 shares of
Common Stock. Of that amount, no participant may be granted Options for more
than 400,000 shares of Common Stock in the aggregate during the term of the
Plan. Options that expire, lapse, or are cancelled or forfeited nonetheless
continue to count against the 400,000 share limit. Shares of Common Stock may be
made available from the authorized but unissued shares of the Company or from
shares reacquired by the Company, including shares purchased in the open market.
In the event that an Option is terminated unexercised as to any shares of Common
Stock covered thereby such shares shall thereafter be again available for award
pursuant to the Plan.
(b) In the event that the Committee shall determine that any stock
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value, or other
similar
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corporate event affects the Common Stock such that an adjustment is required in
order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall adjust appropriately any or
all of (1) the number and kind of shares which thereafter may be optioned under
the Plan and (2) the grant, exercise or conversion price and/or number of shares
with respect to the Options and/or, if deemed appropriate, make provision for
cash payment to a Participant; provided, however, that the number of shares
subject to any Option shall always be a whole number.
Section 6. STOCK OPTIONS
(a) Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Participants to whom Options shall
be granted, the number of shares to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option.
(b) The Committee shall have the authority to grant Incentive Stock
Options, or to grant Nonqualified Stock Options, or to grant both types of
options. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with the Code and relevant
regulations. Incentive Stock Options to purchase Common Stock may be granted to
such employees of the Company or its Subsidiaries (including any director who is
also an employee of the Company or one of its Subsidiaries) as shall be
determined by the Committee. Nonqualified Stock Options to purchase Common Stock
may be granted to such eligible participants as shall be determined by the
Committee. Neither the Company nor any of its Subsidiaries or any of their
respective directors, officers or employees, shall be liable to any Optionee or
other person if it is determined for any reason by the Internal Revenue Service
or any court having jurisdiction that any Incentive Stock Option granted
hereunder does not qualify for tax treatment as an Incentive Stock Option under
the then applicable provisions of the Code.
(c) The Committee shall, in its discretion, establish the exercise
price at the time each Option is granted, which in the case of Nonqualified
Stock Options shall not be less than 100% of the Fair Market Value of the Common
Stock on the Date of Grant, or in the case of grants of Incentive Stock Options,
shall not be less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant or such greater amount as may be prescribed by the Code.
(d) Exercise
(1) Each Option shall be exercisable at such times and subject
to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable grant or thereafter; provided,
however, that in no event may any Option granted hereunder be
exercisable after the expiration of ten years from the date of grant.
The Committee may impose such conditions with respect to the exercise
of Options, including without limitation, any relating to the
application of federal or state securities laws, as it may deem
necessary or advisable.
(2) No shares shall be delivered pursuant to any exercise of
an Option until payment in full of the option price therefore is
received by the Company. Such payment may be made in cash, or its
equivalent, or, if and to the extent permitted by the Committee, by
exchanging shares of Common Stock owned by the Optionee (which are not
the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all
cash and cash equivalents and the Fair Market Value of any such Common
Stock so tendered to the Company, valued as of the date of such tender,
is at least equal to such option price.
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If the shares to be purchased are covered by an effective
registration statement under the Securities Act of 1933, as amended,
any Option may be exercised by a broker-dealer acting on behalf of an
Optionee if (a) the broker-dealer has received from the Optionee
instructions signed by the Optionee requesting the Company to deliver
the shares of Common Stock subject to such option to the broker-dealer
on behalf of the Optionee and specifying the account into which such
shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise,
and (c) the broker-dealer and the Optionee have otherwise complied with
Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor
provision.
(3) The Company, in its sole discretion, may lend money to an
Optionee, guarantee a loan to an Optionee or otherwise assist an
Optionee to obtain the cash necessary to exercise all or any portion of
an Option granted under the Plan.
(4) The Company shall not be required to issue any fractional
shares upon the exercise of any Options granted under this Plan. No
Optionee nor an Optionee's legal representatives, legatees or
distributees, as the case may be, will be, or will be deemed to be, a
holder of any shares subject to an option unless and until said option
has been exercised and the purchase price of the shares in respect of
which the option has been exercised has been paid. Unless otherwise
provided in the agreement applicable thereto, an Option shall not be
exercisable except by the Optionee or by a person who has obtained the
Optionee's rights under the Option by will or under the laws of descent
and distribution or pursuant to a "qualified domestic relations order"
as defined in the Code.
(5) Any Common Stock issued to a person subject to the
provisions of Section 16(b) of the Exchange Act, as interpreted by the
rules, regulations, and interpretations of the Securities and Exchange
Commission thereunder, pursuant to the exercise of an Option granted
under this Plan and intended to comply with the requirements of Rule
16b-3 shall not be transferred until at least 6 months have elapsed
from the later of (i) the date of grant of such Option or (ii) the Plan
Adoption Date to the date of disposition of the Common Stock underlying
such option.
(e) No Incentive Stock Options granted pursuant to this Section 6 shall
be exercisable (a) more than five years (or such other period of time as from
time-to-time provided in the then-applicable provisions of the Code governing
Incentive Stock Options) after the Date of Grant with respect to an Optionee who
owns 10-Percent or more of the outstanding Common Stock (within the meaning of
the Code), and (b) more than ten years after the Date of Grant with respect to
all other Optionees. No Nonqualified Stock Options shall be exercisable more
than ten years after the Date of Grant.
(f) In no event shall any Option granted to any employee who is
classified as "non-exempt" under the Fair Labor Standards Act of 1938 be
exercisable less than six months after the date of grant, except in the case of
death, disability, retirement, a change in control or other circumstances
permitted by regulations under the Worker Economic Opportunity Act ("WEOA").
Grants to such non-exempt employees shall not be based on preestablished
performance criteria, except as specifically permitted under the WEOA.
Non-exempt employees shall be notified of the terms of their Options in
accordance with the WEOA, and exercise of such Options must be voluntary.
Section 7. GENERAL PROVISIONS
(a) The Company and its Subsidiaries shall have the right to deduct
from all amounts paid to a Participant in cash (whether under the Plan or
otherwise) any taxes required by law to be withheld in respect
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of Option exercises under the Plan. However, if permitted by the Committee or
under the terms of the applicable agreement, the Participant may pay all or any
portion of the taxes required to be withheld by the Employer or paid by the
Participant with respect to such Common Stock by electing to have the Employer
withhold shares of Common Stock, or by delivering previously owned shares of
Common Stock, having a Fair Market Value equal to the amount required to be
withheld or paid. The Participant must make the foregoing election on or before
the date that the amount of tax to be withheld is determined ("Tax Date"). Any
such election is irrevocable and subject to disapproval by the Committee. If the
Participant is subject to the short-swing profits recapture provisions of
Section 16(b) of the Exchange Act, then the applicable agreement shall not
provide the Participant an election, or, if it does, any such election shall be
subject to the restrictions imposed by Rule 16b-3.
(b) Each Option hereunder shall be evidenced in writing, delivered to
the Participant, and shall specify the terms and conditions thereof and any
rules applicable thereto, including but not limited to the effect on such Option
of the death, retirement, disability or other termination of employment of the
Participant and the effect thereon, if any, of a change in control of the
Company.
(c) Unless otherwise provided in the agreement applicable thereto, no
Option shall be assignable or transferable except by will or under the laws of
descent and distribution or pursuant to a "qualified domestic relations order"
as defined in the Code, and no right or interest of any Participant shall be
subject to any lien, obligation or liability of the Participant.
(d) No person shall have any claim or right to be granted an Option.
Further, the Company and its Subsidiaries expressly reserve the right at any
time to dismiss a Participant free from any liability, or any claim under the
Plan, except as provided herein or in any agreement entered into with respect to
an Option. Neither the Plan nor any Option granted hereunder is intended to
confer upon any Participant any rights with respect to continuance of employment
or other utilization of his or her services by the Company or by a Subsidiary,
nor to interfere in any way with his or her right or that of his or her employer
to terminate his or her employment or other services at any time (subject to the
terms of any applicable contract). The conditions to apply to the exercise of an
Option in the event an Participant ceases to be employed by the Company or a
Subsidiary for any reason shall be determined by the Committee, and such
conditions shall be specified in the written agreement evidencing the Option.
(e) Subject to the provisions of the applicable Option, no Participant
or Designated Beneficiary shall have any rights as a stockholder with respect to
any shares of Common Stock to be distributed under the Plan until he or she has
become the holder thereof.
(f) The validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of
Texas (without giving effect to its conflicts of laws rules) and, to the extent
applicable, federal law.
(g) The Plan was originally effective on April 21, 1995. No Options may
be granted under the Plan after April 20, 2005; however, all previous Options
issued that have not expired under their original terms or will not then expire
at the time the Plan expires will remain outstanding.
(h) Restrictions on Issuance of Shares
(1) The Company shall not be obligated to sell or issue any
Shares upon the exercise of any Option granted under the Plan unless:
(i) the shares pertaining to such Option have been registered under
applicable federal and state securities laws or are exempt from such
registration;
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(ii) the prior approval of such sale or issuance has been obtained from
any state regulatory body having jurisdiction; and (iii) in the event
the Common Stock has been listed on any exchange, the shares pertaining
to such Option have been duly listed on such exchange in accordance
with the procedure specified therefor. The Company shall be under no
obligation to effect or obtain any listing, registration,
qualification, consent or approval with respect to shares pertaining to
any Option granted under the Plan. If the shares to be issued upon the
exercise of any Option granted under the Plan are intended to be issued
by the Company in reliance upon the exemptions from the registration
requirements of applicable federal and state securities laws, the
recipient of the Option, if so requested by the Company, shall furnish
to the Company such evidence and representations, including an opinion
of counsel, satisfactory to it, as the Company may reasonably request.
(2) The Company shall not be liable for damages due to a delay
in the delivery or issuance of any stock certificates for any reason
whatsoever, including, but not limited to, a delay caused by listing,
registration or qualification of the shares of Common Stock pertaining
to any Option granted under the Plan upon any securities exchange or
under any federal or state law or the effecting or obtaining of any
consent or approval of any governmental body.
(i) The Board of Directors or Committee may impose such other
restrictions on the ownership and transfer of shares issued pursuant to this
Plan as it deems desirable; any such restrictions shall be set forth in the
applicable agreement.
(j) The Board of Directors may amend, abandon, suspend or terminate the
Plan or any portion thereof at any time in such respects as it may deem
advisable in its sole discretion, provided that no amendment shall be made
without stockholder approval (including an increase in the maximum number of
shares of Common Stock in respect of which Options may be made under the Plan)
if such stockholder approval is necessary to comply with any tax or regulatory
requirement or exchange listing rules, including for these purposes any approval
requirement that is a prerequisite for exemptive relief under Section 16(b) of
the Act.
(k) In order to preserve a Participant's rights under an Option in the
event of a change in control of the Company, the Committee in its discretion
may, at the time an Option is made or any time thereafter, take one or more of
the following actions: (i) provide for the acceleration of any time period
relating to the exercise of the Option, (ii) provide for the purchase of the
Option upon the Participant's request for an amount of cash or other property
that could have been received upon the exercise or realization of the Option had
the Option been currently exercisable or payable, (iii) adjust the terms of the
Option in a manner determined by the Committee to reflect the change in control,
(iv) cause the Option to be assumed, or new rights substituted therefor, by
another entity, or (v) make such other provision as the Committee may consider
equitable and in the best interests of the Company.
AMENDED AND RESTATED as of September 20, 2000.
ZIXIT CORPORATION
By: /s/ RONALD A. WOESSNER
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Its: V.P.
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