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EXHIBIT 4.1
BOCA RESEARCH, INC.
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The purpose of this 1996 Non-Employee Director Stock Option Plan (the
"Plan") is to promote the interests of Boca Research, Inc. (the "Company") by
providing an inducement to attract and retain the services of qualified persons
who are not employees or officers of the Company to serve as members of its
Board of Directors.
2. SHARES SUBJECT TO THE PLAN.
The total number of the authorized but unissued shares of common stock,
par value $.01 per share, of the Company (the "Common Stock") for which options
may be granted under the Plan shall not exceed 200,000 in the aggregate, subject
to adjustment in accordance with Section 9 hereof.
3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors (the "Board") or
by a committee appointed by the Board (the "Committee"). In the event the Board
fails to appoint or refrains from appointing a Committee, the Board shall have
all power and authority to administer the Plan. In such event, the word
Committee wherever used herein shall be deemed to mean the Board. The Committee
shall, subject to the provisions of the Plan, have the power to construe this
Plan, to determine all questions hereunder, and to adopt and amend such rules
and regulations for the administration of the Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
4. AUTOMATIC GRANT OF OPTIONS.
Subject to the availability of shares of Common Stock under the Plan, (i)
on the date on which this Plan is approved by the Company's shareholders, each
member of the Board who is not an employee or officer of the Company on such
date shall be automatically granted an option to purchase 15,000 shares of
Common Stock, and (ii) each person who is initially elected as a member of the
Board after the approval of this Plan by the Company's shareholders and who is
not an employee or officer of the Company shall be automatically granted an
option to purchase 15,000 shares of Common Stock, upon his or her initial
election to the Board. The options to be granted under this Section 4 shall be
the only options ever to be granted at any time to such member under the Plan.
Except for the specific options referred to above, no other options shall
be granted under the Plan.
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5. OPTION AGREEMENT.
Each option granted under the Plan shall be evidenced by an option
agreement (the "Agreement") duly executed on behalf of the Company and by the
director to whom such option is granted, which Agreement shall (i) comply with
and be subject to the terms and conditions of the Plan and (ii) provide that the
optionee agrees to continue to serve as a director of the Company during the
term for which he was elected.
6. OPTION EXERCISE PRICE.
Subject to the provisions of Section 9 hereof, the option exercise price
for an option granted under the Plan shall be the fair market value of the
shares of Common Stock covered by the option on the date of grant of the option.
If such shares are then listed on any national securities exchange, the fair
market value shall be the mean between the high and low sales prices, if any, on
such exchange on the business day immediately preceding the date of the grant of
the option or, if none, shall be determined by taking a weighted average of the
means between the highest and lowest sales prices on the nearest date before and
the nearest date after the date of grant. If the shares are not then listed on
any such exchange, the fair market value of such shares shall be the mean
between the high and low sales prices, if any, as reported in the National
Association of Securities Dealers Automated Quotation System National Market
System ("NASDAQ/NMS") for the business day immediately preceding the date of the
grant of the option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales on the nearest date
before and the nearest date after the date of grant. If the shares are not then
either listed on any such exchange or quoted in NASDAQ/NMS, the fair market
value shall be the mean between the average of the "Bid" and the average of the
"Ask" prices, if any, as reported in the National Daily Quotation Service for
the business day immediately preceding the date of the grant of the option, or,
if none, shall be determined by taking a weighted average of the means between
the highest and lowest sales prices on the nearest date before and the nearest
date after the date of grant. If the fair market value cannot be determined
under the preceding three sentences, it shall be determined in good faith by the
Committee.
7. VESTING OF SHARES AND NON-TRANSFERABILITY OF OPTIONS.
(a) VESTING. Options granted under the Plan shall not be
exercisable until they become vested. Options granted under the Plan shall vest
in the optionee and thus become exercisable, in accordance with the following
schedules provided that the optionee has continuously served as a member of the
Board through such vesting date:
<TABLE>
<CAPTION>
Cumulative Number of
Shares for which Option
will be Exercisable Date of Vesting
<S> <C>
5,000 On the first anniversary of the date of grant
10,000 On the second anniversary of the date of grant
15,000 On the third anniversary of the date of grant
</TABLE>
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(b) EXERCISE. To the extent that the right to exercise an option
has accrued and is in effect, the option may be exercised in full at one time or
in part from time to time by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares of
Common Stock with respect to which the option is being exercised, accompanied by
payment in full for such shares, which payment may be in cash or in whole or in
part in shares of Common Stock already owned for a period of at least six months
by the person or persons exercising the option, valued at fair market value, as
determined under Section 6 hereof, on the date of exercise; provided, however,
that there shall be no such exercise at any one time as to fewer than two
hundred fifty (250) shares or all of the remaining shares then purchaseable by
the person or persons exercising the option, if fewer than two hundred fifty
(250) shares. Upon such exercise, delivery of a certificate for paid-up
non-assessable shares shall be made at the principal office of the Company to
the person or persons exercising the option at such time, during ordinary
business hours, not more than thirty (30) days from the date of receipt of the
notice by the Company, as shall be designated in such notice, or at such time,
place and manner as may be agreed upon by the Company and the person or persons
exercising the option.
(c) LEGEND ON CERTIFICATES. The certificates representing such
shares shall carry such appropriate legend, and such written instructions shall
be given to the Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933 or any state securities laws.
(d) NON-TRANSFERABILITY. Any option granted pursuant to the Plan
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order, as
defined by the Internal Revenue Code of 1986, as amended (the "Code"), or Title
I of the Employment Retirement Security Income Act, or the rules thereunder, and
shall be exercisable during the optionee's lifetime only by him or her.
8. TERM OF OPTIONS.
(a) Each option shall expire ten (10) years from the date of the
granting thereof, but shall be subject to earlier termination as herein
provided.
(b) Except as otherwise provided in this Section 8, in the
event that an optionee ceases to be a director of the Company, the option
granted to such optionee may be exercised by him, but only to the extent that
under Section 6 hereof the right to exercise the option has accrued and is in
effect. Such option may be exercised at any time within thirty (30) days
after the date such optionee ceases to be a director of the Company, at which
time the option shall terminate, or prior to the date on which the option
expires by its terms, whichever is earlier.
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(c) If the optionee ceases to be a director of the Company
because the optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), the option granted to such optionee may be
exercised by the optionee, to the extent the optionee was entitled to do so on
the date such optionee ceases to be a director. Such option may be exercised at
any time within six months after the date the optionee ceases to be a director,
at which time the option shall terminate, or prior to the date on which the
option otherwise expires by its terms, whichever is earlier.
(d) In the event of the death of an optionee, the option granted
to such optionee may be exercised, to the extent the optionee was entitled to do
so on the date of such optionee's death, by the estate of such optionee or by
any person or persons who acquired the right to exercise such option by bequest
or inheritance or otherwise by reason of the death of such optionee. Such option
may be exercised at any time within one (1) year after the date of death of such
optionee, at which time the option shall terminate, or prior to the date on
which the option otherwise expires by its terms, whichever is earlier.
9. ADJUSTMENTS.
Upon the occurrence of any of the following events, an optionee's rights
with respect to options granted to him or her hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in the written
agreement between the optionee and the Company relating to such option:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"), the
Committee or the board of directors of any entity assuming the obligations of
the Company hereunder (the "Successor Board"), shall, as to outstanding options,
either (i) make appropriate provision for the continuation of such options by
substituting on an equitable basis for the shares then subject to such options
the consideration payable with respect to the outstanding shares of Common Stock
in connection with the Acquisition; or (ii) upon written notice to the
optionees, provide that all options must be exercised, to the extent then
exercisable, within a specified number of days of the date of such notice, at
the end of which period the options shall terminate; or (iii) terminate all
options in exchange for a cash payment equal to the excess of the fair market
value of the shares subject to such options (to the extent then exercisable)
over the exercise price thereof.
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(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (b) above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an option shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised his option prior to such recapitalization or
reorganization.
(d) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.
(e) ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to options. No adjustments shall be made for dividends paid in
cash or in property other than securities of the Company.
(f) FRACTIONAL SHARES. No fractional shares shall be issued
under the Plan and the optionee shall receive from the Company cash in lieu of
such fractional shares.
(g) ADJUSTMENTS. Upon the happening of any of the events
described in subparagraphs (a), (b) or (c) above, the class and aggregate number
of shares set forth in Section 2 hereof that are subject to options which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 9 and, subject to Section 3, its determination
shall be conclusive.
10. RESTRICTIONS ON ISSUE OF SHARES.
Notwithstanding the provisions of Section 7 hereof, the Company may delay
the issuance of shares of Common Stock covered by the exercise of any option and
the delivery of a certificate for such shares until one of the following
conditions shall be satisfied:
(i) the shares with respect to which an option has been
exercised are at the time of the issue of such shares effectively registered
under applicable Federal and state securities acts now in force or hereafter
amended; or
(ii) counsel for the Company shall have given an opinion,
which opinion shall not be unreasonably conditioned or withheld, that such
shares are exempt from registration under applicable Federal and state
securities acts now in force or hereafter amended.
It is intended that all exercises of options shall be effective.
Accordingly, the Company shall use its best efforts to bring about compliance
with the above conditions within a reasonable time, except that the Company
shall be under no obligation to cause a registration statement or a
post-effective amendment to any registration statement to be prepared at its
expense solely for the purpose of covering the issue of shares in respect of
which any option may be exercised, except as otherwise agreed to by the
Company in writing.
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11. RIGHTS OF HOLDER ON PURCHASE FOR INVESTMENT; SUBSEQUENT
REGISTRATION.
Unless the shares of Common Stock to be issued upon exercise of an option
granted under the Plan have been effectively registered under the Securities Act
of 1933, as now in force or hereafter amended, the Company shall be under no
obligation to issue any shares covered by any option unless the person who
exercises such option, in whole or in part, shall give a written representation
and undertaking to the Company which is satisfactory in form and scope to
counsel to the Company and upon which, in the opinion of such counsel, the
Company may reasonably rely, that he is acquiring the shares issued to him
pursuant to such exercise of the option for his own account as an investment and
not with a view to, or for sale in connection with, the distribution of any such
shares, and that he will make no transfer of the same except in compliance with
any rules and regulations in force at the time of such transfer under the
Securities Act of 1933, or any other applicable law, and that if shares are
issued without such registration a legend to this effect may be endorsed upon
the securities so issued. In the event that the Company shall, nevertheless,
deem it necessary or desirable to register under the Securities Act of 1933 or
other applicable statutes any shares with respect to which an option shall have
been exercised, or to qualify any such shares for exemption from the Securities
Act of 1933 or other applicable statutes, then the Company shall take such
action at its own expense and may require from each optionee such information in
writing for use in any registration statement, prospectus, preliminary
prospectus or offering circular as is reasonably necessary for such purpose and
may require reasonable indemnity to the Company and its officers and directors
from such holder against all losses, claims, damages and liabilities arising
from such use of the information so furnished and caused by any untrue statement
of any material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
12. LOANS PROHIBITED.
The Company shall not, directly or indirectly, lend money to an optionee
or to any person or persons entitled to exercise an option by reason of the
death of an optionee for the purpose of assisting him or them in the acquisition
of shares covered by an option granted under the Plan.
13. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to approval by the vote of shareholders holding
at least a majority of the voting stock of the Company voting in person or by
proxy at a duly held shareholders' meeting, or by written consent of the
shareholders holding at least a majority of the voting stock of the Company, and
shall take effect immediately as of its date of adoption upon such approval.
14. TERMINATION AND AMENDMENT OF PLAN.
Unless sooner terminated as herein provided, the Plan shall terminate ten
(10) years from the date upon which the Plan was duly approved by the
shareholders. The Board may at any time terminate the Plan or make such
modification or amendment thereof as it deems advisable,
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provided however that, except as provided in Section 9 hereof, no modification
or amendment to the provisions of the Plan may be made more than once every six
(6) months other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or the rules thereunder, if the effect of such
amendment or modification would be to change (i) the requirements for
eligibility under the Plan, (ii) the timing of the grants of options to be
granted under the Plan or the exercise price or vesting schedule thereof, or
(iii) the number of shares subject to options to be granted under the Plan
either in the aggregate or to one director or clerk. Any amendment to the
provisions of the Plan which (i) materially increases the number of shares which
may be subject to options granted under the Plan, (ii) materially increases the
benefits accruing to optionees under the Plan, or (iii) materially modifies the
requirement for eligibility to participate in the Plan, shall be subject to
approval by the shareholders of the Company obtained in the manner stated in
Section 13 hereof. Termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his rights under an option
previously granted to him.
15. LIMITATION OF RIGHTS IN THE OPTION SHARES.
An optionee shall not be deemed for any purpose to be a shareholder of
the Company with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the optionee.
16. NOTICES.
Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business,
attention: President, and, if to an optionee, to the address as appearing on the
records of the Company.
17. COMPLIANCE WITH RULE 16b-3.
It is the intention of the Company that the Plan comply in all respects
with Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act
of 1934 (the "Act") and that optionees remain disinterested persons for purposes
of administering other employee benefit plans of the Company and having
transactions under such other plans be exempt from Section 16(b) of the Act.
Therefore, if any Plan provision is found not to be in compliance with Rule
16b-3 or if any Plan provisions would disqualify optionees from remaining
disinterested persons, that provisions 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.
