Exhibit 10(a)
ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC.
1993 EMPLOYEE STOCK OPTION PLAN
1. Purposes of Plan. The purposes of this Plan, which
shall be known as the Electronic Retailing Systems International,
Inc. 1993 Employee Stock Option Plan, and is hereinafter referred
to as the "Plan", are (i) to provide incentives for key employees
of Electronic Retailing Systems International, Inc. (the "Company")
and any parent and subsidiary corporations (within the respective
meanings of Sections 424(e) and 424(f) of the Internal Revenue Code
of 1986, as amended [the "Code"], and referred to herein as
"Parent" and "Subsidiary", respectively), and to consultants and
other individuals providing services to such companies, by
encouraging their ownership of the common stock, $.01 par value
(the "Common Stock"), of the Company, and (ii) to aid the Company
in retaining such key employees and other persons, upon whose
efforts the Company's success and future growth depends, and
attracting other such employees and other persons.
2. Administration. The Plan shall be administered by
the Board of Directors of the Company or, as determined by the
Board of Directors in its sole discretion, by a committee from time
to time appointed by the Board of Directors and consisting of not
less than two of its members (the Board of Directors, or such
committee, for purposes of this Plan hereinafter referred to as the
"Committee"), as hereinafter provided. Subject to the terms of the
Plan, the Committee shall have plenary authority to determine the
key employees, consultants and other individuals to whom options
are to be granted under the Plan, the number of shares to be
subject to each such option, the terms and conditions upon which
the options are granted and are exercisable and whether such
options will be incentive stock options or non-qualified stock
options. For purposes of administration, the Committee, subject to
the terms of the Plan, shall have plenary authority to establish
such rules and regulations, make such determinations and
interpretations and take such other administrative actions as it
deems necessary or advisable. All determinations and
interpretations made by the Committee shall be final, conclusive
and binding on all persons, including Optionees (as hereinafter
defined) and their legal representatives and beneficiaries.
The Board of Directors shall designate one of the members
of the Committee as its Chairman. The Committee shall hold its
meetings at such times and at such places as it may determine. A
majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and
signed by all members shall be as effective as if it had been made
by a majority vote at a meeting duly called and held. The Committee
may appoint a secretary (who need not be a member of the
Committee). No member of the Committee shall be liable for any act
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or omission with respect to his service on the Committee if he acts
in good faith and in a manner he reasonably believes to be in or
not opposed to the best interests of the Company. Service on the
Committee shall constitute service as a director of the Company for
all purposes.
3. Stock Available for Options. There shall be
available for options under the Plan a total of 4,500,000 shares of
Common Stock, subject to any adjustments which may be made pursuant
to Section 5(f) hereof. Shares of Common Stock used for purposes of
the Plan may be either authorized and unissued shares, or
previously issued shares held in the treasury of the Company, or
both. Shares of Common Stock covered by options which have
terminated or expired prior to exercise shall be available for
further options hereunder.
4. Eligibility. Options under the Plan may be granted
to key employees of the Company or any Parent or Subsidiary
thereof, including officers of the Company or any Parent or
Subsidiary thereof, and to consultants and other individuals
providing services to the Company or any Parent or Subsidiary.
Options may not be granted under the Plan to any member of the
Board of Directors of the Company (whether or not a key employee
of, or a consultant or other individual providing services to, the
Company or any Parent or Subsidiary). Options may be granted to
eligible individuals whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed
by the Company. In selecting individuals for options, the Committee
may take into consideration any factors it may deem relevant,
including its estimate of the individual's present and potential
contributions to the success of the Company and/or any Parent or
Subsidiary thereof. Service as a consultant of or to the Company or
any Parent or Subsidiary shall be considered employment for
purposes of the Plan (and the period of such service shall be
considered the period of employment for purposes of Section 5(d) of
the Plan); provided, however, that incentive stock options may be
granted under the Plan only to an individual who is an "employee"
(as such term is used in Section 422 of the Code) of the Company or
any Subsidiary or Parent.
5. Terms and Conditions of Options. The Committee
shall, in its discretion, prescribe the terms and conditions of
the options to be granted hereunder which terms and conditions
need not be the same in each case, subject to the following:
(a) Option Price. The price at which each share
of Common Stock covered by an option granted under the Plan may be
purchased shall be determined by the Committee and shall not be
less than the par value per share of Common Stock. The date of the
grant of an option shall be the date specified by the Committee in
its grant of the option.
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(b) Option Period. The period for exercise of an
option shall in no event be more than ten years from the date of
grant. Options may, in the discretion of the Committee, become
vested and be made exercisable in installments during the option
period. Any shares not purchased on any applicable installment date
may be purchased thereafter at any time before the expiration of
the option period.
(c) Exercise of Options. In order to exercise an
option, the holder thereof (the "Optionee") shall deliver to the
Company written notice specifying the number of shares of Common
Stock to be purchased, together with cash or a certified or bank
cashier's check payable to the order of the Company in the full
amount of the purchase price therefor; provided that, for the
purpose of assisting an Optionee to exercise an option, the Company
may make loans to the Optionee or guarantee loans made by third
parties to the Optionee, on such terms and conditions as the Board
of Directors may authorize and approve; and provided further that
such purchase price may be paid in shares of Common Stock owned by
the Optionee having a market value on the date of exercise equal to
the aggregate purchase price, or in a combination of cash and
Common Stock. For purposes of the Plan, the market value per share
of Common Stock shall be the last sale price regular way on the
date of reference, or, in case no sale takes place on such day, the
average of the closing bid and asked prices regular way, in either
case on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or if the Common
Stock is not listed or admitted to trading on any national
securities exchange, the last sale price of the Common Stock as
reported on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System on such date,
or if the Common Stock is not so reported, the average of the
closing high bid and low asked prices of the Common Stock in the
over-the-counter market on such date, as reported on the NASDAQ
system, or if there are no such prices reported on the NASDAQ
system on such date, as furnished to the Committee by a New York
Stock Exchange member selected from time to time by the Committee
for such purpose. If there is no bid or asked price reported on any
such date, the market value shall be determined by the Committee in
accordance with the regulations promulgated under Section 2031 of
the Code, or by any other appropriate method selected by the
Committee. An Optionee shall have none of the rights of a
stockholder until the shares of Common Stock are issued to him. An
option may not be exercised for less than ten shares of Common
Stock, or the number of shares of Common Stock remaining subject to
such option, whichever is smaller.
(d) Effect of Termination of Employment. An
option may not be exercised after the Optionee has ceased to be in
the employ of the Company or any Parent or Subsidiary, except that:
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(i) if, subsequent to any vesting date specified in the
option, the Optionee's employment is terminated by action of
his employer for reasons other than "cause" (as hereinafter
defined), or by the Optionee (unless his employer shall have
grounds to terminate his employment for "cause"), the option
may be exercised by the Optionee within the period specified
in the terms of the option;
(ii) In the event of the death of the Optionee after
termination of employment covered by (i) above, the person or
persons to whom his rights are transferred by will or the laws
of descent and distribution shall have a period specified in
the terms of the option to exercise such option;
(iii) in the event of the death of the Optionee while
employed, the person or persons to whom the Optionee's rights
are transferred by will or the laws of descent and
distribution shall have a period specified in the terms of the
option to exercise such option.
For purposes hereof "cause" means (i) an Optionee's conviction
of a felony involving moral turpitude with respect to the business
of the Company or any Parent or Subsidiary thereof, (ii) an
Optionee's willful violation of directions of the Board or the
Chief Executive Officer of the Company or any Parent or Subsidiary
thereof, (iii) an Optionee's engaging in conduct which constitutes
willful neglect or willful misconduct in connection with the
performance of his duties or (iv) an Optionee's engaging in conduct
which violates the terms or conditions of his option grant. Nothing
in the Plan or in any option granted pursuant to the Plan (in the
absence of an express provision to the contrary) shall confer on
any individual any right to continue in the employ of the Company
or any Parent or Subsidiary thereof or interfere in any way with
the right of the Company to terminate his employment at any time.
(e) Nontransferability of Options. During the
lifetime of an Optionee, options held by such Optionee shall be
exercisable only by him. No option shall be transferable other than
by will or by the laws of descent and distribution.
(f) Adjustments for Change in Stock Subject to
Plan and Other Events. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other change
in the corporate structure or shares of the Company, the Committee
shall make such adjustments, if any, as it deems appropriate in the
number and kind of shares subject to the Plan, in the number and
kind of shares covered by outstanding options, or in the option
price per share.
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(g) Acceleration of Exercisability of Options
Upon Occurrence of Certain Events. In connection with any merger
or consolidation in which the Company is not the surviving
corporation or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer
for or the acquisition, directly or indirectly, by any person or
group of all or a majority of the then outstanding voting
securities of the Company, all outstanding options under the Plan
shall, at the election of the Committee, become exercisable in
full, notwithstanding any other provision of the Plan or of any
outstanding options granted thereunder, on and after (i) the
fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case
may be. The provisions of the foregoing sentence shall apply to any
outstanding options which are incentive stock options to the extent
permitted by Section 422(d) of the Code and such outstanding
options in excess thereof shall, immediately upon the occurrence of
the event described in clause (i) and (ii) of the foregoing
sentence, be treated for all purposes of the plan as nonstatutory
stock options and shall be immediately exercisable as such as
provided in the foregoing sentence. Notwithstanding the foregoing,
in no event shall any option be exercisable after the date of
termination of the exercise period of such option specified in
Sections 5(b), 5(d) and 6.
(h) Registration, Listing and Qualification
Shares of Stock. Each option shall be subject to the requirement
that if at any time the Board of Directors shall determine that the
registration, listing or qualification of the shares of Common
Stock covered thereby upon any securities exchange or under any
federal or state law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the granting of such option or
the purchase of shares of Common Stock thereunder, no such option
may be exercised unless and until such registration, listing,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of
Directors. The Company may require that any person exercising an
option shall make such representations and agreements and furnish
such information as it deems appropriate to assure compliance with
the foregoing or any other applicable legal requirement.
(i) Other Terms and Conditions. The Committee
may impose such other terms and conditions, not inconsistent with
the terms hereof, on the grant or exercise of options, as it deems
advisable.
6. Provisions Applicable to Incentive Stock Options.
The Committee may, in its discretion, grant "incentive stock
options" (within the meaning of Section 422 of the Code) under the
Plan to eligible employees, provided, however, that: (a) no such
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incentive stock option shall be granted at an option price which is
less than the market value per share of Common Stock on the date of
the grant; (b) no such incentive stock option shall be issued to
any one Optionee if the aggregate fair market value, determined at
the time of the grant of such incentive stock options, of the
shares with respect to which such incentive stock options are
exercisable for the first time by such Optionee during any calendar
year, together with all options under any other incentive stock
option plan of the Company exercisable during such year, exceeds
$100,000; (c) no such incentive stock option shall be granted to
any Optionee who at the time such option is granted owns more than
10 percent of the total combined voting stock of the Company unless
(i) the option price is not less than 110 percent of the fair
market value per share of stock on the date of the grant, and (ii)
the option is not exercisable after five years from the date such
option is granted; (d) Section 5(d) hereof shall not (except for
the definition of "cause" thereunder) apply to any incentive stock
option during any period in which such option, pursuant to its
terms, is an incentive stock option; and (e) during any period in
which such option, pursuant to its terms, is an incentive stock
option, no such incentive stock option may be exercised after the
Optionee has ceased to be in the employ of the Company or any
Parent or Subsidiary, except (i) if the Optionee's employment is
terminated by action of his employer for reasons other than
"cause", or by reason of disability or retirement under any
retirement plan maintained by the Company or any Parent or
Subsidiary thereof, the incentive stock option may be exercised by
the Optionee within 30 days after such termination, but only as to
any shares exercisable on the date the Optionee's employment so
terminates, and (ii) in the event of the death of the Optionee
while employed, the person or persons to whom his rights are
transferred by will or the laws of descent and distribution shall
have a period of one year from the date of the Optionee's death to
exercise any incentive stock options which were exercisable by the
Optionee at the time of his death.
7. Withholding Tax. Upon the exercise of an option
granted pursuant to the Plan, or the disposition by any person of
shares of Common Stock acquired pursuant to the exercise of an
option granted pursuant to the Plan, the Company shall have the
right to require such person to pay the Company the amount of any
taxes which the Company may be required to withhold with respect to
such shares.
8. Amendment and Termination. Unless the Plan shall
theretofore have been terminated as hereinafter provided, the Plan
shall terminate on, and no option shall be granted thereunder after
March 31, 2003; provided, however, that the Board of Directors may
at any time prior to that date terminate the Plan. The Board of
Directors may at any time amend the Plan; provided, however, that,
except as contemplated in Section 5(f) hereof, the Board of
Directors shall not, without approval by a majority of the votes
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cast by the stockholders of the Company at a meeting of stock-
holders at which a proposal to amend the Plan is voted upon: (i)
increase the maximum number of shares of Common Stock for which
options may be granted under the Plan, (ii) change the formula as
to minimum option prices, (iii) extend the period during which
options may be granted or exercised, or (iv) amend the requirements
as to the class of persons eligible to receive options. No
termination or amendment of the Plan may, without the consent of an
Optionee, adversely affect the rights of such Optionee under any
option held by such Optionee.
9. Other Actions. Nothing contained in the Plan shall
be construed to limit the authority of the Company to exercise its
corporate rights and powers, including but not by way of
limitation, the right of the Company to grant or assume options for
proper corporate purposes other than under the Plan with respect to
any employee or other person, firm, corporation or association.
