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QRS CORPORATION
SPECIAL NON-OFFICER STOCK OPTION PLAN
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(AS AMENDED AND RESTATED THROUGH MAY 31, 2000)
ARTICLE ONE
GENERAL
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A. This Special Non-Officer Stock Option Plan is intended to
promote the interests of QRS Corporation, a Delaware corporation, by
authorizing an additional reserve of shares of the Corporation's common stock
for issuance through long-term option grants to individuals in the employ of
the Corporation (or any Parent or Subsidiary) who are neither officers of the
Corporation nor members of the Board and who are not otherwise Section 16
Insiders.
B. The Plan became effective immediately upon adoption by the
Board on December 24, 1997.
C. This Plan shall supplement the authorized share reserve under
the Corporation's 1993 Stock Option/Stock Issuance Plan, and share issuances
under this Plan shall not reduce or otherwise affect the number of shares of
the Corporation's common stock available for issuance under the 1993 Stock
Option/Stock Issuance Plan. In addition, share issuances under the 1993
Stock Option/Stock Issuance Plan shall not reduce or otherwise affect the
number of shares of the Corporation's common stock available for issuance
under this Plan.
D. Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.
E. All share numbers in this May 31, 2000 restatement reflect the
3-for-2 split of the Common Stock effected on July 12, 1999.
I. ADMINISTRATION OF THE PLAN
A. The Plan Administrator shall have full power and discretion
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the
Plan and to make such determinations under, and issue such interpretations
of, the provisions of the Plan and any outstanding option grants thereunder
as it may deem necessary or advisable. Decisions of the Plan Administrator
shall be final and binding on all parties who have an interest in the Plan or
any outstanding option thereunder.
B. The individuals serving as Plan Administrator shall serve for
such period as the Board may determine and shall be subject to removal by the
Board at any time.
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C. Service as Plan Administrator shall constitute service as a
Board member, and each Board member serving as Plan Administrator shall
accordingly be entitled to full indemnification and reimbursement as a Board
member for such service. No individual serving as Plan Administrator shall
be liable for any act or omission made in good faith with respect to the Plan
or any option granted under the Plan.
II. ELIGIBILITY
A. The persons eligible to participate in the Plan shall be
limited to those Employees who are neither officers of the Corporation nor
members of the Board and who are not otherwise Section 16 Insiders.
B. The Plan Administrator shall have full authority to determine
which eligible Employees are to receive option grants under the Plan, the
number of shares to be covered by each such grant, the time or times at which
each granted option is to become exercisable and the maximum term for which
the option may remain outstanding. All options granted under the Plan shall
be Non-Statutory Options.
III. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under
the Plan and shall be drawn from either the Corporation's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock reserved for issuance over the term
of the Plan shall be limited to Six Hundred Seventy-Five Thousand (675,000)
shares, subject to adjustment from time to time in accordance with the
provisions of this Section III. Such authorized share reserve is comprised
of (i) the initial 225,000-share reserve under the Plan plus (ii) an
additional 225,000-share increase authorized by the Board on February 15,
1999 plus (iii) an additional 225,000-share increase authorized by the Board
in May 2000.
B. Should one or more outstanding options under this Plan expire
or terminate for any reason prior to exercise in full (including any option
cancelled in accordance with the cancellation-regrant provisions of Section
III of Article Two), then the shares subject to the portion of each option
not so exercised shall be available for subsequent issuance under the Plan.
Should the exercise price of an outstanding option under the Plan be paid
with shares of Common Stock, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the option is exercised, and not by the net number of shares
of Common Stock actually issued to the holder of such option.
C. Should any change be made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, and (ii) the
number and/or class of securities and price per share in effect under each
option outstanding under the Plan.
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Such adjustments to the outstanding options are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
such options. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.
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ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Options granted under the Plan shall be authorized by action of the
Plan Administrator and shall be evidenced by one or more instruments in the
form approved by the Plan Administrator; provided, however, that each such
instrument shall comply with the terms and conditions specified below. All
such granted options shall be Non-Statutory Options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the
Plan Administrator but shall not be less than one hundred percent (100%) of
the Fair Market Value per share of Common Stock on the grant date.
2. Full payment of the exercise price shall become
immediately due upon exercise of the option and shall be payable in one or
more of the forms specified below:
(i) cash or check made payable to the
Corporation's order,
(ii) shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(iii) through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions to (a) a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation in connection
with such purchase and to (b) the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. TERM AND EXERCISE OF OPTIONS. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing such option. No option shall have a maximum term in
excess of ten (10) years. During the lifetime of the Optionee, the option
shall be exercisable only by the Optionee and shall not be assignable or
transferable except for a transfer of the option effected by will or by the
laws of inheritance following the Optionee's death.
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C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of
any option held by the Optionee at the time of cessation of Service or death:
(i) Should Optionee cease to remain in Service
for any reason (other than death, Permanent Disability or Misconduct) while
the option is outstanding, then Optionee shall retain the right to exercise
that option until the earlier of (A) the expiration of the three (3)-month
period commencing with the date of such cessation of Service or (B) the
expiration of the ten (10)-year option term.
(ii) If the Optionee dies while holding an
outstanding option, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to
Optionee's will or in accordance with the laws of inheritance shall have the
right to exercise the option. Such right shall lapse, and the option shall
cease to be outstanding, upon the earlier of (A) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or (B) the
expiration of the ten (10)-year option term.
(iii) Should Optionee cease Service by reason of
Permanent Disability while the option is outstanding, then Optionee shall
retain the right to exercise that option until the earlier of (A) the
expiration of the twelve (12)-month period commencing with the date of such
cessation of Service or (B) the expiration of the ten (10)-year option term.
(iv) Should Optionee's Service be terminated for
Misconduct, then each outstanding option held by the Optionee shall terminate
immediately and cease to remain outstanding.
(v) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than the
number of shares for which the option is exercisable on the date of
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any otherwise
exercisable shares for which the option has not been exercised. However, the
option shall, immediately upon Optionee's cessation of Service for any
reason, terminate and cease to be outstanding with respect to any and all
option shares for which the option is not otherwise at the time exercisable.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the
option is to remain exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that option to such
greater period of time as the Plan Administrator shall deem appropriate, but
in no event beyond the expiration of the option term, and/or
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(ii) permit the option to be exercised, during
the applicable post-Service exercise period, not only with respect to the
number of shares of Common Stock for which such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one or
more additional installments for which the option would have become
exercisable had the Optionee continued in Service.
D. SHAREHOLDER RIGHTS. A Optionee shall have none of the rights
of a shareholder with respect to any option shares until such person shall
have exercised the option and paid the exercise price for the purchased
shares.
II. CORPORATE TRANSACTION
A. In the event of any Corporate Transaction, each option
which is at the time outstanding under the Plan shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for such Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
that option and may be exercised for all or any portion of those shares as
fully-vested shares. However, an outstanding option under the Plan shall not
so accelerate if and to the extent: (i) such option is, in connection with
the Corporate Transaction, to be assumed by the successor corporation or
parent thereof, (ii) such option is to be replaced with a cash incentive
program of the successor corporation which preserves the option spread
existing at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same exercise/vesting schedule applicable to
such option or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option
grant.
B. The Plan Administrator shall have the discretionary authority
to structure one or more options under the Plan so that those options shall
immediately accelerate upon an Involuntary Termination of the Optionee's
Service within a designated period (not to exceed twelve (12) months)
following the effective date of a Corporate Transaction in which those
options are assumed by the successor corporation and accordingly do not
accelerate at the time of such Corporate Transaction.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options under the Plan shall terminate and cease
to remain outstanding, except to the extent assumed by the successor
corporation or its parent company.
D. Each outstanding option which is assumed in connection with
the Corporate Transaction shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issued to the Optionee, in consummation of
the Corporate Transaction, had such person exercised the option immediately
prior to such Corporate Transaction. Appropriate adjustments shall also be
made to the exercise price payable per share, provided the aggregate exercise
price payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under the Plan
following the consummation of the Corporate Transaction shall be
appropriately adjusted.
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E. The grant of options under the Plan shall in no way affect
the right of the Corporation 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.
III. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the sole and exclusive authority to
effect, at any time and from time to time, with the consent of the affected
Optionees, the cancellation of any or all outstanding options under the Plan
and to grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an exercise price per
share not less than the Fair Market Value of the Common Stock on the new
grant date.
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ARTICLE THREE
MISCELLANEOUS
I. AMENDMENT OF THE PLAN
The Board has complete and exclusive power and authority to amend or
modify the Plan in any or all respects whatsoever. However, no such
amendment or modification shall adversely affect rights and obligations with
respect to stock options at the time outstanding under the Plan, unless the
affected Optionees consent to such amendment.
II. TAX WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of stock options under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income tax and
employment tax withholding requirements.
III. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan became effective upon approval by the Board at the
December 24, 1997 Board meeting and shall not be subject to shareholder
approval.
B. The Plan was amended by the Board on February 15, 1999 to
increase the number of shares of Common Stock authorized for issuance under
the Plan by an additional 225,000 shares. The Plan was further amended in
May 2000 to increase the number of shares of Common Stock authorized for
issuance under the Plan by another 225,000 shares.
C. The Plan shall terminate upon the earlier of (i) December 31,
2007 or (ii) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to the exercise of options under the
Plan. If the date of termination is determined under clause (i) above, then
all option grants outstanding on such date shall thereafter continue to have
force and effect in accordance with the provisions of the instruments
evidencing those grants.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants under the Plan shall be used for general corporate
purposes.
V. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option
under the Plan, and the issuance of Common Stock upon the exercise of the
stock options granted hereunder shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the stock options granted under it and the
Common Stock issued pursuant to it.
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B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance
with all applicable requirements of Federal and state securities laws,
including the filing and effectiveness of the Form S-8 registration statement
for the shares of Common Stock issuable under the Plan, and all applicable
listing requirements of any securities exchange on which the Common Stock is
then listed for trading.
VI. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of
the Plan shall be construed so as to grant any individual the right to remain
in Service for any period of specific duration, and the Corporation (or any
Parent or Subsidiary employing such individual) may terminate such
individual's Service at any time and for any reason, with or without cause.
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APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. CODE shall mean the Internal Revenue Code of 1986, as amended.
C. COMMON STOCK shall mean the Corporation's common stock.
D. CORPORATE TRANSACTION shall mean any of the following
shareholder-approved transactions to which the Corporation is a party:
- a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State in which the Corporation is incorporated;
- the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation; or
- any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such merger.
E. Corporation shall mean QRS Corporation, a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of QRS Corporation which shall by appropriate action
adopt the Plan.
F. Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
G. Exercise Date shall mean the date on which the Corporation
shall have received written notice of the option exercise.
H. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
- If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such
price is reported by the National Association of Securities Dealers on the
Nasdaq National Market. If there is no
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closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
- If the Common Stock is at the time listed on any
national securities exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on that
exchange, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
I. INVOLUNTARY TERMINATION shall mean the termination of the
Service of any individual which occurs by reason of:
- such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
- such individual's voluntary resignation following (A)
a change in his or her position with the Corporation which materially
reduces his or her duties and responsibilities or the level of
management to which he or she reports, (B) a reduction in his or her
level of compensation (including base salary, fringe benefits and
target bonuses under corporate-performance based bonus or incentive
programs) by more than fifteen percent (15%) or (C) a relocation of
such individual's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected
by the Corporation without the individual's consent.
J. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee, any unauthorized use or
disclosure by the Optionee of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Optionee adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of any Optionee or other person in the
Service of the Corporation (or any Parent or Subsidiary).
K. NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
L. OPTIONEE shall mean any person to whom an option is granted
under the Plan.
M. PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
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percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
N. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.
O. PLAN shall mean the Corporation's Special Non-Officer Stock
Option Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee comprised of one
or more Board members appointed by the Board to administer the Plan.
Q. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit restrictions of Section 16 of
the 1934 Act.
R. SERVICE shall mean the provision of services on a periodic
basis to the Corporation (or any Parent or Subsidiary) in the capacity of an
Employee or an independent consultant or advisor, except to the extent
otherwise specifically provided in the applicable stock option agreement.
S. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, 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.
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