PRISM SOFTWARE CORPORATION
2000 NONSTATUTORY STOCK OPTION PLAN
1. PURPOSE. The Plan is intended to provide incentive to key employees
and directors of the Company, to encourage proprietary interest in the Company,
to encourage such key employees to remain in the employ of the Company, and to
attract new employees with outstanding qualifications.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the committee, if any, appointed by
the Board in accordance with Section 4 of the Plan.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Prism Software Corporation, a Delaware
corporation.
(f) "Disability" shall mean the condition of an Employee who is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve
months.
(g) "Employee" shall mean an individual who is employed (within
the meaning of Code Section 3401 and the regulations thereunder)
by the Company.
(h) "Exercise Price" shall mean the price per Share of Common
Stock, determined by the Board or the Committee, at which an
Option may exercised.
(i) "Fair Market Value" shall mean the value of one Share of
Common Stock, determined as follows:
(1) If the Shares are traded on any recognized exchange, the
NASDAQ System, or the NASDAQ OTC-Bulletin Board, the closing
price if one is available, or the mean between the bid and asked
prices at the close of business on the date of valuation; or
(2) If (1) does not apply, the fair market value as
determined by the Board or the Committee in good faith. Such
determination shall be conclusive and binding on all persons.
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(j) "Option" shall mean any stock granted pursuant to the Plan.
(k) "Optionee" shall mean an employee who has received an Option.
(l) "Plan" shall mean the Prism Software Corporation 2000
Nonstatutory Stock Option Plan, as it may be amended from time to
time.
(m) "Purchase Price" shall mean the Exercise Price times the
number of Shares with respect to which an Option is exercised.
(n) "Retirement" shall mean the voluntary termination of
employment by an Employee upon the attainment of age sixty-five
and the completion of not less than twenty years of service with
the Company.
(o) "Share" shall mean one share of Common Stock, adjusted in
accordance with Section 9 of the Plan (if applicable).
3. EFFECTIVE DATE. The Plan was adopted by the Board on May 4, 2000,
which shall be the effective date of the Plan.
4. ADMINISTRATION. The Plan shall be administered by the Board, or by a
committee appointed by the Board which shall consist of not less than three
members (the "Committee"). The Board shall appoint one of the members of the
Committee, if there be one, as Chairman of the Committee. If a Committee has
been appointed, the Committee shall hold meetings at such times and places as it
may determine. Acts of a majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. The Board, or the Committee
if there be one, shall from time to time at its discretion select the Employees
who are to be granted Options, and determine the number of Shares to be granted
to each Optionee. A member of the Board or a Committee member shall in no event
participate in any determination relating to Options held by or to be granted to
such Board or Committee member. The interpretation and construction by the
Board, or by the Committee if there be one, of any provision of the Plan or of
any Option granted thereunder shall be final. No member of the Board or of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted thereunder.
5. PARTICIPATION.
The Optionees shall be such persons as the Board, or the Committee if
there be one, may select from among the following classes of persons:
(1) Employees of the Company (who may be officers, whether
or not they are directors); and
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(2) Directors of the Company.
6. STOCK. The stock subject to Options granted under the Plan shall be
Shares of the Company's authorized but unissued or reacquired Common Stock. The
aggregate number of Shares which may be issued upon exercise of Options under
the Plan shall not exceed three million (3,000,000) shares. The number of Shares
subject to Options outstanding at any time shall not exceed the number of Shares
remaining available for issuance under the Plan. In the event that any
outstanding Option for any reason expires or is terminated, the Shares allocable
to the unexercised portion of such Option may again be made subject to any
Option. The limitations established by this Section 6 shall be subject to
adjustment in the manner provided in Section 10 hereof upon the occurrence of an
event specified therein.
7. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENTS. Options shall be evidenced by
written stock option agreements in such form as the Board, or the
Committee if there be one, shall from time to time determine.
Such agreements shall comply with and be subject to the terms and
conditions set forth below.
(b) NUMBER OF SHARES. Each Option shall state the number of
Shares to which it pertains and shall provide for the adjustment
thereof in accordance with the provisions of Section 9 hereof.
(c) EXERCISE PRICE. Each Option shall state the Exercise Price.
Except as otherwise determined by the Board or the Committee, the
Exercise Price shall not be less than 85% of the Fair Market
Value on the date of grant.
(d) MEDIUM AND TIME OF PAYMENT. The Purchase Price shall be
payable in full in United States dollars upon the exercise of the
Option; provided, however, that if the applicable Option
Agreement so provides the Purchase Price may be paid (i) by the
surrender of Shares in good form for transfer, owned by the
person exercising the Option and having a Fair Market Value on
the date of exercise equal to the Purchase Price, or in any
combination of cash and Shares, as long as the sum of the cash so
paid and the Fair Market Value of the Shares so surrendered equal
the Purchase Price, (ii) by cancellation of indebtedness owed by
the Company to the Optionee, (iii) with a full recourse
promissory note executed by the Optionee, or (iv) any combination
of the foregoing. The interest rate and other terms and
conditions of such note shall be determined by the Board, or the
Committee if there be one. The Board, or the Committee if there
be one, may require that the Optionee pledge his or her Shares to
the Company for the purpose of securing the payment of such note.
In no event shall the stock certificate(s) representing such
Shares by released to the Optionee until such note shall have
been paid in full. In the event the Company determines that it is
required to withhold state or Federal income tax as a result of
the exercise of an Option, as a condition to the exercise
thereof, an Employee may be required to make arrangements
satisfactory to the Company to enable it to satisfy such
withholding requirements.
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(e) TERM AND NONTRANSFERABILITY OF OPTIONS. Each Option shall
state the time or times, and the conditions upon which, all or
part thereof becomes exercisable. No Option shall be exercisable
after the expiration of ten years from the date it was granted.
During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee and shall not be assignable or
transferable. In the event of the Optionee's death, the Option
shall not be transferable. In the event of the Optionee's death,
the Option shall not be transferable by the Optionee other than
by will or the laws of descent and distribution.
(f) TERMINATION OF EMPLOYMENT, EXCEPT BY DEATH, DISABILITY OR
RETIREMENT. If an Optionee ceases to be an Employee for any
reason other than his or her death, Disability or Retirement,
such Optionee shall have the right, subject to the restrictions
of (e) above, to exercise the Option at any time within three
months after termination of employment, but only to the extent
that, at the date of termination of employment, the Optionee's
right to exercise such Option had accrued pursuant to the terms
of the applicable option agreement and had not previously been
exercised; provided, however, that if the Optionee was terminated
for cause (as defined in the applicable option agreement) any
Option not exercised in full prior to such termination shall be
canceled. For this purpose, the employment relationship shall be
treated as continuing intact while the Optionee is on military
leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Committee). The
foregoing notwithstanding, the Board, or the Committee if there
be one, may extend or otherwise modify the period of time
specified herein during which the Option may be exercised
following termination of Optionee's employment.
(g) DEATH OF OPTIONEE. If an Optionee dies while an Employee, or
after ceasing to be an Employee but during the period while he or
she could have exercised the Option under this Section 7, and has
not fully exercised the Option, then the Option may be exercised
in full, subject to the restrictions of (e) above, at any time
within twelve months after the Optionee's death, by the executors
or administrators of his or her estate or by any person or
persons who have acquired the Option directly from the Optionee
by bequest or inheritance, but only to the extent that, at the
date of death, the Optionee's right to exercise such Option had
accrued and had not been forfeited pursuant to the terms of the
applicable Option Agreement and had not previously been
exercised. The foregoing notwithstanding, the Board, or the
Committee if there be one, may extend or otherwise modify the
period of time specified herein during which the Option may be
exercised following termination of Optionee's employment.
(h) DISABILITY OF OPTIONEE. If an Optionee ceases to be an
Employee by reason of Disability, such Optionee shall have the
right, subject to the restrictions of (f) above, to exercise the
Option at any time within twelve months after termination of
employment, but only to the extent that, at the date of
termination of employment, the Optionee's right to exercise such
Option had accrued pursuant to the terms of the applicable Option
Agreement and had not previously been exercised. The Board, or
the Committee if there be one, may extend or otherwise modify the
period of time specified herein during which the Option may be
exercised following termination of Optionee's employment.
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(i) RETIREMENT OF OPTIONEE. If an Optionee ceases to be an
Employee by reason of Retirement, such Optionee shall have the
right, subject to the restrictions of (e) above, to exercise the
Option at any time within three months after termination of
employment, but only to the extent that, at the date of
termination of employment, the Optionee's right to exercise such
Option had accrued pursuant to the terms of the applicable Option
Agreement and had not previously been exercised. The foregoing
notwithstanding, the Board, or the Committee if there be one, may
extend or otherwise modify the period of time specified herein
during which the Option may be exercised following termination of
Optionee's employment.
(j) RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to
any Shares covered by his or her Option until the date of the
issuance of a stock certificate for such Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property), distributions or other
rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 9 hereof.
(k) MODIFICATION, EXTENSION AND RENEWAL OF OPTION. Within the
limitations of the Plan, the Board, or the Committee if there be
one, may modify, extend or renew outstanding Options or accept
the cancellation of outstanding Options (to the extent not
previously exercised) for the granting of new Options in
substitution therefor. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any
Option previously granted.
(l) OTHER PROVISIONS. The stock option agreements authorized
under the Plan may contain such other provisions not inconsistent
with the terms of the Plan (including, without limitation,
restrictions upon the exercise of the Option) as the Board, or
the Committee if there be one, shall deem advisable.
8. TERM OF PLAN. Options may be granted pursuant to the Plan until the
expiration of ten years from the effective date of the Plan.
9. RECAPITALIZATIONS. The number of Shares covered by the Plan as
provided in Section 6 hereof, the number of Shares covered by each outstanding
Option and the Exercise Price thereof shall be proportionately adjusted for any
increase of decrease in the number of issued Shares resulting from a subdivision
or consolidation of Shares or the payment of a stock dividend (but only of
Common Stock) or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company. Subject to any
required action by stockholders, if the Company is the surviving Company in any
merger or consolidation, each outstanding Option shall pertain and apply to the
securities to which a holder of the number of Shares subject to the Option would
have been entitled. In the event of a merger or consolidation in which the
Company is not the surviving Company, the date of exercisability of each
outstanding Option shall be accelerated to a date prior to such merger or
consolidation, unless the agreement of merger or consolidation provides for the
assumption of the Option by the successor to the Company. To the extent that the
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foregoing adjustments relate to securities of the Company, such adjustments
shall be made by the Board, or the Committee if there be one, whose
determination shall be conclusive and binding on all persons. Except as
expressly provided in this Section 9, the Optionee shall have no rights by
reason of subdivision or consolidation of shares of stock of any class, the
payment of any stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution, liquidation,
merger or consolidation or spin-off of assets or stock of another Company, and
any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power to the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business assets.
10. SECURITIES LAW REQUIREMENTS.
(a) LEGALITY OF ISSUANCE. The issuance of any Shares upon the
exercise of any Option and the grant of any Option shall be
contingent upon the following:
(1) the Company and the Optionee shall have taken all
actions required to register the Shares under the Securities
Act of 1933, as amended (the "Act"), and to qualify the
Option and the Shares under any and all applicable state
securities or "blue sky" laws or regulations, or to perfect
an exemption from the respective registration and
qualification requirements thereof;
(2) any applicable listing requirement of any stock exchange
on which the Common Stock is listed shall have been
satisfied; and
(3) any other applicable provision of state of Federal law
shall have been satisfied.
(b) RESTRICTIONS ON TRANSFER. Regardless of whether the offering
and sale of Shares under the plan has been registered under the
Act or has been registered or qualified under the securities laws
of any state, the Company may impose restrictions on the sale,
pledge or other transfer of such Shares (including the placement
of appropriate legends on stock certificates) if, in the judgment
of the Company and its counsel, such restrictions are necessary
or desirable in order to achieve compliance with the provisions
of the Act, the securities laws of any state or any other law. In
the event that the sale of Shares under the Plan is not
registered under the Act but an exemption is available which
required an investment representation or other representation,
each Optionee shall be required to represent that such Shares are
being acquired for investment, and not with a view to the sale or
distribution thereof, and to make such other representations as
are deemed necessary or appropriate by the Company and its
counsel. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section
shall be conclusive and binding on all persons. Stock
certificates evidencing Shares acquired under the Plan pursuant
to an unregistered transaction shall bear the following
restrictive legend and such other restrictive legends as are
required or deemed advisable under the provisions of any
applicable law.
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"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."
(c) REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may,
but shall not be obligated to register or qualify the issuance of
Options and/or the sale of Shares under the Act or any other
applicable law. The Company shall not be obligated to take any
affirmative action in order to cause the issuance of Options or
the sale of Shares under the plan to comply with any law.
(d) EXCHANGE OF CERTIFICATES. If, in the opinion of the Company
and its counsel, any legend placed on a stock certificate
representing shares sold under the Plan is no longer required,
the holder of such certificate shall be entitled to exchange such
certificate for a certificate representing the same number of
Shares but lacking such legend.
11. AMENDMENT OF THE PLAN. The Board may from time to time, with
respect to any Shares at the time not subject to Options, suspend or discontinue
the plan or revise or amend it in any respect whatsoever.
12. EXECUTION. To record the adoption of the Plan in the form set forth
above by the Board effective as of May 4, 2000 the Company has caused this Plan
to be executed in the name and on behalf of the Company where provided below by
an officer of the Company thereunto duly authorized.
Prism Software Corporation
By: /s/ Ted Daniels
--------------------------------
Ted Daniels, President/CEO
By: /s/ Allard Villere
--------------------------------
Al Villere, Secretary
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