<PAGE>
Exhibit 4.1
DTVN HOLDINGS, INC.
2000 STOCK OPTION AND RESTRICTED STOCK PLAN
Effective December 21, 2000
SECTION 1
ESTABLISHMENT AND PURPOSE
-------------------------
This Plan is established to (i) offer selected, directors, officers,
Employees and Consultants of the Company or its Subsidiaries an equity ownership
interest in the financial success of the Company, (ii) provide the Company an
opportunity to attract, retain and motivate the best available personnel for
positions of substantial responsibility and (iii) to encourage equity
participation in the Company by eligible Participants. This Plan provides for
the grant by the Company of (i) Options to purchase Shares, and (ii) shares of
Restricted Stock. Options granted under this Plan may include Nonstatutory
Options as well as ISOs intended to qualify under Section 422 of the Code.
SECTION 2
DEFINITIONS
-----------
"Board of Directors" shall mean the board of directors of the Company, as
------------------
duly elected from time to time.
"Change in Control" shall mean such time as either (i) any "person", as such
-----------------
term is used in Section 14(d) of the Exchange Act (other than the Company, a
wholly-owned subsidiary of the Company, any employee benefit plan of the Company
or its Subsidiaries or Mr. Hugh Simpson together with his affiliates (as such
term is defined in Rule 12b-2 of the Exchange Act)) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act (or any
successor rule), directly or indirectly, of fifty percent (50%) or more of the
combined voting power of the Company's common stock or (ii) individuals who
constitute the Board of the Directors on the effective date of this Plan (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election or nomination for election by the Company's shareholders
was approved by a vote of at least three quarters of the directors comprising
the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for the
director without objection to such nomination) shall be, for purposes of this
clause (ii) considered as though such person was a member of the Incumbent
Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as
----
interpreted by the regulations thereunder.
1
<PAGE>
"Committee" shall mean the Stock Option Committee of the Company, or such
---------
other Committee as may be appointed by the Board of Directors from time to time.
"Company" shall mean DTVN Holdings, Inc., a Delaware corporation.
-------
"Consultant" shall mean any individual that is expressly designated as a
----------
consultant of the Company or its Subsidiaries by the Committee in its sole
discretion.
"Covered Employee" shall mean an individual who, on the last day of the
----------------
taxable year, is the chief executive officer of the Company or any one of the
four most highly compensated officers of the Company other than the chief
executive, as described in Section 162(m)(e) of the Code.
"Date of Grant" shall mean the date on which the Committee resolves to grant
-------------
an Option to an Optionee or grant Restricted Stock to a Participant, as the case
may be.
"Disinterested Director" shall mean a member of the Board of Directors who
----------------------
is both (i) a Non-Employee Director, within the meaning of Rule 16b-3
promulgated under the Exchange Act, as amended from time to time and (ii) an
Outside Director, within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder, as amended from time to time.
"Employee" shall include every individual performing Services to the Company
--------
or its Subsidiaries other than as a Consultant and only if the relationship
between such individual and the Company or its Subsidiaries is the legal
relationship of employer and employee. This definition of "Employee" is
qualified in its entirety and is subject to the definition set forth in Section
3401(c) of the Code and the regulations thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
------------
and as interpreted by the rules and regulations promulgated thereunder.
"Exercise Price" shall mean the amount for which one Share may be purchased
--------------
upon exercise of an Option, as specified by the Committee in the applicable
Stock Option Agreement, but in no event less than the par value per Share.
"Fair Market Value" shall mean the closing price of the shares on the
-----------------
national securities exchange on which the Shares are listed (if the shares are
so listed) as reported in the Wall Street Journal on the applicable date (or, if
not so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation System) or on the NASDAQ National Market System (if
the Shares are regularly quoted thereon), or, if not so listed or regularly
quoted, the mean of the closing bid and asked prices of the securities in the
over-the-counter market, on the applicable date or, if such bid and asked prices
shall not be available, as reported by any nationally recognized quotation
service selected by the Company, or as determined by the Committee in a manner
consistent with the provisions of the Code.
"ISO" shall mean a stock option which is granted to an individual and which
---
meets the requirements of Section 422 of the Code.
2
<PAGE>
"Nonstatutory Option" shall mean any Option granted by the Committee that is
-------------------
not an ISO.
"Option" shall mean either an ISO or Nonstatutory Option, as the context
------
requires, granted under this Plan.
"Optionee" shall mean a Participant who holds an Option.
--------
"Participants" shall mean those individuals described in Section 1 of this
------------ ---------
Plan selected by the Committee who are eligible under Section 4 of this Plan for
---------
grants of either Options or Restricted Stock under this Plan.
"Performance Goals" shall have that meaning set forth in Section 3(c)(xii)
-----------------
of the Plan.
"Permanent and Total Disability" shall mean that an individual 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
more than twelve (12) months. An individual shall not be considered to suffer
from Permanent and Total Disability unless such individual furnishes proof of
the existence thereof in such form and manner, and at such times, as the
Committee may reasonably require. The scope of this definition shall
automatically be reduced or expanded to the extent that Section 22(e)(3) of the
Code is amended to reduce or expand the scope of the definition of Permanent and
Total Disability thereunder.
"Plan" shall mean this DTVN Holdings, Inc. 2000 Stock Option and Restricted
----
Stock Plan, as amended from time to time.
"Plan Award" shall mean the grant of either an Option or Restricted Stock,
----------
as the context requires.
"Plan Maximum" shall have that meaning set forth in Section 5(a) of this
------------ ------------
Plan.
"Restricted Stock" shall have that meaning set forth in Section 7(a) of this
---------------- ------------
Plan.
"Restricted Stock Account" shall have that meaning set forth in Section
------------------------ -------
7(a)(ii) of this Plan.
--------
"Restricted Stock Criteria" shall have that meaning in Section 7(a)(iv) of
------------------------- ----------------
this Plan.
"Restriction Period" shall have that meaning in Section 7(a)(iii) of this
------------------ -----------------
Plan.
"Services" shall mean services rendered to the Company or any of its
--------
Subsidiaries by a Participant.
3
<PAGE>
"Share" shall mean one share of Stock, as adjusted in accordance with
-----
Section 9 of this Plan (if applicable).
---------
"Stock" shall mean the Common Stock of the Company, par value $.001 per
-----
share.
"Stock Option Agreement" shall mean the agreement executed between the
----------------------
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to the granting of an Option.
"Subsidiary" shall mean any corporation as to which more than fifty (50%)
----------
percent of the outstanding voting stock or shares shall now or hereafter be
owned or controlled, directly by a person, any Subsidiary of such person, or any
Subsidiary of such Subsidiary.
"Ten-Percent Shareholder" shall mean a person that owns more than ten
-----------------------
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company or any Subsidiary, taking into account the attribution
rules set forth in Section 424 of the Code, as amended. For purposes of this
definition of "Ten Percent Shareholder" the term "outstanding stock" shall
include all stock actually issued and outstanding immediately after the grant of
an Option to an Optionee. "Outstanding stock" shall not include reacquired
shares or shares authorized for issuance under outstanding Options held by the
Optionee or by any other person.
"Vest Date" shall have that meaning in Section 7(a)(v) of this Plan.
--------- ---------------
SECTION 3
ADMINISTRATION
--------------
(a) General Administration. This Plan shall be administered by the Board
----------------------
of Directors or the Committee (as the Board of Directors in its sole discretion
shall determine); provided, if the Plan is to be administered by the Committee,
then the Committee shall consist of at least two persons, each of whom shall be
Disinterested Directors. For purposes of the Plan, the Board of Directors acting
in this capacity or the Committee shall be referred to as the "Committee." The
members of the Committee shall be appointed by the Board of Directors for such
terms as the Board of Directors may determine. The Board of Directors may from
time to time remove members from, or add members to, the Committee. Vacancies on
the Committee, however caused, may be filled by the Board of Directors.
(b) Committee Procedures. The Board of Directors shall designate one of
--------------------
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by a majority of all Committee members, shall be valid
acts of the Committee. A majority of the Committee shall constitute a quorum.
(c) Authority of Committee. This Plan shall be administered by, or under
----------------------
the direction of, the Committee constituted in such a manner as to comply at all
times with Rule 16b-3 (or any successor rule) under the Exchange Act. The
Committee shall administer this Plan
4
<PAGE>
so as to comply at all times with the Exchange Act and the Code and shall have
absolute and final authority, subject to the provisions of the Plan, to
interpret this Plan and to make all determinations specified in or permitted by
this Plan or deemed necessary or desirable for its administration or for the
conduct of the Committee's business including without limitation the authority
to take the following actions:
(i) To interpret this Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating
to this Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of this Plan;
(iv) To determine when Plan Awards are to be granted under this
Plan;
(v) To select the Optionees and Participants;
(vi) To determine the number of Shares to be made subject to each
Plan Award;
(vii) To prescribe the terms, conditions and restrictions of each
Plan Award, including without limitation, the Exercise Price, the vesting
schedule and the determination whether an Option is to be classified as an ISO
or a Nonstatutory Option;
(viii) To amend or cancel any outstanding Stock Option Agreement
(other than the Exercise Price) or the terms, conditions and restrictions of a
grant of Restricted Stock, subject to applicable legal restrictions and the
consent of the Optionee or Participant, as the case may be, who entered into
such agreement, or accelerate the vesting of any Plan Award;
(ix) To establish procedures so that an Optionee may obtain a loan
through a registered broker-dealer under the rules and regulations of the
Federal Reserve Board, for the purpose of exercising an Option;
(x) To establish procedures for an Optionee (1) to have withheld
from the total number of Shares to be acquired upon the exercise of an Option
that number of Shares having a Fair Market Value, which, together with such cash
as shall be paid in respect of fractional shares, shall equal the Exercise
Price, and (2) to exercise a portion of an Option by delivering that number of
Shares already owned by an Optionee having a Fair Market Value which shall equal
the partial Exercise Price and to deliver the Shares thus acquired by such
Optionee in payment of Shares to be received pursuant to the exercise of
additional portions of the Option, the effect of which shall be that an Optionee
can in sequence utilize such newly acquired shares in payment of the Exercise
Price of the entire Option, together with such cash as shall be paid in respect
of fractional shares;
(xi) To establish procedures whereby a number of Shares may be
withheld from the total number of Shares to be issued upon exercise of an
Option, to meet the obligation of
5
<PAGE>
withholding for federal and state income and other taxes, if any, incurred by
the Optionee upon such exercise;
(xii) To establish performance goals ("Performance Goals") in
connection with any grant of Restricted Stock, which Performance Goals may be
based on earnings, market share, revenue, net profits, stock price, return on
capital, operating margins, general and administrative expenses, or refinements
of these measures; provided that in any case, the Performance Goals may be based
on either a single period or cumulative results, aggregate or per share data or
results computed independently or with respect to a peer group; and
(xiii) To take any other actions deemed necessary or advisable for the
administration of this Plan.
All interpretations and determinations of the Committee made with respect to
the administration and interpretation of the Plan and the granting of Plan
Awards shall be final, conclusive, and binding on all interested parties. The
Committee may make grants of Plan Awards on an individual or group basis. The
provisions and conditions of the Plan Awards need not be the same with respect
to each Optionee or Participant or with respect to each Plan Award. No member
of the Committee shall be liable for any action that is taken or is omitted to
be taken if such action or omission is taken in good faith with respect to this
Plan or grant of any Plan Award.
(d) Holding Period. The Committee may in its sole discretion require as a
--------------
condition to the granting of any Plan Award, that a Participant hold the Plan
Awards for a period of six months following the date of such acquisition. This
condition shall be satisfied with respect to an Option if at least six months
elapse from the date of acquisition of the Option to the date of disposition of
the Option (other than upon exercise or conversion) or its underlying equity
security.
(e) Compliance with Section 162(m) of the Code. It is intended that the
------------------------------------------
granting of the Plan Award that affects a Covered Employee will qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
and the regulations promulgated thereunder.
SECTION 4
ELIGIBILITY
-----------
(a) General Rule. Subject to the limitations set forth in subsection b
------------ ------------
below or elsewhere in this Plan, Participants shall be eligible to participate
in this Plan.
(b) Non-Employee Ineligible for ISOs. In no event shall an ISO be granted
--------------------------------
to any individual who is not an Employee on the Date of Grant.
6
<PAGE>
SECTION 5
SHARES SUBJECT TO PLAN
----------------------
(a) Basic Limitation. Shares offered under this Plan may be authorized but
----------------
unissued Shares or Shares that have been reacquired by the Company. The
aggregate number of Shares that are available for issuance under this Plan shall
not exceed 7.0 million (7,000,000) Shares, subject to adjustment pursuant to
Section 9 of this Plan (the "Plan Maximum"). The Committee shall not issue more
---------
Shares than are available for issuance under this Plan. The number of Shares
that are subject to unexercised Options at any time under this Plan shall not
exceed the number of Shares that remain available for issuance under this Plan.
The Company, during the term of this Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of this Plan.
(b) Additional Shares. In the event any outstanding Option for any reason
-----------------
expires, is canceled or otherwise terminates, the Shares allocable to the
unexercised portion of such Option shall again be available for issuance under
this Plan. In the event that Shares issued under this Plan revert to the
Company prior to the Vest Date under a grant of Restricted Stock, such Shares
shall again be available for issuance under this Plan.
SECTION 6
TERMS AND CONDITIONS OF OPTIONS
-------------------------------
(a) Term of Option. The term of each Option shall be ten (10) years from
--------------
the Date of Grant or such shorter term as may be determined by the Committee;
provided, however, in the case of an ISO granted to a Ten-Percent Shareholder,
the term of such ISO shall be five (5) years from the Date of Grant or such
shorter time as may be determined by the Committee.
(b) Exercise Price and Method of Payment.
------------------------------------
(i) Exercise Price. The Exercise Price shall be such price as is
--------------
determined by the Committee in its sole discretion and set forth in the Stock
Option Agreement; provided, however, in the case of an ISO granted to any
Optionee and a Nonstatutory Option to an Optionee who is also a Covered
Employee, the Exercise Price shall not be less than 100% of the Fair Market
Value of the Shares subject to such Option on the Date of Grant (or 110% in the
case of an ISO granted to a Participant who is a Ten-Percent Shareholder on the
Date of Grant).
(ii) Payment of Shares. Payment for the Shares upon exercise of an
-----------------
Option shall be made in cash, by certified check, or if authorized by the
Committee, by delivery of other Shares having a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Shares as to which said
Option is being exercised, or by any combination of such methods of payment or
by any other method of payment as may be permitted under applicable law and this
Plan and authorized by the Committee under Section 3(c) of this Plan.
------------
(c) Exercise of Option.
------------------
7
<PAGE>
(i) Procedure for Exercise; Rights of Shareholder. Any Option
---------------------------------------------
granted hereunder shall be exercisable at such times under such conditions as
shall be determined by the Committee including, without limitation performance
criteria with respect to the Company and/or the Optionee and in accordance with
the terms of this Plan. To the extent that Options granted hereunder are ISOs,
the Committee shall designate such Options as ISOs in the written instrument
evidencing such Option. If the written instrument does not designate the Options
as ISOs, then the Option shall be a Nonstatutory Option.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Stock
Option Agreement by the Optionee entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Committee,
consist of any form of consideration and method of payment allowable under
Section 6(b)(ii) of this Plan. Upon the receipt of notice of exercise and full
----------------
payment for the Shares, the Shares shall be deemed to have been issued and the
Optionee shall be entitled to receive such Shares and shall be a shareholder
with respect to such Shares, and the Shares shall be considered fully paid and
nonassessable. No adjustment will be made for a dividend or other right for
which the record date is prior to the date on which the stock certificate is
issued, except as provided in Section 9 of this Plan.
---------
Each exercise of an Option shall reduce, by an equal number, the total
number of Shares that may thereafter be purchased under such Option.
(ii) Termination of Status as an Employee or Consultant. Except as
--------------------------------------------------
provided in Subsections 6(c)(iii) and 6(c)(iv) below, an Optionee holding an
---------------------- --------
Option who ceases to be an Employee, a Consultant or a director of the Company
may, but only until the earlier of the date (x) the Option held by the Optionee
expires, or (y) thirty (30) days after the date such Optionee ceases to be an
Employee, a Consultant or a director, exercise the Option to the extent that the
Optionee was entitled to exercise it on such date; provided, however, that in
the event the Optionee is an Employee and is terminated without cause (as
determined in the sole discretion of the Committee) then the thirty (30) day
period described in this sentence shall be automatically extended to ninety (90)
days (and in the case of a Nonstatutory Option, such period shall be
automatically extended to six (6) months), unless the Committee further extends
such period in its sole discretion. To the extent that the Optionee was not
entitled to exercise an Option on such date, or if the Optionee does not
exercise it within the time specified herein, such Option shall terminate. The
Committee shall have the authority to determine the date an Optionee ceases to
be an Employee, a Consultant or a director.
(iii) Permanent and Total Disability. Notwithstanding the provisions
------------------------------
of Section 6(c)(ii) above, in the event an Optionee is unable to continue to
----------------
perform Services for the Company or any of its Subsidiaries as a result of such
Optionee's Permanent and Total Disability (and, for ISOs, at the time such
Permanent and Total Disability begins, the Optionee was an Employee and had been
an Employee since the Date of Grant), such Optionee may exercise an Option in
whole or in part notwithstanding that such Option may not be fully exercisable,
but
8
<PAGE>
only until the earlier of the date (x) the Option held by the Optionee expires,
or (y) twelve (12) months from the date of termination of Services due to such
Permanent and Total Disability. To the extent the Optionee is not entitled to
exercise an Option on such date or if the Optionee does not exercise it within
the time specified herein, such Option shall terminate.
(iv) Death of an Optionee. Upon the death of an Optionee, any Option
--------------------
held by an Optionee shall terminate and be of no further effect; provided,
however, notwithstanding the provisions of Section 6(c)(ii) above, in the event
----------------
an Optionee's death occurs during the term of an Option held by such Optionee
and, at the time of death, the Optionee was an Employee, Consultant or, director
(and, for ISOs, the Optionee had been an Employee since the Date of Grant), the
Option may be exercised in whole or in part notwithstanding that such Option may
not have been fully exercisable on the date of the Optionee's death, but only
until the earlier of the date (x) the Option held by the Optionee expires, or
(y) twelve (12) months from the date of the Optionee's death, by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance. To the extent the Option is not entitled to be exercised on
such date or if the Option is not exercised within the time specified herein,
such Option shall terminate.
(d) Non-Transferability of Options. Except as may be permitted by the
------------------------------
Committee in its sole discretion, any Option granted under this Plan may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder, and is not
assignable by operation of law or subject to execution, attachment or similar
process. During the Optionee's lifetime, any Option granted under this Plan can
only be exercised by such Optionee. Any attempted sale, pledge, assignment,
hypothecation or other transfer of the Option contrary to the provisions hereof
and the levy of any execution, attachment or similar process upon the Option
shall be null and void and without force or effect. No transfer of the Option
by will or by the laws of descent and distribution shall be effective to bind
the Company unless the Company shall have been furnished written notice thereof
and an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Option. The terms of any Option transferred by will or by the laws of descent
and distribution shall be binding upon the executors, administrators, heirs and
successors of Optionee.
(e) Time of Granting Options. Any Option granted hereunder shall be deemed
------------------------
to be granted on the Date of Grant. Written notice of the Committee's
determination to grant an Option to a Participant, evidenced by a Stock Option
Agreement, dated as of the Date of Grant, shall be given to such Participant
within a reasonable time after the Date of Grant.
(f) Modification, Extension and Renewal of Options. Within the limitations
----------------------------------------------
of this Plan, the Committee may modify, extend or renew outstanding Options or
may 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 the Optionee's rights or obligations
under such Option; provided that the Committee may, in its sole discretion, and
9
<PAGE>
without the consent of the Optionee or any other person, reduce the exercise
price of all or any part of any Option or accelerate the vesting of all or part
of any Option.
(g) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
----------------------------------
an Option shall be subject to such rights of repurchase and other transfer
restrictions as the Committee may determine in its sole discretion. Such
restrictions shall be set forth in the applicable Stock Option Agreement.
(h) Special Limitation on ISOs. To the extent that the aggregate Fair
--------------------------
Market Value (determined on the Date of Grant) of the Shares with respect to
which ISOs are exercisable for the first time by an individual during any
calendar year under this Plan, and under all other plans maintained by the
Company, exceeds $100,000, such Options shall be treated as Nonstatutory
Options.
(i) Leaves of Absence. Leaves of absence approved by the Committee which
-----------------
conform to the policies of the Company shall not be considered termination of
employment until the employer-employee relationship, as defined under the Code
or the regulations promulgated thereunder, ends or, if earlier, the leave of
absence period expires and the individual fails to return to active employment
with the Company.
(j) Limitation on Grants of Plan Awards to Covered Employees. The total
--------------------------------------------------------
number of Shares for which Options may be granted and which may be awarded as
Restricted Stock to any Covered Employee during any calendar year period shall
not exceed twenty-five percent (25%) of the Plan Maximum in the aggregate.
(k) Disqualifying Dispositions. The Stock Option Agreement evidencing any
--------------------------
ISO granted under this Plan shall provide that if the Optionee makes a
disposition, within the meaning of Section 425(c) of the Code and the
regulations promulgated thereunder, of any share or shares issued to him
pursuant to the exercise of the ISO within the two-year period commencing on the
day after the Date of Grant of such Option or within a one-year period
commencing on the day after the date of transfer of the share or shares to him
pursuant to the exercise of such Option, he shall, within ten days of such
disposition, notify the Company thereof and immediately deliver to the Company
any amount of federal income tax withholding required by law.
(l) Withholding Taxes. The Committee shall require an Optionee to pay to
-----------------
the Company at the time of exercise of an Option the amount that the Company
deems necessary to satisfy its obligation to withhold federal, state or local
income or other taxes incurred by reason of the exercise. Upon the exercise of
an Option requiring tax withholding, an Optionee may either pay such taxes in
cash or make a written election to have Shares withheld by the Company from the
shares otherwise to be received by the Optionee. The acceptance of any such
election by an Optionee shall be at the sole discretion of the Committee. In
addition, the Committee may require the Company to withhold Shares from the
Shares otherwise to be received by an Optionee upon exercise of an option. The
number of Shares withheld pursuant to this paragraph shall have an aggregate
Fair Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.
10
<PAGE>
(m) Return of Proceeds.
------------------
(i) The Committee, in its discretion, may include as a term of
any Optionee's stock option agreement a provision that, if within one year after
ceasing to be an Employee or Consultant (whether voluntarily or involuntarily),
an Optionee shall, directly or indirectly, engage in an activity that competes
with the business of the Company or a Subsidiary as conducted at the time the
Optionee ceased to be an Employee or Consultant (as determined by the Board of
Directors in its sole discretion and good faith) and such Optionee had exercised
Options within six months before or after the date the Optionee ceased to be an
Employee or Consultant, the Optionee shall be required to remit to the Company
in good funds within 5 business days of receipt of written demand therefore an
amount equal to the excess of (A) the Fair Market Value per share of Stock on
the date of exercise of such Option(s) multiplied by the number of shares with
respect to which the Options were exercised over (B) the aggregate option
exercise price for such number of shares of Stock (the "Proceeds").
(ii) The Committee, in its discretion, may include as a term of
any Optionee's stock option agreement a provision requiring the remittance by an
Optionee to the Company in good funds within 5 business days of receipt of
written demand therefore of Proceeds by an Optionee that has exercised Options
within six months before or after the date the Optionee ceased to be an Employee
or Consultant (whether voluntarily or involuntarily). The Committee shall have
the authority in its discretion to include such other conditions and/or terms in
an Optionee's stock option agreement that it deems appropriate or desirable in
furtherance of the foregoing provisions.
(n) Grants of Options to Non-Employee Directors. Subject to the terms and
-------------------------------------------
conditions of this Section 6(n), each Non-Employee Director of the Company
shall, subject to the terms of the Plan, be granted on his or her appointment to
the Board of Directors or on the approval of this Plan by the stockholders of
the Company, whichever occurs later, a grant of Options to purchase 100,000
Shares. Unless otherwise provided in the applicable Stock Option Agreement,
each Option granted pursuant to this Section 6(n) shall become exercisable as to
one-twelfth of the Shares subject to Options at the end of each full calendar
quarter following the date of grant of the Options, beginning with the end of
the first full calendar quarter following the date of grant of the Option, and
would have an exercise price per share equal to the Fair Market Value of the
Stock on the date of grant; provided, however, that such Non-Employee Director
must be serving as a Non-Employee Director of the Company on the last day of
such quarter for such option to vest.
SECTION 7
RESTRICTED STOCK
----------------
(a) Authority to Grant Restricted Stock. The Committee shall have the
-----------------------------------
authority to grant to Participants Shares that are subject to certain terms,
conditions and restrictions (the "Restricted Stock"). The Restricted Stock may
be granted by the Committee either separately or in combination with Options.
The terms, conditions and restrictions of the Restricted Stock shall be
determined from time to time by the Committee without limitation, except as
otherwise
11
<PAGE>
provided in this Plan; provided, however, that each grant of Restricted Stock
shall require the Participant to remain an Employee of (or otherwise provide
Services to) the Company or any of its Subsidiaries for at least six (6) months
from the Date of Grant. The granting, vesting and issuing of the Restricted
Stock shall also be subject to the following provisions:
(i) Nature of Grant. Restricted Stock shall be granted to
---------------
Participants for Services rendered and at no additional cost to Participant;
provided, however, that the value of the Services performed must, in the opinion
of the Committee, equal or exceed the par value of the Restricted Stock to be
granted to the Participant.
(ii) Restricted Stock Account. The Company shall establish a
------------------------
restricted stock account (the "Restricted Stock Account") for each Participant
to whom Restricted Stock is granted, and such Restricted Stock shall be credited
to such account. No certificates will be issued to the Participant with respect
to the Restricted Stock until the Vest Date as provided herein. Every credit of
Restricted Stock under this Plan to a Restricted Stock Account shall be
considered "contingent" and unfunded until the Vest Date. Such contingent
credits shall be considered bookkeeping entries only, notwithstanding the
"crediting" of "dividends" as provided herein. Such accounts shall be subject
to the general claims of the Company's creditors. The Participant's rights to
the Restricted Stock Account shall be no greater than that of a general creditor
of the Company. Nothing contained herein shall be construed as creating a trust
or fiduciary relationship between the Participants and the Company, the Board of
Directors or the Committee.
(iii) Restrictions. The terms, conditions and restrictions of the
------------
Restricted Stock shall be determined by the Committee on the Date of Grant. The
Restricted Stock may not be sold, assigned, transferred, redeemed, pledged or
otherwise encumbered during the period in which the terms, conditions and
restrictions apply (the "Restriction Period"). More than one grant of
Restricted Stock may be outstanding at any one time, and the Restriction Periods
may be of different lengths. Receipt of the Restricted Stock is conditioned
upon satisfactory compliance with the terms, conditions and restrictions of this
Plan and those imposed by the Committee, which may include the achievement of
any Performance Goals established by the Committee.
(iv) Restricted Stock Criteria. At the time of each grant of
-------------------------
Restricted Stock, the Committee in its sole discretion may establish certain
criteria to determine the times at which restrictions placed on Restricted Stock
shall lapse (i.e., the termination of the Restriction Period), which criteria
may include without limitation performance measures and targets (which may
include any Performance Goals established by the Committee) and/or holding
period requirements (the "Restricted Stock Criteria"). The Committee may
establish a corresponding relationship between the Restricted Stock Criteria and
(x) the number of Shares of Restricted Stock that may be earned, and (y) the
extent to which the terms, conditions and restrictions on the Restricted Stock
shall lapse. Restricted Stock Criteria may vary among grants of Restricted
Stock; provided, however, that once the Restricted Stock Criteria are
established for a grant of Restricted Stock, the Restricted Stock Criteria shall
not be modified with respect to such grant.
(v) Vesting. On the date the Restriction Period terminates, the
-------
Restricted Stock shall vest in the Participant (the "Vest Date"), who may then
require the Company to issue
12
<PAGE>
certificates evidencing the Restricted Stock credited to the Restricted Stock
Account of such Participant.
(vi) Dividends. The Committee may provide from time to time that
---------
amounts equivalent to dividends shall be payable with respect to the Restricted
Stock held in the Restricted Stock Account of a Participant. Such amounts shall
be credited to the Restricted Stock Account and shall be payable to the
Participant on the Vest Date.
(vii) Termination of Services. If a Participant (x) with the consent
-----------------------
of the Committee, ceases to be an Employee of, or otherwise ceases to provide
Services to, the Company or any of its Subsidiaries, or (y) dies or suffers from
Permanent and Total Disability, the vesting or forfeiture (including without
limitation the terms, conditions and restrictions) of any grant under this
Section 7 shall be determined by the Committee in its sole discretion, subject
---------
to any limitations or terms of this Plan. If the Participant ceases to be an
Employee of, or otherwise ceases to provide Services to, the Company or any of
its Subsidiaries for any other reason, all grants of Restricted Stock under this
Plan shall be forfeited (subject to the terms of this Plan).
(viii) Certificates. The Committee may legend the certificates
------------
representing the Restricted Stock to give appropriate notice of the applicable
terms, conditions and restrictions thereof, as well as any applicable
restrictions under applicable Federal or state securities laws, and may deposit
such certificates with the Secretary of the Company pending vesting of the
Restricted Stock.
(b) Deferral of Payments.
--------------------
The Committee may establish procedures by which a Participant may elect
to defer the transfer of Restricted Stock to the Participant. The Committee
shall determine the terms and conditions of such deferral in its sole
discretion.
SECTION 8
ISSUANCE OF SHARES
------------------
As a condition to the transfer of any Shares issued under this Plan, the
Company may require an opinion of counsel, satisfactory to the Company, to the
effect that such transfer will not be in violation of the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable securities
laws, rules or regulations, or that such transfer has been registered under
federal and all applicable state securities laws. The Company may refrain from
delivering or transferring Shares issued under this Plan until: (1) the
Committee has determined that the Participant has tendered to the Company any
and all applicable federal, state or local tax owed by the Participant as the
result of the receipt of a Plan Award, the exercise of an Option or the
disposition of any Shares issued under this Plan, in the event that the Company
reasonably determines that it might have a legal liability to satisfy such tax,
(2) the Company has determined that all applicable listing requirements of any
stock exchange or quotation system on which the Shares are listed have been
satisfied, and (3) the Company has determined that any other applicable
provision of state or federal law, including without limitation applicable state
13
<PAGE>
securities laws, has been satisfied. The Company shall not be liable to any
person or entity for damages due to any delay in the delivery or issuance of any
stock certificate evidencing any Shares for any reason whatsoever.
SECTION 9
CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
-----------------------------------------------------
(a) Adjustments Upon Changes in Capitalization. Subject to any required
------------------------------------------
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, the aggregate number of Shares that have been authorized for
issuance under this Plan and the number of Shares of Restricted Stock credited
to any Restricted Stock Account of a Participant (as well as the Exercise Price
covered by any outstanding Option), shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, payment of a stock dividend with respect to the Stock or any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company. Such adjustment shall be made by the Committee in
its sole discretion, which adjustment shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of 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 an Option.
(b) Dissolution, Liquidation, Sale of Assets or Merger. In the event of the
--------------------------------------------------
dissolution or liquidation of the Company, other than pursuant to a
Reorganization (hereinafter defined), any Option granted under the Plan shall
terminate as of a date to be fixed by the Committee, provided that not less than
30 days written notice of the date so fixed shall be given to each Optionee and
each such Optionee shall have the right during such period to exercise his
Options as to all or any part of the Shares covered thereby including Shares as
to which such Options would not otherwise be exercisable by reason of an
insufficient lapse of time.
In the event of a Reorganization, then, as a condition of such
Reorganization, lawful and fair provision shall be made whereby the Option
holders shall thereafter have the right to purchase and receive, upon the basis
and upon the terms and conditions specified in the Plan and the stock option
agreements and in lieu of the shares of Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, such shares of stock, securities, or assets as may be
issued or payable with respect to or in exchange for the number of outstanding
shares of such Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by such Options, had such Reorganization not taken place, and in
such event appropriate provision shall be made with respect to the rights and
interests of the Option holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the exercise price
and of the number of shares purchasable upon the exercise of such Options) shall
thereafter be applicable, as nearly as may be in relation to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof.
The term "Reorganization" as used in this Subsection 9(b) shall mean any
---------------
merger, consolidation, sale of all or substantially all of the assets of the
Company, sale, pursuant to an agreement with the Company, of securities of the
Company pursuant to which the Company is or
14
<PAGE>
becomes a wholly-owned subsidiary of another company after the effective date of
the Reorganization, or other similar event.
(c) Limitation on Rights of Optionee. Except as expressly provided in this
--------------------------------
Section 9, no Optionee shall have any rights by reason of any payment of any
stock dividend, stock split or reverse stock split or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
reorganization, consolidation, dissolution, liquidation, merger, exchange,
split-up or reverse split-up, or spin-off of assets or stock of another
corporation. Any issuance by the Company of Shares, Options or securities
convertible into Shares or Options shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of the
Shares for which an Option is exercisable. Notwithstanding the foregoing, if
the Company shall enter into a transaction affecting the Company's capital stock
or distributions to the holders of its capital stock for which a revision in the
terms of each Option is not required pursuant to this Section 9, the Committee
shall revise the terms of each Option in a manner the Committee deems fair and
reasonable in its sole discretion given the transaction involved. If necessary
or appropriate in connection with such transaction, the Committee may declare
that any Option shall terminate as of a date fixed by the Committee and give
each Optionee the right to exercise his or her Option in whole or in part,
including exercise as to shares of Stock to which the Option would not otherwise
be exercisable.
(d) Change in Control. Subject to Section 9(b), in the event there occurs
-----------------
a Change of Control, (i) the Optionees shall have the right to exercise from and
after the date of the Change in Control the Option held by such Optionee in
whole or in part notwithstanding that such Option may not be fully exercisable,
and (ii) any and all restrictions on any Restricted Stock credited to a
Restricted Stock Account shall lapse and such stock shall immediately vest in
the Participants notwithstanding that the Restricted Stock held in such account
was unvested.
(e) Stock Dividend; Distribution of Assets. In the event of a stock
--------------------------------------
dividend or other distribution of assets by the Company to the holders of the
Stock which is not covered by any provision of this Section 9, the Option
holders shall be entitled thereafter to receive upon exercise of the Option the
kind and amount of such distribution, whether cash, shares of stock or other
securities or assets, which the Option holder would have been entitled to
receive after the occurrence of such event had this Option been exercised
immediately prior to such event.
(f) No Restriction on Rights of Company. The grant of an Option shall not
-----------------------------------
affect or restrict in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure, or to merge or consolidate, or to dissolve, liquidate, sell,
or transfer all or any part of its business or assets.
SECTION 10
NO EMPLOYMENT RIGHTS
--------------------
No provision of this Plan, under any Stock Option Agreement or under any
grant of Restricted Stock shall be construed to give any Participant any right
to remain an Employee of, or provide Services to, the Company or any of its
Subsidiaries or to affect the right of the Company to terminate any
Participant's service at any time, with or without cause.
15
<PAGE>
SECTION 11
TERM OF PLAN; EFFECT OF AMENDMENT OR TERMINATION
------------------------------------------------
(a) Effective Date; Term of Plan. This Plan shall become effective as
----------------------------
determined by the Board of Directors, but no Options granted under this Plan
shall be exercised and no grants of Restricted Stock shall have their
restrictions lapse unless and until this Plan has been approved by the
stockholders of the Company, which approval shall be within twelve (12) months
before or after the date this Plan is adopted by the Board of Directors. This
Plan shall continue in effect for a term of ten (10) years unless sooner
terminated under this Section 11.
----------
(b) Amendment and Termination. The Board of Directors in its sole
-------------------------
discretion may terminate this Plan at any time. The Board of Directors may
amend this Plan at any time in such respects as the Board of Directors may deem
advisable; provided, that any change in the aggregate number of Shares that may
--------
be issued under this Plan, other than in connection with an adjustment under
Section 9 of this Plan, shall require approval of the holders of a majority of
---------
the outstanding Shares entitled to vote.
(c) Effect of Termination. In the event this Plan is terminated, no Shares
---------------------
shall be issued under this Plan, except upon exercise of an Option granted prior
to such termination or issuance of Shares of Restricted Stock previously
credited to a Restricted Stock Account. The termination of this Plan, or any
amendment thereof, shall not affect any Shares previously issued to a
Participant, any Option previously granted under this Plan or any Restricted
Stock previously credited to a Restricted Stock Account.
SECTION 12
GOVERNING LAW
-------------
THIS PLAN AND ANY AND ALL STOCK OPTION AGREEMENTS AND AGREEMENTS RELATING TO
THE GRANT OF RESTRICTED STOCK EXECUTED IN CONNECTION WITH THIS PLAN SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 13
OTHER
-----
(a) Rights of a Stockholder. The recipient of any award under the Plan,
-----------------------
unless otherwise provided by the Plan, shall have no rights as a stockholder
with respect thereto unless and until shares of Stock are issued to him.
(b) Indemnification. No member of the Board of Directors or the Committee,
---------------
nor any officer or employee of the Company or a Subsidiary acting on behalf of
the Board of Directors or the Committee, shall be personally liable for any
action, determination or interpretation taken or made in good faith with respect
to the Plan, and all members of the Board of Directors or the Committee and each
and any officer or employee of the Company or any Subsidiary acting on
16
<PAGE>
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.
(c) Nonuniform Determinations. The Committee's determinations under the
-------------------------
Plan (including without limitation determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing same, and the establishment of values
and performance targets) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.
(d) Severability. If any of the terms or provisions of this Plan, or awards
------------
made under this Plan, conflict with the requirements of Section 162(m) or
Section 422 of the Code with respect to awards subject to or governed by Section
162(m) or Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of Section
162(m) or Section 422 of the Code. With respect to an Incentive Stock Option,
if this Plan does not contain any provisions required to be included herein
under Section 422 of the Code (as the same shall be amended from time to time),
such provision shall be deemed to be incorporated herein with the same force and
effect as if such provision had been set out herein.
(e) Effect on Other Plans. Participation in this Plan shall not affect an
---------------------
employee's eligibility to participate in any other benefit or incentive plan of
the Company or any Subsidiary and any awards made pursuant to this Plan shall
not be used in determining the benefits provided under any other plan of the
Company or any Subsidiary unless specifically provided.
(f) Gender and Number. Words denoting the masculine gender shall include
-----------------
the feminine gender, and words denoting the feminine gender shall include the
masculine gender. Words in the plural shall include the singular, and the
singular shall include the plural.
(g) Acceleration of Exercisability and Vesting. The Committee shall have
------------------------------------------
the power to accelerate the time at which an award may first be exercised or the
time during which an award or any part thereof will vest in accordance with the
Plan, notwithstanding the provisions in the award stating the time at which it
may first be exercised or the time during which it will vest.
(h) No Strict Construction. No rule of strict construction shall be applied
----------------------
against the Company, the Committee, or any other person in the interpretation of
any of the terms of the Plan, any agreement executed in connection with the
Plan, any award granted under the Plan, or any rule, regulation or procedure
established by the Committee.
(i) Successors. This Plan is binding on and will inure to the benefit of
----------
any successor to the Company, whether by way of merger, consolidation, purchase,
or otherwise.
(j) Plan Provisions Control. The terms of the Plan govern all awards
-----------------------
granted under the Plan, and in no event will the Committee have the power to
grant any award under the Plan which is contrary to any of the provisions of the
Plan. In the event any provision of any award granted under the Plan shall
conflict with any term in the Plan, the term in the Plan shall control.
17
<PAGE>
(k) Headings. The headings used in the Plan are for convenience only, do
--------
not constitute a part of the Plan, and shall not be deemed to limit,
characterize, or affect in any way any provisions of the Plan, and all
provisions of the Plan shall be construed as if no captions had been used in the
Plan.
18
