EXHIBIT 4.1
CATALYST SOLUTIONS GROUP, INC.
1998 STOCK OPTION PLAN
(Adopted effective as of May 5, 1998)
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CATALYST SOLUTIONS GROUP, INC.
1998 STOCK OPTION PLAN
(Adopted effective as of May 5, 1998)
ARTICLE 1
INTRODUCTION
1.1. Plan/Purpose. CATALYST SOLUTIONS GROUP, INC. (the "Company") has
adopted the CATALYST SOLUTIONS GROUP, INC. 1998 STOCK OPTION PLAN (the "Plan")
to encourage ownership of the Company's common stock by its employees and
employees of its subsidiaries, to provide additional incentive for such
employees to promote the success of the business of the Company and its
subsidiaries, and to attract individuals to enter the employ of the Company and
its subsidiaries. It is expected that the added interest of the participating
employees under this Plan, and the proprietary attitude which results from their
investment in the Company's common stock, will promote the future growth,
development and continued success of the Company and its subsidiaries. In
addition, it is intended that options will be issued under this Plan to
officers, directors and consultants of the Company and its subsidiaries (or
affiliates of such persons) even though such persons may not be employees.
1.2. Type of Options. The Plan provides for the grant of options to
purchase common stock of the Company ("Options"). Options may be granted which
qualify for favorable tax treatment as under Section 422 of the Internal Revenue
Code of 1986, as amended ("Incentive Stock Options"), or which do not so qualify
("Nonqualified Stock Options").
1.3. Stock Subject to the Plan. An aggregate of 500,000 shares of $0.01 par
value common stock of the Company shall be reserved for issue upon the exercise
of Options granted under the Plan, which number represents approximately
fifty-five percent (55%) of the fully diluted shares of common stock of the
Company as of May 5, 1998. Shares reserved under the Plan may include whole or
fractional shares, as determined by the Board of Directors of the Company (the
"Board") in its sole discretion. If any Option is exercised, the Company may use
either authorized but unissued shares or shares held in treasury in lieu
thereof. If any Option expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject to such Option shall again be
available for the purposes of the Plan.
1.4. Effective Date/Shareholder Approval. The Plan shall become effective
as of May 5, 1998 (the "Effective Date"); provided, however, that no Option may
be exercised in whole or in part until this Plan is approved by the Board and
the shareholders of the Company.
1.5. Governing Law. The Plan shall be governed by the laws of the State of
Missouri, without regard to conflict of law principles.
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ARTICLE 2
ADMINISTRATION
2.1. Generally. The Plan shall be administered by the Board. Subject to the
express provisions of the Plan, the Board shall have the authority, in its sole
discretion, to determine the individuals to whom Options shall be granted, the
number of shares subject to each Option, the purchase price of the shares
subject to each Option, the time or times at which Options shall be granted and
the term and other conditions of each Option, and also to construe and interpret
the Plan, to make determinations in administration of the Plan, to make, amend
and rescind rules and regulations regarding the Plan and its administration, to
determine the terms and provisions of the respective stock option agreements
(which need not be identical), and to take whatever action is necessary to carry
out the purposes of the Plan. The Board's actions and determinations on matters
referred to in this Section shall be conclusive on all persons whomsoever.
2.2. Liability of Board Members. No act or failure to act on the part of
the Board or the Board, or on the. part of any member thereof, shall result in
any liability whatsoever if taken in good faith, and the Company shall indemnify
and hold harmless each member of the Board against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Board) arising out of any act or omission to act
in connection with the Plan, unless arising out of such person's own fraud or
bad faith.
ARTICLE 3
ELIGIBILITY TO RECEIVE OPTIONS
3.1. In General. An Option may be granted under the Plan to any full-time
employee of the Company or of any of its subsidiaries and to officers, directors
or consultants of the Company or any of its subsidiaries (but excluding any
other parties who are not common law employees). In making a determination as to
persons to whom Options shall be granted under the Plan, and the number of
shares to be covered by such Options, the Board shall take into consideration
the nature of the service rendered or to be rendered by the Optionee, the
Optionee's present and potential contributions to the success of the Company and
its subsidiaries, and such other factors as the Board shall deem relevant in
accomplishing the purposes of the Plan. Any and all determinations made by the
Board pursuant to this section shall be binding upon all persons.
3.2. Special Rule for 10% Shareholders. No Incentive Stock Option may be
granted under the Plan to any person who immediately before such Option is
granted owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its
subsidiaries unless at the time such Option is granted the Option price is at
least one-hundred and ten percent (110%) of the fair market value of the stock
subject to the Option, and such Option by its terms is not exercisable after the
expiration of five (5) years from the date such Option is granted. For the
purpose of this Section, an employee shall be deemed to own stock which is owned
by the employee's siblings, spouse, ancestors and lineal descendants.
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3.3. Multiple/Successive Options. An employee who has been granted an
Option under the Plan may be granted an additional Option or Options hereunder
at any time, if otherwise eligible under the provisions of the Plan. Successive
Option grants may be made to any holder of an Option under the Plan.
3.4. Options Conditioned on Future Employment. An Option may be granted to
an individual upon the condition that such individual will become an employee of
the Company or any of its subsidiaries or contingent upon the fulfillment of
other conditions, such as the Company's attainment of a specified level of
profitability; provided, however, that an Option conditioned on future
employment shall be deemed to have been granted only on the date such individual
becomes an employee.
3.5. Effect of Option Grant. Nothing contained in this Plan shall be
construed to limit the right of the Company to grant stock options otherwise
than under the Plan in connection with the employment of any person, the
acquisition of any corporation, firm or association, or the business or assets
thereof (including stock options granted to employees thereof who become
employees of the Company or a subsidiary), or other proper corporate purposes.
3.6 Investment Representations. The Company may in its discretion require
that an Optionee, as a condition to receiving stock pursuant to the exercise of
an Option, make certain representations regarding the status of such Optionee
and his investment intentions, and may place a legend on such Option, and on
certificates evidencing stock acquired upon exercise of such Option, to reflect
any transfer restriction that may be appropriate under federal or state
securities laws.
ARTICLE 4
TERMS AND CONDITIONS OF OPTIONS
4.1. Option Price. The purchase price of the stock subject to each Option
granted hereunder shall be determined by the Board, but, in the case of an
Incentive Stock Option, shall not be less than one hundred percent (100%) of the
fair market value of the stock at the time of the grant of the Option; provided,
however, that the purchase price of the stock subject to an Incentive Stock
Option granted to an employee who owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
shall be not less than that specified in Section 3.2. The Board shall adopt
criteria for the determination of the fair market value of stock subject to any
Option granted pursuant to this Plan.
4.2. Option Term. The term of each Option granted hereunder shall be
determined by the Board, but, in the case of an Incentive Stock Option, shall
not be more than ten (10) years from the date of granting thereof. The term of
an Incentive Stock Option granted to an employee who owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company shall be not more than that specified in Section 3.2.
Subject to the restrictions of Articles 6, 7 and 8, and any other restrictions
and conditions as the Board
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shall in each instance specify (which need not be uniform for all parties to
whom Options are granted), an Option shall be exercisable at any time within its
term.
4.3. Option Amount. The aggregate fair market value (determined as of the
time the Option is granted) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under all plans of the Company and its subsidiaries) shall not exceed one
hundred thousand dollars ($100,000).
4.4. Vesting. An Option granted under the Plan shall vest in accordance
with the terms of the agreement under which the individual Option is granted,
which terms shall be determined by the Board.
4.5. Transferability. An Option granted under the Plan, including the
exercise of the right to request payment in lieu of exercise of the Option
pursuant to Section 6.3, shall be non-transferable by the Optionee other than by
will or the laws of descent and distribution, and shall be exercisable during
the Optionee's lifetime only by the Optionee, unless the Optionee is under a
legal disability, in which case it may be exercised by the Optionee's duly
appointed legal representative.
ARTICLE 5
DATE OF GRANT AND ACCEPTANCE OF OPTION
5.1 Date of Grant. Subject to Section 3.4, the grant of an Option under the
Plan shall take place on or as of the date the Board grants an employee a
particular Option; provided, however, that if the resolution or other written
determination of the Board specifies that an Option is to be granted as of and
at some future date, the date of grant shall be such future date.
5.2 Acceptance of Option. Within ten business days after the grant of an
Option, the Company shall notify the Optionee of the grant of the Option and
shall mail or otherwise deliver to the Optionee a Stock Option Agreement, duly
executed on behalf of the Company, with the request that the Optionee execute
such Agreement within thirty days after the date of mailing, or other delivery,
by the Company to the Optionee. If the Optionee shall fail to execute and return
to the Company such Agreement within such thirty-day period, the Option granted
pursuant to the Agreement shall be automatically terminated.
ARTICLE 6
EXERCISE OF OPTIONS
6.1. In General. Except as provided in Article 7, and unless otherwise
provided in the terms of the agreement under which the Option is granted, each
Option shall be exercisable in whole or in part only on the first day of the
fiscal year of the Company; provided, however, that an Option shall not be
exercisable prior to the time the Option vests in accordance with Section 4.4.
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6.2. Manner of Exercise. To the extent that the right to purchase shares
under an Option is exercisable, the right may be exercised from time to time by
written notice to the Company stating the number and identity of shares with
respect to which the Option is being exercised, accompanied by payment either
(i) in cash, (ii) in the discretion of the Board, by tender to the Company of
shares of the common stock of the Company, owned by the Optionee and registered
in the Optionee's name, having a fair market value equal to the cash exercise
price of the Option being exercised, or (iii) in the discretion of the Board, by
any combination of (i) and (ii) hereof. The fair market value of stock tendered
as payment shall be determined according to the criteria for determining fair
market value adopted by the Board or as may be required in order to comply with
or to conform to the requirements of any applicable laws or regulations.
6.3. Cash Payment Option. An Optionee may, instead of exercising an Option
in the manner specified in Section 6.2, request that the Board authorize the
payment to the Optionee of the difference between the fair market value of part
or all of the stock which is the subject of the Option and the exercise price of
the Option, such differences to be determined as of the close of business on the
date the Board receives the request from the Optionee. The Board in its sole
discretion may grant such a request from an Optionee with respect to part or all
of the shares of stock as to which the Option is then exercisable and, to the
extent granted, shall direct the Company to make payment to the Optionee either
in cash or in common stock of the Company or in any combination thereof,
provided, however, that any common stock of the Company shall be distributed
based upon its fair market value as of the close of business on the date the
Board received the request from the Optionee. An Option shall be deemed to have
been exercised and shall be cancelled to the extent that the Board grants a
request pursuant to this Section.
6.4. Effect on Company Books. The proceeds of sale of stock subject to an
Option shall be added to the capital stock account of the Company to the extent
of the par value of the shares and the excess to the account reflecting capital
in excess of par. In the case of payments made in shares of common stock of the
Company, such shares evidencing payment shall be added to the common stock of
the Company held in its treasury and used for corporate purposes as the Board
shall determine, with appropriate credits to the capital stock accounts of the
Company.
6.5. Delivery of Certificates. After the exercise of an Option, as above
provided, the Company shall, within a reasonable time, deliver to the person
exercising the Option a certificate or certificates issued in the name of the
person who exercised the Option and such additional name, or names, if any, as
may be requested (subject to the general policy of the Company as to
registration of shares), for the appropriate number of shares, without liability
to the person exercising the Option for any transfer or issue tax, state or
federal, then payable. Each Option granted under the Plan shall be subject to
the requirement that, if at any time the Board shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such Option upon any securities exchange or under any state or
Federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable, as a condition of, or in connection with, the granting
of such Option or the issue or purchase of shares thereunder, no such Option may
be exercised in whole or in part unless such listing, registration,
qualification,
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consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors.
6.6. Rights as Stockholder. An Optionee shall have no rights as a
stockholder with respect to any shares covered by an Option except to the extent
that one or more certificates for shares shall have been delivered to him upon
due exercise of an Option as above provided.
6.7 Agreements Regarding Withholding Taxes. If the Board shall so require,
as a condition of exercise, each Optionee shall agree that no later than the
date of exercise of any Option, the Optionee will pay to the Company or make
arrangements satisfactory to the Board regarding payment of any federal, state,
or local taxes of any kind required by law to be withheld upon the exercise of
such Option. In its discretion, the Board may provide for the Company's
acceptance or retention of stock as payment to the Company for tax required to
be withheld by the Company.
ARTICLE 7
DEATH OF OPTIONEE
If an Optionee dies while an employee of the Company or a subsidiary, the
shares which the Optionee was entitled to purchase on the date of the Optionee's
death under an Option or Options may be purchased at any time after the
Optionee's death by the person or persons to whom said right under the Option or
Options shall have passed by the Optionee's will or by the applicable laws of
descent and distribution. In no event shall any Option be or become exercisable
after the expiration date thereof.
ARTICLE 8
EFFECT OF MERGER, CHANGE IN CAPITALIZATION, ETC.
8.1. Reclassifications, Etc. In the event of any reclassification or
increase or decrease in the number of the issued shares of common stock of the
Company by reason of the payment of a stock dividend, a split-up or
consolidation of shares, a recapitalization, a combination or exchange of shares
or any like capital adjustment, then (i) the aggregate number, and the class, of
shares reserved under the Plan shall be as though the shares reserved had been
outstanding prior to any adjustment as aforesaid, and (ii) as to any outstanding
unexercised Options theretofore granted under the Plan, there shall be a
corresponding adjustment as to the class and number of shares covered by each
Option, and as to the purchase price under each Option, to the end that the
Optionee's proportionate interest shall be maintained as before the occurrence
of such event without change in the total purchase price applicable to said
Option.
8.2. Reorganization, Etc. In the event the Company approves a plan of
reorganization or of merger into or consolidation with any other corporation,
the unexercised portion of each Option then outstanding under the Plan shall
thereafter apply to such number and kind of securities as would have been
issuable by reason of such reorganization, merger or consolidation to a holder
of the number of shares which were subject to the Option immediately prior to
such
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reorganization, merger or consolidation, without change in the total purchase
price applicable to said Option, and such Options shall continue under the Plan.
8.3. Issuance of Additional Stock. In the event the Company shall issue
additional capital stock of any class for cash or other consideration, there
shall be no adjustment in the number of shares covered by outstanding Options
under the Plan, and no adjustment in the purchase price under such Options.
ARTICLE 9
TERMINATION AND AMENDMENT OF THE PLAN
9.1. Amendment/Termination. This Plan shall terminate on the date which is
ten (10) years from the Effective Date, and no Option shall be granted hereunder
after said date, but such termination shall not affect any Option theretofore
granted. The Board may at any time terminate the Plan or make such amendments to
the Plan as it shall deem advisable and in the best interests of the Company
without further action on the part of the shareholders of the Company; provided,
however, that the Board May not, without approval by (a) the holders of all
Options outstanding, and (b) the shareholders of the Company (if required by
applicable law), change the maximum number of shares for which Options may be
granted under the Plan, the minimum Option price, the maximum periods during
which Options may be granted or exercised, or the provisions relating to the
eligibility of employees to whom Options may be granted and to the eligibility
of members of the Board.
9.2. Effect on Outstanding Options. Subject to the other provisions of the
Plan, no termination or amendment of the Plan may, without the consent of the
Optionee under an Option then outstanding, terminate such Option or materially
and adversely affect the rights of the Optionee thereunder.
CATALYST SOLUTIONS GROUP, INC.
By
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Name: Richard S. Waidmann
Title: President
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