i
EXHIBIT 99
LEVEL 8 SYSTEMS, INC.
2000 STOCK GRANT RETENTION PLAN
TABLE OF CONTENTS
SECTION 1. DEFINITIONS 1
1.1 Definitions 1
SECTION 2 THE STOCK INCENTIVE PLAN 2
2.1 Purpose of the Plan 2
2.2 Stock Subject to the Plan 2
2.3 Administration of the Plan 2
SECTION 3 TERMS OF STOCK INCENTIVES 3
3.1 Terms and Conditions of All Stock Awards 3
3.2 Terms and Conditions of Stock Awards. 3
SECTION 4 GENERAL PROVISIONS 3
4.1 Withholding. 3
4.2 Changes in Capitalization; Merger; Liquidation. 4
4.3 Right to Terminate Employment. 4
4.4 Non-Alienation of Benefits. 4
4.5 Restrictions on Delivery and Sale of Shares; Legends 4
4.6 Listing and Legal Compliance 5
4.7 Termination and Amendment of the Plan. 5
4.8 Choice of Law. 5
4.9 Effective Date of Plan 5
<PAGE>
LEVEL 8 SYSTEMS, INC.
2000 STOCK GRANT RETENTION PLAN
SECTION 1. DEFINITIONSI. DEFINITIONS
1.1 Definitions1.1 Definitions. Whenever used herein, the
----------- -----------
masculine pronoun will be deemed to include the feminine, and the singular to
include the plural, unless the context clearly indicates otherwise, and the
following capitalized words and phrases are used herein with the meaning
thereafter ascribed:
(a) "Board of Directors" means the board of directors of the Company.
--------------------
(b) "Code" means the Internal Revenue Code of 1986, as amended.
----
(c) "Committee" means the committee appointed by the Board of Directors to
---------
administer the Plan. If the Committee has not been appointed, the Compensation
Committee of the Board of Directors shall constitute the Committee.
(d) "Company" means Level 8 Systems, Inc., a Delaware corporation.
-------
(e) "Fair Market Value" with regard to a date means:
-------------------
(1) the price at which Stock shall have been sold on that date or the last
trading date prior to that date as reported by the national securities exchange
selected by the Committee on which the shares of Stock are then actively traded
or, if applicable, as reported by the NASDAQ Stock Market.
(2) if such market information is not published on a regular basis, the
price of Stock in the over-the-counter market on that date or the last business
day prior to that date as reported by the NASDAQ Stock Market or, if not so
reported, by a generally accepted reporting service.
(3) if Stock is not publicly traded, as determined in good faith by the
Committee with due consideration being given to (i) the most recent independent
appraisal of the Company, if such appraisal is not more than twelve months old
and (ii) the valuation methodology used in any such appraisal.
For purposes of Paragraphs (1), (2), or (3) above, the Committee may use the
closing price as of the applicable date, the average of the high and low prices
as of the applicable date or for a period certain ending on such date, the price
determined at the time the transaction is processed, the tender offer price for
shares of Stock, or any other method which the Committee determines is
reasonably indicative of the fair market value.
(f) "Participant" means an individual who receives a Stock Award hereunder.
-----------
(g) "Plan" means the Level 8 Systems, Inc. 2000 Stock Grant Retention Plan.
----
(h) "Stock" means Company's common stock.
-----
(i) "Stock Award" means a stock award described in Section 3.
------------
(j) "Stock Award Agreement" means an agreement between the Company and a
-----------------------
Participant or other documentation evidencing an award of a Stock Award.
(k) "Stock Award Program" means a written program established by the
---------------------
Committee, pursuant to which Stock Awards are awarded under the Plan under
uniform terms, conditions and restrictions set forth in such written program.
(l) "Termination of Employment" means the termination of the
---------------------------
employee-employer relationship between a Participant and the Company, regardless
------
of whether severance or similar payments are made to the Participant for
any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, Disability or retirement. The Committee will, in
its absolute discretion, determine the effect of all matters and questions
relating to a Termination of Employment, including, but not by way of
limitation, the question of whether a leave of absence constitutes a Termination
of Employment.
<PAGE>
SECTION 2 THE STOCK INCENTIVE PLAN2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan2.1 Purpose of the Plan. The Plan is
---------------------- ----------------------
intended to reward, and Stock Awards may only be granted to, certain employees
of the Company who formerly worked for StarQuest Software, Inc. and became
employees of the Company.
2.2 Stock Subject to the Plan2.2 Stock Subject to the Plan.
----------------------------- -----------------------------
Subject to adjustment in accordance with Section 4.2, fifty thousand (50,000)
shares of Stock (the "Maximum Plan Shares") are hereby reserved exclusively for
issuance upon exercise or payment pursuant to Stock Awards.
2.3 Administration of the Plan2.3 Administration of the Plan. The
--------------------------- --------------------------
Plan is administered by the Committee. The Committee has full authority in its
discretion to determine the employees of the Company to whom Stock Awards will
be granted and the terms and provisions of Stock Awards, subject to the Plan.
Subject to the provisions of the Plan, the Committee has full and conclusive
authority to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Stock Award Agreements and to make all other determinations necessary
or advisable for the proper administration of the Plan. The Committee's
determinations under the Plan 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). The Committee's
decisions are final and binding on all Participants.
<PAGE>
SECTION 3 TERMS OF STOCK AWARDS3 TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Awards3.1 Terms and
---------------------------------------------- ----------
Conditions of All Stock Awards.
-------------------------
(a) The Committee shall decide in its sole discretion how many shares
of Stock to grant to each eligible employee.
(b) Each Stock Award will be evidenced by a Stock Award Agreement in
such form and containing such terms, conditions and restrictions as the
Committee may determine to be appropriate, including without limitation,
performance goals that must be achieved as a condition to vesting or payment of
the Stock Award, or be made subject to the terms of a Stock Award Program,
containing such terms, conditions and restrictions as the Committee may
determine to be appropriate, including without limitation, performance goals
that must be achieved as a condition to vesting or payment of the Stock Award.
Each Stock Award Agreement or Stock Award Program is subject to the terms of the
Plan and any provisions contained in the Stock Award Agreement or Stock Award
Program that are inconsistent with the Plan are null and void.
(c) The date a Stock Award is granted will be the date on which the
Committee has approved the terms and conditions of the Stock Award and has
determined the recipient of the Stock Award and the number of shares covered by
the Stock Award, and has taken all such other actions necessary to complete the
grant of the Stock Award.
3.2 Terms and Conditions of Stock Awards.3.2 Terms and Conditions
-------------------------------------- --------------------
of Stock Awards. The number of shares of Stock subject to a Stock Award and
----------------
restrictions or conditions on such shares, if any, will be as the Committee
--
determines, and the certificate for such shares will bear evidence of any
--
restrictions or conditions. Subsequent to the date of the grant of the Stock
--
Award, the Committee has the power to permit, in its discretion, an acceleration
-
of the expiration of an applicable restriction period with respect to any part
or all of the shares awarded to a Participant.
SECTION 4 GENERAL PROVISIONS5 GENERAL PROVISIONS
4.1 Withholding.
The Company must deduct from all cash distributions under the Plan any taxes
required to be withheld by federal, state or local government. Whenever the
Company proposes or is required to issue or transfer shares of Stock under the
Plan or upon the vesting of any Stock Award, the Company has the right to
require the recipient to remit to the Company an amount sufficient to satisfy
any federal, state and local tax withholding requirements prior to the delivery
of any certificate or certificates for such shares or the vesting of such Stock
Award. A Participant may pay the withholding obligation in cash, or, if the
applicable Stock Award Agreement or Stock Award Program provides, a Participant
may elect to have the number of shares of Stock he is to receive reduced by, or
with respect to a Stock Award, tender back to the Company, the smallest number
of whole shares of Stock which, when multiplied by the Fair Market Value of the
shares of Stock determined as of the Tax Date (defined below), is sufficient to
satisfy federal, state and local, if any, withholding obligation arising from
exercise or payment of a Stock Award (a "Withholding Election"). A Participant
may make a Withholding Election only if both of the following conditions are
met:
(a) The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the "Tax Date")
by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable except on six
months advance written notice delivered to the Company; however, the Committee
may in its sole discretion disapprove and give no effect to the Withholding
Election.
<PAGE>
4.2 Changes in Capitalization; Merger; Liquidation.
-------------------------------------------------
(a) The number of shares of Stock reserved for the grant of Stock
Awards must be proportionately adjusted for any increase or decrease in the
number of issued shares of Stock resulting from a subdivision or combination of
shares or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.
(b) The existence of the Plan and the Stock Awards granted pursuant to
the Plan must not affect in any way the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Stock or the rights thereof, the dissolution or liquidation of the Company,
any sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding.
4.3 Right to Terminate Employment.
--------------------------------
Nothing in the Plan or in any Stock Award confers upon any Participant the right
to continue as an employee or officer of the Company or any of its Affiliates or
affect the right of the Company or any of its Affiliates to terminate the
Participant's employment or services at any time.
4.4 Non-Alienation of Benefits.
----------------------------
Other than as provided herein, no benefit under the Plan may be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
may, prior to receipt by the Participant, be in any manner liable for or subject
to the debts, contracts, liabilities, engagements or torts of the Participant.
4.5 Restrictions on Delivery and Sale of Shares; Legends.
------------------------------------------------------------
Each Stock Award is subject to the condition that if at any time the Committee,
in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Award upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Stock Award or the
purchase or delivery of shares thereunder, the delivery of any or all shares
pursuant to such Stock Award may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of Stock purchasable or
otherwise deliverable under Stock Awards then outstanding, the Committee may
require, as a condition of exercise of any Option or as a condition to any other
delivery of Stock pursuant to a Stock Award, that the Participant or other
recipient of a Stock Award represent, in writing, that the shares received
pursuant to the Stock Award are being acquired for investment and not with a
view to distribution and agree that the shares will not be disposed of except
pursuant to an effective registration statement, unless the Company shall have
received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws. The Company may include on certificates representing shares delivered
pursuant to a Stock Award such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.
<PAGE>
4.6 Listing and Legal Compliance
------------------------------
The Committee may suspend the payment of any Stock Award so long as it
determines that securities exchange listing or registration or qualification
under any securities laws is required in connection therewith and has not been
completed on terms acceptable to the Committee.
4.7 Termination and Amendment of the Plan.
------------------------------------------
The Board of Directors at any time may amend or terminate the Plan without
stockholder approval; provided, however, that the Board of Directors may
condition any amendment on the approval of stockholders of the Company if such
approval is necessary or advisable with respect to tax, securities or other
applicable laws. No such termination or amendment without the consent of the
holder of a Stock Award may adversely affect the rights of the Participant under
such Stock Award.
4.8 Choice of Law.
---------------
The laws of the State of Delaware shall govern the Plan, to the extent not
preempted by federal law, without reference to the principles of conflict of
laws.
4.9 Effective Date of Plan
-------------------------
This Plan was approved by the Board of Directors and is effective as of October
30, 2000.
<PAGE>
LEVEL 8 SYSTEMS, INC.
By: /s/ Dennis McKinnie
---------------------------------
Dennis McKinnie, Senior Vice President,
Chief Legal and Administrative Officer
and Corporate Secretary
<PAGE>
