EXHIBIT 10.1
RELATIONSERVE MEDIA, INC.
2005 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The RelationServe Media, Inc. 2005 Non-Employee Directors Stock
Option Plan (the "Plan") is established effective as of the 23rd day of
June 2005, (the "Effective Date") to create additional incentive for the
non employee directors of RelationServe Media, Inc., a Nevada corporation,
and any successor corporation thereto (collectively referred to as the
"Company") to promote the financial success and progress of the Company and
any present or future parent and/or subsidiary corporations of the Company.
For purposes of the Plan, a parent corporation and a subsidiary corporation
shall be as defined in sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended (the "Code").
2. ADMINISTRATION. The Plan shall be administered by the Board of Directors of
the Company (the "Board") and/or by a duly appointed committee of the Board
having such powers as shall be specified by the Board. Any subsequent
references herein to the Board shall also mean the committee if such
committee has been appointed and, unless the powers of the committee have
been specifically limited, the committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to
terminate or amend the Plan at any time subject to the terms of the Plan
and any applicable limitations imposed by law. The Board shall have no
authority, discretion or power to select the non-employee directors of the
Company who will receive options under the Plan, to set the exercise price
of the options granted under the Plan, to determine the number of shares of
common stock to be granted under option or the time at which such options
are to be granted, to establish the duration of option grants, or to alter
other terms or conditions specified in the Plan, except in the sense of
administering the Plan subject to the provisions of the Plan and except as
is provided in Paragraph 7. All questions of interpretation of the Plan or
of any options granted under the Plan (an "Option") shall be determined by
the Board, and such determinations shall be final and binding upon all
persons having an interest in the Plan and/or any Option. Any officer of
the Company shall have the authority to act on behalf of the Company with
respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right,
obligation, or election.
3. ELIGIBILITY AND TYPE OF OPTION. Options may be granted only to directors of
the Company who, at the time of such grant, are not employees of the
Company or of any parent or subsidiary corporation of the Company
("Non-Employee Directors"). Options granted to Non-Employee Directors shall
be non-qualified stock options; that is, options that are not treated as
having been granted under section 422(b) of the Code. A person granted an
Option is hereinafter referred to as an "Optionee".
4. SHARES SUBJECT TO OPTION. Options shall be for the purchase of shares of
authorized but unissued common stock or treasury shares of common stock of
the Company (the "Stock"), subject to adjustment as provided in paragraph 8
below. The maximum number of shares of Stock which may be issued under the
Plan shall be two million (2,000,000) shares as follows: (a) One million
(1,000,000) shall be reserved for issuance pursuant to Section 6(a)(i) and
(b) One million (1,000,000) shall be reserved pursuant to Section 6(a)(ii)
and (iii), collectively. In the event that any outstanding Option for any
reason expires or is terminated and/or shares of Stock subject to
repurchase are repurchased by the Company, the shares allocable to the
unexercised portion of such Option, or such repurchased shares, may again
be subject to an Option grant.
5. TIME FOR GRANTING OPTIONS. All Options shall be granted, if at all, within
five (5) years from the Effective Date.
6. TERMS, CONDITIONS AND FORM OF OPTIONS. Options granted pursuant to the Plan
shall be evidenced by written agreements specifying the number of shares of
Stock covered thereby (the "Option Agreement"), which written agreement may
incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the following terms and conditions:
a. AUTOMATIC GRANT OF OPTIONS. Subject to execution by an
Non-Employee Director of an appropriate Option Agreement, Options
shall be granted automatically and without further action of the
Board (subject to such additional terms and conditions as are set
forth herein) as follows:
i. Each Non-Employee Director who is newly-elected or appointed
Chairman of the Board on or after the Effective Date shall
at the time first elected as Chairman receive an Option to
purchase one million (1,000,000) shares of Stock. No Option
Agreement shall be issued prior to stockholder approval of
this Plan, and if not so approved the award provided hereby
shall be of no effect and the Chairman Option shall be
cancelled.
ii. Each person (other than the Chairman) who is newly elected
or appointed as an Non-Employee Director on or after the
Effective Date shall be granted an Option on the day of such
initial election or appointment (and not upon any future
re-election or appointment) to purchase Fifty Thousand
(50,000) shares of Stock.
iii. Each person who remains an Non-Employee Director for a
period of two (2) consecutive years following the date of
initial election or appointment shall be granted an Option
to purchase fifty thousand (50,000) shares of Stock on the
two (2) year anniversary of such Non-Employee Director's
initial election or appointment.
iv. Notwithstanding the foregoing, any person may elect not to
receive an Option to be granted pursuant to this paragraph
6(a) by delivering written notice of such election to the
Board no later than the day prior to the date on which such
Option would otherwise be granted. A person so declining an
Option shall receive no payment or other consideration in
lieu of such declined Option. A person who has declined an
Option may revoke such election by delivering written notice
of such revocation to the Board no later than the day prior
to the date on which such Option would be granted pursuant
to paragraph 6(a).
v. Notwithstanding any other provision of the Plan to the
contrary, no Option shall be granted to any individual on a
day when he or she is no longer serving as an Non-Employee
Director of the Company.
b. OPTION EXERCISE PRICE. The purchase price of each share of Stock
purchasable under an Option shall be the Fair Market Value (as
defined below) of such share of Stock on the date the Option is
granted. "Fair Market Value" means the average of the high and
low prices of publicly traded shares of Stock, rounded to the
nearest cent, on the principal national securities exchange on
which shares of Stock are listed (if the shares of Stock are so
listed), or on the Nasdaq Stock Market (if the shares of Stock
are regularly quoted on the Nasdaq Stock Market), or, if not so
listed or regularly quoted, the mean between the closing bid and
asked prices of publicly traded shares of Stock in the
over-the-counter market, 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 Board in a manner consistent with the provisions of the Code.
Anything in this Section 6(b) to the contrary notwithstanding, in
no event shall the purchase price of a share of Stock be less
than the minimum price permitted under the rules and policies of
any national securities exchange on which the shares of Stock are
listed.
c. EXERCISE PERIOD AND EXERCISABILITY OF OPTIONS. An Option granted
pursuant to Section 6(a)(i), 6(a)(ii) or 6(a)(iii) of the Plan
shall be exercisable for a term of ten (10) years. Options
granted pursuant to Section 6(a)(i) of the Plan shall become
exercisable on the six months anniversary of the date of approval
of this Plan by the stockholders of the Company. Options granted
pursuant to Section 6(a)(ii) or 6(a)(iii) of the Plan shall
become exercisable as to fifty (50%) percent on the day which is
one (1) year from the date on which the Option was granted and
the remaining fifty (50%) percent on the date which is two (2)
years from the date the Option was granted.
d. TERMINATION OF OPTIONEE. In the event of an Optionee's
termination as Chairman or as director for any reason other than
as a result of death or disability of the Optionee (in which case
of death or disability all Options that have become vested will
remain exercisable for the earlier of twelve (12) months or the
expiration date of the Options). All Options that have not become
vested and exercisable as of the date of such cessation of
Service shall be forfeited and to the extent that such Options
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have become vested and exercisable as of such date, such Options
must be exercised, if at all, within ninety (90) days after the
Optionee's termination, after which time such Options shall
automatically terminate; provided, however, in the event an
Optionee ceases being a director because the Optionee's service
was terminated by removal or breach of any agreement with the
Company, all Options granted hereunder (whether vested or
unvested) shall terminate immediately.
e. PAYMENT OF OPTION EXERCISE. Payment of the exercise price for the
number of shares of Stock being purchased pursuant to any Option
shall be made in cash, by check or such other instrument as may
be acceptable to the Board.
f. TRANSFER OF CONTROL. A "Transfer of Control" shall be deemed to
have occurred in the event any of the following occurs with
respect to the Company:
(i) a merger or consolidation in which the Company is not the
surviving corporation;
(ii) a merger or consolidation in which the Company is the
surviving corporation where the stockholders of the Company
before such merger or consolidation do not retain, directly
or indirectly, at least a majority of the beneficial
interest in the voting stock of the Company after such
merger or consolidation;
(iii) the sale, exchange, or transfer of all or substantially all
of the assets of the Company other than a sale, exchange,
or transfer to one or more subsidiary corporations (as
defined in paragraph 1 above) of the Company;
(iv) the direct or indirect sale or exchange by the stockholders
of the Company of all or substantially all of the stock of
the Company where the stockholders of the Company before
such sale or exchange do not retain, directly or
indirectly, at least a majority of the beneficial interest
in the voting stock of the Company after such sale or
exchange; or
(v) a liquidation or dissolution of the Company.
In the event of a Transfer of Control, any unexercisable or
unvested portion of the outstanding Options shall be immediately
exercisable and vested in full as of the date ten (10) days prior to
the expected date of the Transfer of Control. The exercise or vesting
of any Option that was permissible solely by reason of this paragraph
6(f) shall be conditioned upon the consummation of the Transfer of
Control. In addition, the surviving, continuing, successor, or
purchasing corporation or parent corporation thereof, as the case may
be (the "Acquiring Corporation"), may either assume the Company's
rights and obligations under outstanding Options or substitute for
outstanding Options substantially equivalent options for the Acquiring
Corporation's stock. For purposes of this paragraph 6(e), an Option
shall be deemed assumed if, following the Transfer of Control, the
Option confers the right to acquire in accordance with its terms and
conditions, for each share of Stock subject to the Option immediately
prior to the Transfer of Control, the consideration (whether stock,
cash or other securities or property) to which a holder of a share of
Stock on the effective date of the Transfer of Control was entitled.
Any Options which are neither assumed nor substituted for by the
Acquiring Corporation in connection with the Transfer of Control nor
exercised as of the date of the Transfer of Control shall terminate
and cease to be outstanding effective as of the date of the Transfer
of Control.
g. STOCKHOLDER APPROVAL. No Option may be granted pursuant to the
Plan prior to obtaining stockholder approval of the Plan.
7. AUTHORITY TO VARY TERMS. The Board shall have the authority from time to
time to vary the terms of the Option Agreements either in connection with
the grant of an individual Option or in connection with the authorization
of a new standard form or forms of Option; provided, however, that the
terms and conditions of such revised or amended standard form or forms of
stock option agreement shall be in accordance with the terms of the Plan.
Such authority shall include, but not be limited to, the authority to grant
Options which are immediately exercisable subject to the Company's right to
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repurchase any unvested shares of Stock acquired by the Optionee on
exercise of an Option in the event such Optionee's service as director of
the Company is terminated for any reason.
8. EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN. Appropriate adjustments shall be
made in the number and class of shares of Stock subject to the Plan, the
number of shares to be granted under the Plan and to any outstanding
Options and in the Option exercise price of any outstanding Options in the
event of a stock dividend, stock split, recapitalization, reverse stock
split, combination, reclassification, or like change in the capital
structure of the Company.
9. TRANSFERABILITY OF OPTIONS.
a. Except as provided in paragraph 9(b), an Option may be exercised
during the lifetime of the Optionee only by the Optionee or the
Optionee's guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the
laws of descent and distribution.
b. Notwithstanding the foregoing, with the consent of the Board, in
its sole discretion, an Optionee may transfer all or a portion of
the Option to: (i) an Immediate Family Member (as defined below),
(ii) a trust for the exclusive benefit of the Optionee and/or one
or more Immediate Family Members, (iii) a partnership in which
the Optionee and/or one or more Immediate Family Members are the
only partners, or (iv) such other person or entity as the Board
may permit (individually, a "Permitted Transferee"). For purposes
of this paragraph 9(b) "Immediate Family Members" shall mean the
Optionee's spouse, former spouse, children or grandchildren,
whether natural or adopted. As a condition to such transfer, each
Permitted Transferee to whom the Option or any interest therein
is transferred shall agree in writing (in a form satisfactory to
the Company) to be bound by all of the terms and conditions of
the Option Agreement evidencing such Option and any additional
restrictions or conditions as the Company may require. Following
the transfer of an Option, the term "Optionee" shall refer to the
Permitted Transferee, except that, with respect to any
requirements of continued Service or provision for the Company's
tax withholding obligations, such term shall refer to the
original Optionee. The Company shall have no obligation to notify
a Permitted Transferee of any termination of the transferred
Option, including an early termination resulting from the
termination of Service of the Original Optionee. A Permitted
Transferee shall be prohibited from making a subsequent transfer
of a transferred Option except to the original Optionee or to
another permitted Transferee or as provided in paragraph 9(a).
10. RE-PRICING OF OPTIONS / REPLACEMENT OPTIONS
The Company shall not re-price any Options or issue any
replacement Options unless the Option re-pricing or Option
replacement shall have been approved by the holders of a majority
of the outstanding shares of the Company.
11. TERMINATION OR AMENDMENT OF PLAN.
a. The Board, including any duly appointed committee of the Board,
may terminate or amend the Plan at any time; provided, however,
that without the approval of the stockholders of the Company,
there shall be no increase in the total number of shares of Stock
covered by the Plan (except by operation of the provisions of
paragraph 8 above). In any event, no amendment may adversely
affect any then outstanding Option, or any unexercised portion
thereof, without the consent of the Optionee.
b. It is the intention of the Board that the Plan comply strictly
with the provisions of Section 409A of the Code and Treasury
Regulations and other Internal Revenue Service guidance
promulgated thereunder (the "Section 409A Rules") and the Board
shall exercise its discretion in granting Options hereunder (and
the terms of such Options) accordingly. The Plan and any grant of
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an Option hereunder may be amended from time to time (without, in
the case of an Option, the consent of the Optionee) as may be
necessary or appropriate to comply with the Section 409A Rules.
Adopted: August 9, 2005
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