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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant | x | |
Filed by a party other than the registrant | o |
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Under Section 240.14a-12 |
INFOUSA INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required | |||||||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||||
(1 | ) | Title of each class of securities to which transaction applies: | ||||||
(2 | ) | Aggregate number of securities to which transactions applies: | ||||||
(3 | ) | Per unit price or other underlying value of transaction computed pursuant to | ||||||
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is | ||||||||
calculated and state how it was determined): | ||||||||
(4 | ) | Proposed maximum aggregate value of transaction: | ||||||
(5 | ) | Total fee paid: | ||||||
o | Fee paid previously with preliminary materials. | |||||||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) | |||||||
and identify the filing for which the offsetting fee was paid previously. Identify the | ||||||||
previous filing by registration statement number, or the Form or Schedule and the date | ||||||||
of its filing. | ||||||||
(1 | ) | Amount Previously Paid: | ||||||
(2 | ) | Form, Schedule or Registration Statement No.: | ||||||
(3 | ) | Filing Party: | ||||||
(4 | ) | Date Filed: |
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![(infoUSA LOGO)](https://capedge.com/proxy/DEF 14A/0000950134-05-006137/d23626d2362602.gif)
1. To elect three directors to the Board of Directors for a term of three years; | |
2. To approve an amendment to the Company’s 1997 Stock Option Plan increasing the number of shares available for issuance under the plan by 3,000,000; and | |
3. To transact such other business as may properly come before the meeting or any adjournment thereof. |
Sincerely, |
![]() |
Fred Vakili | |
Secretary |
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Director | Nominated for | |||||||||||||
Name of Nominee | Age | Position/Principal Occupation | Since | Term Expiring | ||||||||||
Martin F. Kahn(1)(2) | 54 | Director; Managing Director of Cadence Information Associates, L.L.C. | 2004 | 2008 | ||||||||||
Dr. Charles W. Stryker | 57 | Nominee; President of Venture Development Center, Inc. | N/A | 2008 | ||||||||||
Dennis P. Walker(1)(3) | 59 | Director; President and Chief Executive Officer of Jet Linx Aviation | 2003 | 2008 |
(1) | Member of the Governance and Nominating Committee. |
(2) | Member of the Finance Committee. |
(3) | Member of the Compensation Committee. |
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Director | Term | |||||||||||||
Name of Director | Age | Position/Principal Occupation | Since | Expires | ||||||||||
Vinod Gupta | 58 | Chairman of the Board and Chief Executive Officer of the Company | 1972 | 2006 | ||||||||||
Dr. George F. Haddix(1)(2) | 66 | Director; Chairman and Chief Executive Officer of PKW Holdings, Inc. and PKWARE, INC. | 1995 | 2006 | ||||||||||
Dr. Vasant H. Raval(3)(4) | 65 | Director; Professor and Chair, Department of Accounting, at Creighton University | 2002 | 2006 | ||||||||||
Harold W. Andersen(1)(2)(3) | 81 | Director; Contributing Editor to Omaha World Herald and Retired Publisher of Omaha World Herald Company | 1993 | 2007 | ||||||||||
Elliot S. Kaplan(4) | 68 | Director; Senior Partner in law firm of Robins, Kaplan, Miller & Ciresi L.L.P. | 1988 | 2007 |
(1) | Member of the Governance and Nominating Committee. |
(2) | Member of the Compensation Committee. |
(3) | Member of the Audit Committee. |
(4) | Member of the Finance Committee. |
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Common Stock | Percent of | ||||||||
Beneficially | Outstanding Shares | ||||||||
Beneficial Owners | Owned(1) | of Common Stock | |||||||
Vinod Gupta | 20,135,006 | 36.6 | % | ||||||
5711 South 86th Circle | |||||||||
Omaha, Nebraska 68127 | |||||||||
Awad Asset Management, Inc.(2) | 3,808,111 | 7.1 | % | ||||||
250 Park Avenue, 2nd Floor | |||||||||
New York, New York 10177 | |||||||||
Columbia Wanger Asset Management, L.P.(3) | 3,370,000 | 6.3 | % | ||||||
227 West Monroe Street, Suite 3000 | |||||||||
Chicago, Illinois 60606 | |||||||||
Harold W. Andersen(4) | 116,800 | ** | |||||||
Richard J. Borda | 10,000 | ** | |||||||
Dr. George F. Haddix(5) | 287,300 | ** | |||||||
Martin F. Kahn | 10,000 | ** | |||||||
Elliot S. Kaplan | 246,580 | ** | |||||||
Dr. Vasant H. Raval | 10,000 | ** | |||||||
Dr. Charles W. Stryker | -0- | ** | |||||||
Dennis P. Walker | 10,000 | ** | |||||||
Ray Butkus | 28,124 | ** | |||||||
Edward C. Mallin | 74,873 | ** | |||||||
Monica Messer(6) | 413,699 | ** | |||||||
Fred Vakili | 293,525 | ** | |||||||
All directors, nominees and executive officers as a group (15 persons) | 21,686,241 | 39.1 | % |
** | Less than 1% |
(1) | Includes the following shares that may be purchased within 60 days of the Record Date pursuant to the exercise of outstanding options: Mr. Gupta, 1,737,479 shares; Mr. Andersen, 30,000 shares; Mr. Borda, 7,000 shares; Dr. Haddix, 30,000 shares; Mr. Kaplan, 36,000 shares; Dr. Raval, 8,000 shares; Mr. Butkus, 28,124 shares; Mr. Mallin, 44,873 shares; Ms. Messer, 239,622 shares; Mr. Vakili, 56,312 shares; and all directors and executive officers as a group, 2,245,326 shares. |
(2) | Based on a Schedule 13G filed by Awad Asset Management, Inc. on January 27, 2005. |
(3) | Based on a Schedule 13G/ A filed by Columbia Wanger Asset Management, L.P. (“WAM”), WAM Acquisition GP, Inc., the general partner of WAM (“WAM GP”), and Columbia Acorn Trust (“Acorn”) on February 11, 2005. WAM, WAM GP and Acorn have shared voting and investment power over 3,370,000 shares, and sole voting and investment power over no shares. |
(4) | Includes 10,000 shares owned by Mr. Andersen’s spouse. |
(5) | Includes 257,300 shares owned jointly by Dr. Haddix with his spouse. |
(6) | Includes 9,633 shares owned by Ms. Messer’s daughter. |
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Fiscal Year | |||||||||
Type of Fee | 2004 | 2003 | |||||||
Audit Fees | $ | 880,876 | $ | 257,067 | |||||
Audit-Related Fees(1) | 177,108 | 155,447 | |||||||
Tax Fees(2) | 60,425 | 5,350 | |||||||
All Other Fees | -0- | -0- | |||||||
Total fees | $ | 1,118,409 | $ | 417,864 | |||||
(1) | Audit-Related Fees consists of fees for employee benefit plan audits, due diligence, and assistance with Form 8-K filings. |
(2) | Tax Fees consists of fees for state and federal income tax preparation for a Company subsidiary, tax research, and preparation of refund claims. |
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![(PERFORMANCE GRAPH)](https://capedge.com/proxy/DEF 14A/0000950134-05-006137/d23626d2362601.gif)
31-Dec-99 | 31-Dec-00 | 31-Dec-01 | 31-Dec-02 | 31-Dec-03 | 31-Dec-04 | |||||||||||||||||||
infoUSA Common Stock | $ | 100.00 | $ | 24.22 | $ | 49.79 | $ | 35.66 | $ | 53.17 | $ | 80.29 | ||||||||||||
NASDAQ (U.S. Companies) | $ | 100.00 | $ | 60.31 | $ | 47.84 | $ | 33.07 | $ | 49.45 | $ | 53.81 | ||||||||||||
S&P Data Processing & Outsourced Services Index | $ | 100.00 | $ | 120.77 | $ | 131.48 | $ | 93.45 | $ | 109.37 | $ | 115.32 |
* | Assumes $100 invested on December 31, 1999 ininfoUSA Inc. Common Stock, Nasdaq Stock Market (U.S. Companies) Index, and S&P Data Processing & Outsourced Services Index. |
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Long-Term | |||||||||||||||||||||
Compensation | |||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||
Stock | All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary($) | Bonus($) | Options(#) | Compensation($) | ||||||||||||||||
Vinod Gupta | 2004 | $ | 750,000 | (1) | $ | -0- | -0- | $ | 6,500 | ||||||||||||
Chairman of the Board and | 2003 | 500,770 | (1) | 250,000 | 600,000 | 6,000 | |||||||||||||||
Chief Executive Officer | 2002 | 560,000 | (1) | 430,000 | 500,000 | 5,500 | |||||||||||||||
Ray Butkus(2) | 2004 | $ | 371,539 | $ | 324,442 | (3) | -0- | $ | 6,000 | ||||||||||||
President, Donnelly Group | 2003 | 239,231 | -0- | 50,000 | 3,877 | ||||||||||||||||
2002 | 8,462 | -0- | -0- | -0- | |||||||||||||||||
Edward C. Mallin | 2004 | $ | 338,077 | $ | 279,000 | -0- | $ | 6,500 | |||||||||||||
President, Walter Karl | 2003 | 300,000 | 196,767 | 50,000 | 6,000 | ||||||||||||||||
2002 | 300,000 | 176,980 | 20,000 | 5,500 | |||||||||||||||||
Monica Messer | 2004 | $ | 333,846 | $ | 50,000 | (4) | -0- | $ | 6,500 | ||||||||||||
Chief Operations Officer | 2003 | 273,558 | -0- | 150,000 | 6,000 | ||||||||||||||||
2002 | 300,000 | 25,000 | 200,000 | 5,500 | |||||||||||||||||
Fred Vakili | 2004 | $ | 275,211 | $ | 108,040 | (5) | -0- | $ | 6,500 | ||||||||||||
Executive Vice President of | 2003 | 237,404 | 182,000 | (5) | 35,000 | 6,000 | |||||||||||||||
Administration and Chief | 2002 | 260,000 | 50,000 | (5) | -0- | 5,500 | |||||||||||||||
Administrative Officer |
(1) | Excludes certain amounts paid to Annapurna Corporation for reimbursement of Company related travel and entertainment expenses and to Everest Investment Management for rent and investment advisory fees, all as more particularly set forth under “Certain Transactions” in this Proxy Statement. |
(2) | Mr. Butkus’ employment with the Company began in December 2002. |
(3) | Includes $301,775 paid to White Oaks Consulting, which is wholly owned by Mr. Butkus. |
(4) | Includes $50,000 paid to Growth Quest Ventures, which is wholly owned by Ms. Messer. |
(5) | Includes the following amounts paid to Alborz Corp., which is wholly owned by Mr. Vakili: $108,040 in 2004; $182,000 in 2003; and $50,000 in 2002. |
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Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money Options at | |||||||||||||||||||||||
Shares | Options at 12/31/04 (#) | 12/31/04($)(1) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise(#) | Realized($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Vinod Gupta | 400,000 | $ | 1,352,000 | 1,535,400 | 764,600 | $ | 3,698,731 | $ | 1,936,269 | |||||||||||||||
Ray Butkus | -0- | -0- | 22,916 | 27,084 | 118,934 | 140,566 | ||||||||||||||||||
Edward C. Mallin | 19,334 | 68,033 | 37,623 | 40,377 | 99,236 | 112,084 | ||||||||||||||||||
Monica Messer | -0- | -0- | 205,288 | 168,712 | 413,694 | 386,866 | ||||||||||||||||||
Fred Vakili | -0- | -0- | 52,519 | 23,481 | 225,036 | 73,294 |
(1) | Based on the closing market price of $11.19 per share of Common Stock on December 31, 2004. |
Number of securities | |||||||||||||
remaining available for future | |||||||||||||
Number of securities to be | Weighted-average | issuance under equity | |||||||||||
issued upon exercise of | exercise price of | compensation plans | |||||||||||
outstanding options, | outstanding options, | (excluding securities reflected | |||||||||||
warrants and rights | warrants and rights | in column (a)) | |||||||||||
Plan Category | (a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 3,789,692 | $ | 8.38 | 770,709 | |||||||||
Equity compensation plans not approved by security holders | -0- | N/A | N/A | ||||||||||
Total | 3,789,692 | $ | 8.38 | 770,709 | |||||||||
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• | Exercise Price. The Administrator determines the exercise price of options at the time the options are granted. The exercise price of an incentive stock option may not be less than 100% of the fair market value of the Common Stock on the date such option is granted; provided, however, the exercise price of an incentive stock option granted to a 10% stockholder may not be less than 110% of the fair market value of the Common Stock on the date such option is granted. The fair market value of the Common Stock is generally determined with reference to the closing sale price for the Common Stock (or the closing bid if no sales were reported) on the last market trading day prior to the date the option is granted. | |
• | Exercise of Option; Form of Consideration. The Administrator determines when options become exercisable, and may in its discretion, accelerate the vesting of any outstanding option. The means of payment for shares issued upon exercise of an option is specified in each option agreement. The 1997 Plan permits payment to be made by cash, check, promissory note, other shares of Common |
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Stock of the Company (with some restrictions), cashless exercises, a reduction in the amount of any Company liability to the optionee, any other form of consideration permitted by applicable law, or any combination thereof. | ||
• | Term of Option. The term of an incentive stock option may be no more than ten (10) years from the date of grant; provided that in the case of an incentive stock option granted to a 10% stockholder, the term of the option may be no more than 5 years from the date of grant. No option may be exercised after the expiration of its term. | |
• | Termination of Employment. If an optionee’s employment or consulting relationship terminates for any reason (other than death or disability), then all options held by the optionee under the 1997 Plan expire on the earlier of (i) 3 months after the date of termination, unless otherwise provided in his or her notice of grant, or (ii) the expiration date of such option. To the extent the option is exercisable at the time of such termination, the optionee may exercise all or part of his or her option at any time before the option expires. | |
• | Death or Disability. If an optionee’s employment or consulting relationship terminates as a result of death or disability, then all options held by such optionee under the 1997 Plan expire on the earlier of (i) 12 months after the date of termination, unless otherwise provided in his or her notice of grant, or (ii) the expiration date of such option. The optionee (or the optionee’s estate or the person who acquires the right to exercise the option by bequest or inheritance), may exercise all or part of the option at any time before such expiration to the extent that the option was exercisable at the time of such termination. | |
• | Nontransferability of Options. Unless otherwise determined by the Administrator, options granted under the 1997 Plan are not transferable other than by will or the laws of descent and distribution, and may be exercised during the optionee’s lifetime only by the optionee. | |
• | Other Provisions. The stock option agreement may contain other terms, provisions and conditions not inconsistent with the 1997 Plan as may be determined by the Administrator. |
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BY ORDER OF THE BOARD OF DIRECTORS |
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Appendix
infoUSA INC.
ANNUAL MEETING OF STOCKHOLDERS
Friday, April 29, 2005
4:00 p.m.
at: The Company’s Carter Lake facility
2200 Abbott Drive
Carter Lake, Iowa 51510
infoUSA Inc. | ||
5711 South 86th Circle, Omaha, Nebraska 68127 | proxy |
This proxy is solicited by the Board of Directors for use at the Annual Meeting of Stockholders ofinfoUSA Inc. (the “Company”) to be held on April 29, 2005 or any adjournments thereof.
The shares of the Company’s Common Stock you hold as of the record date on March 15, 2005 will be voted as you specify below.
By signing the proxy, you revoke all prior proxies and appoint Raj Das and Fred Vakili, or either of them, as proxies with full power of substitution, to vote all shares of stock of the Company of record in the name of the undersigned at the close of business on March 15, 2005 at the Annual Meeting of Stockholders.
The undersigned stockholder hereby acknowledges receipt of the Notice of the Annual Meeting of Stockholders and Proxy Statement for the Annual Meeting to be held on April 29, 2005.
See reverse for voting instructions.
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\/ Please detach here \/
The Board of Directors Recommends a Vote FOR Items 1 and 2.
1. | Election of directors (with | 01 | Martin F. Kahn | o | Vote FOR | o | Vote WITHHELD | |||||||||||||||
terms expiring 2008): | 02 | Dr. Charles W. Stryker | all nominees | from all nominees | ||||||||||||||||||
03 | Dennis P. Walker | (except as marked) | ||||||||||||||||||||
(Instructions: To withhold authority to vote for any indicated nominee, | ||||||||||||||||||||||
write the number(s) of the nominee(s) in the box provided to the right.) | ||||||||||||||||||||||
2. | Proposal to approve an amendment to theinfoUSA 1997 Stock | o | For | o | Against | o | Abstain | |||||||||||||||
Option Plan increasing the number of shares available for issuance under the plan by 3,000,000. |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTEDFOR EACH PROPOSAL. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE WITH RESPECT TO SUCH OTHER MATTERS AS MAY BE PROPERLY BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
Address Change? Mark Box
Indicate changes below: o
Date
Signature(s) in Box
Please sign exactly as your name(s) appear on Proxy. If
held in joint tenancy, all persons must sign. Trustees,
administrators, etc., should include title and authority.
Corporations should provide full name of corporation and title of authorized officer signing the proxy.
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Appendix
infoUSA Inc.
1997 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan are:
• | to attract and retain the best available personnel for positions of substantial responsibility, | |||
• | to provide additional incentive to Employees, Directors and Consultants, and | |||
• | to promote the success of the Company’s business. |
Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan.
(c) “Board” means the Board of Directors of the Company.
(d) “Code” means the Internal Revenue Code of 1986, as amended.
(e) “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.
(f) “Common Stock” means the Common stock of the Company.
(g) “Company” means infoUSA, Inc., a Delaware corporation.
(h) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
(i) “Director” means a member of the Board.
(j) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.
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(k) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.
(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(m) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.
(n) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(o) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.
(p) “Notice of Grant” means a written or electronic notice evidencing certain terms and conditions of an individual Option grant. The Notice of Grant is part of the Option Agreement.
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(q) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(r) “Option” means a stock option granted pursuant to the Plan.
(s) “Option Agreement” means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.
(t) “Option Exchange Program” means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price.
(u) “Optioned Stock” means the Common Stock subject to an Option.
(v) “Optionee” means the holder of an outstanding Option granted under the Plan.
(w) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(x) “Plan” means this 1997 Stock Option Plan.
(y) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
(z) “Section 16(b)” means Section 16(b) of the Exchange Act.
(aa) “Service Provider” means an Employee, Director or Consultant.
(bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan.
(cc) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is eight million (8,000,000) Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the Plan.
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4. Administration of the Plan.
(a) Procedure.
(i)Multiple Administrative Bodies. The Plan may be administered by different Committees with respect to different groups of Service Providers.
(ii)Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.
(iii)Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv)Other Administration. Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be covered by each Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;
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(vi) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
(x) to modify or amend each Option (subject to Section 14(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by an Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or advisable for administering the Plan.
(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options.
5. Eligibility. Nonstatutory Stock Options may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
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such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall they interfere in any way with the Optionee’s right or the Company’s right to terminate such relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of the Company, Options to purchase more than nine hundred thousand (900,000) Shares.
(ii) The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 12.
(iii) If an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 12), the cancelled Option will be counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option Agreement. In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of
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the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s participation in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
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(viii) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such
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period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.
11. Non-Transferability of Options. Unless determined otherwise by the Administrator, an Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If the Administrator makes an Option transferable, such Option shall contain such additional terms and conditions as the Administrator deems appropriate.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected
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without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into 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 of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets.
13. Date of Grant. The date of grant of an Option shall be, for all purposes, the date on which the Administrator makes the determination granting such Option or, on such other later
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date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
16. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
18. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws.
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