EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
1. PURPOSE
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The purpose of this 1993 Stock Option Plan (the "Plan") is to advance
the interests of LightStream Corporation (the "Company") by enhancing the
ability of the Company and its parent and subsidiaries to attract and
retain able employees, consultants or advisors to the Company; to reward
such individuals for their contributions; and to encourage such individuals
to take into account the long-term interests of the Company through
interests in shares of the Company's common stock, $.01 par value (the
"Stock"). Any employee, consultant, or advisor selected to receive an
award under the Plan is referred to as a "participant".
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422 of the Internal Revenue Code of 1986 (as from time
to time amended, the "Code") (any option that is intended so to qualify as
an incentive stock option being referred to herein as an "incentive
option"), or options that are not incentive options, or both. Except as
otherwise expressly provided with respect to an option grant, no option
granted pursuant to the Plan shall be an incentive option.
2. ADMINISTRATION
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The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan: (a) to grant awards consisting of options
or stock appreciation rights ("SARs"), or both, to such participants as the
Board may select; (b) to determine the time or times when awards shall be
granted and the number of shares of Stock subject to each award; (c) to
determine which options are, and which options are not, intended to be
incentive options; (d) to determine the terms and conditions of each award;
(e) to prescribe the form or forms of any instruments evidencing awards and
any other instruments required under the Plan and to change such forms from
time to time; (f) to adopt, amend, and rescind rules and regulations for
the administration of the Plan; and (g) to interpret the Plan and to decide
any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 8, the Board
shall also have the authority, both generally and in particular instances,
to waive compliance by a participant with any obligation to be performed by
the participant under an award, to waive any condition or provision of an
award, and to amend or cancel any award (and if an award is cancelled, to
grant a new award on such terms as the Board shall specify) except that the
Board may not take any action with respect to an outstanding award that
would adversely affect the rights of the participant under such award
without such participant's consent. Nothing in the preceding sentence
shall be construed as limiting the power of the Board to make adjustments
required by Section 4(c) and Section 6(j).
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event
all references (as appropriate) to the Board hereunder shall be deemed to
refer to the Committee. The Committee, if one is appointed, shall consist
of at least two directors. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be
made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members. On and after
registration of the Stock under the Securities Exchange Act of 1934 (the
"1934 Act"), the Board shall delegate the power to select directors and
officers to receive awards under the Plan and the timing, pricing, and
amount of such awards to a Committee, all members of which shall be
disinterested persons within the meaning of Rule 16b-3 under the 1934 Act
and "outside directors" within the meaning of section 162(m)(4)(c)(i) of
the Code.
3. EFFECTIVE DATE AND TERM OF PLAN
_______________________________
The Plan shall become effective on the date on which it is approved by
the shareholders of the Company. Grants of awards under the Plan may be
made prior to that date (but after Board adoption of the Plan), subject to
approval of the Plan by the shareholders.
No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
__________________________
(a) Number of Shares. Subject to adjustment as provided in Section
4(c), the aggregate number of shares of Stock that may be delivered upon
the exercise of award granted under the Plan shall be 1,300,000. If any
award granted under the Plan terminates without having been exercised in
full, or upon exercise is satisfied other than by delivery of Stock, the
number of shares of Stock as to which such award was not exercised shall be
available for future grants within the limits set forth in this
Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
(c) Changes in Stock. In the event of a stock dividend, stock split,
or combination of shares, recapitalization, or other change in the
Company's capital stock, the number and kind of shares of stock or
securities of the Company subject to awards then outstanding or
subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares or securities that may be delivered under the
Plan, and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons.
The Board may also adjust the number of shares subject to outstanding
awards, the exercise price of outstanding awards, and the terms of
outstanding awards, to take into consideration material changes in
accounting practices or principles, extraordinary dividends, consolidations
or mergers (except as described in Section 6(j)), acquisitions or
dispositions of stock or property, or any other event if it is determined
by the Board that such adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment shall be made in
the case of an incentive option, without the consent of the participant, if
it would constitute a modification, extension, or renewal of the option
within the meaning of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
______________________
Persons eligible to receive awards under the Plan shall be those
employees of the Company, its parent, or subsidiaries, or consultants, or
advisors to any of them, who in the opinion of the Board are in a position
to make a contribution to the Company. Participants shall be selected by
the Board. A parent for purposes of the Plan shall be a corporation which
owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of the Company's stock. A subsidiary for purposes of
the Plan shall be (i) a corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock, or (ii) a corporation in which the Company's
parent owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock. The Board may grant
awards covering up to the entire number of shares available for issuance
under the Plan (as determined under Section 4(a)) to any one participant or
to several participants, in the sole discretion of the Board.
Incentive options shall be granted only to "employees" as defined in
the provisions of the Code or regulations thereunder applicable to
incentive stock options.
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
6. TERMS AND CONDITIONS OF OPTIONS AND SARs
(a) Exercise Price of Options. The exercise price of each option
shall be determined by the Board but in the case of an incentive option
shall not be less than 100% (110%, in the case of an incentive option
granted to a ten-percent shareholder) of the fair market value of the Stock
at the time the option is granted; nor shall the exercise price be less, in
the case of an original issue of authorized stock, than par value. For
this purpose, "fair market value" in the case of incentive options shall
have the same meaning as it does in the provisions of the Code and the
regulations thereunder applicable to incentive options; and "ten-percent
shareholder" shall mean any participant who at the time of grant owns
directly, or by reason of the attribution rules set forth in section 424(d)
of the Code is deemed to own, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of
its parent or subsidiary corporations.
(b) Duration of Options. An option shall be exercisable during such
period or periods as the Board may specify. The latest date on which an
option may be exercised (the "Final Exercise Date") shall be the date which
is ten years (five years, in the case of an incentive option granted to a
"ten-percent shareholder" as defined in (a) above) from the date the option
was granted or such earlier date as may be specified by the Board at the
time the option is granted.
(c) Exercise of Options.
(1) An option shall become exercisable at such time or times and upon
such conditions as the Board shall specify. In the case of an option not
immediately exercisable in full, the Board may at any time accelerate the
time at which all or any part of the option may be exercised.
(2) Any exercise of an option shall be in writing, signed by the
proper person and furnished to the Company, accompanied by (i) such
documents, representations, agreements, and certifications as may be
required by the Board and (ii) payment in full as specified below in
Section 6(d) for the number of shares for which the option is exercised.
(3) In the case of an option that is not an incentive option, the
Board shall have the right to require that the participant exercising the
option remit to the Company an amount sufficient to satisfy any federal,
state, or local withholding tax requirements (or make other arrangements
satisfactory to the Company with regard to such taxes) prior to
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
the delivery of any Stock pursuant to the exercise of the option. If
permitted by the Board either at the time of the grant of the option or the
time of exercise, the participant may elect, at such time and in such
manner as the Board may prescribe, to satisfy such withholding obligation
by (i) delivering to the Company Stock owned by such individual having a
fair market value equal to such withholding obligation, or (ii) requesting
that the Company withhold from the shares of Stock to be delivered upon the
exercise a number of shares of Stock having a fair market value equal to
such withholding obligation.
In the case of an incentive option, the Board may require as a
condition of exercise that the participant exercising the option agree to
inform the Company promptly of any disposition (within the meaning of
section 424(c) of the Code and the regulations thereunder) of Stock
received upon exercise. In addition, if at the time the option is
exercised the Board determines that under applicable law and regulations
the Company could be liable for the withholding of any federal or state tax
with respect to a disposition of the Stock received upon exercise, the
Board may require as a condition of exercise that the participant
exercising the option agree to give such security as the Board deems
adequate to meet the potential liability of the Company for the withholding
of tax, and to augment such security from time to time in any amount
reasonably deemed necessary by the Board to preserve the adequacy of such
security.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the option has
been transferred by the participant's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Stock pursuant to such exercise until the Company is satisfied as
to the authority of the person or persons exercising the option.
(d) Payment for Stock. Stock purchased upon exercise of an option
under the Plan shall be paid for as follows: (i) in cash, check acceptable
to the Company (determined in accordance with such guidelines as the Board
may prescribe), or money order payable to the order of the Company, or (ii)
if so permitted by the Board (which, in the case of an incentive option,
shall specify such method of payment at the time of grant), (A) through the
delivery of shares of Stock (which, in the case of Stock acquired from the
Company, shall have been held for at least six months unless the Board
specifies a shorter period) having a fair market value on the date of
exercise equal to the purchase price, or (B) by delivery of a promissory
note of the participant to the Company, such note to be payable
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
on such terms as are specified by the Board, or (C) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly
to the Company sufficient funds to pay the exercise price, or (D) by any
combination of the permissible forms of payment; provided, that if the
Stock delivered upon exercise of the option is an original issue of
authorized Stock, at least so much of the exercise price as represents the
par value of such Stock shall be paid other than with a personal check or
promissory note of the person exercising the option.
(e) Stock Appreciation Rights. The Board in its discretion may grant
SARs either in tandem with or independent of options awarded under the
Plan. Except as hereinafter provided, each SAR will entitle the
participant to receive upon exercise, with respect to each share of Stock
to which the SAR relates, the excess of (i) the share's value on the date
of exercise, over (ii) the share's fair market value on the date it was
granted. For purposes of clause (i), "value" shall mean fair market value;
provided, that the Board may adjust such value to take into account
dividends on the Stock and may also grant SARs that provide, in such
limited circumstances following a change in control of the Company (as
determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value
for the Stock during a period immediately preceding the change in control,
all as determined by the Board. The amount payable to a participant upon
exercise of an SAR shall be paid either in cash or in shares of Stock, as
the Board determines. Each SAR shall be exercisable during such period or
periods and on such terms as the Board may specify. No SAR shall be
exercisable after the date which is ten years from the date of grant.
(f) Delivery of Stock. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock
actually received by such participant under the Plan.
The Company shall not be obligated to deliver any shares of Stock
(i) until, in the opinion of the Company's counsel, all applicable federal
and state laws and regulations have been complied with, (ii) if the
outstanding Stock is at the time listed on any stock exchange, until the
shares to be delivered have been listed or authorized to be listed on such
exchange upon official notice of issuance, and (iii) until all other legal
matters in connection with the issuance and delivery of such shares have
been approved by the Company's counsel. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
(g) Nontransferability of Awards. No award may be transferred other
than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him or her.
(h) Death. Except as otherwise provided in an award, if a participant
dies, each award held by the participant immediately prior to death may be
exercised, to the extent it was exercisable immediately prior to death, by
his executor or administrator, or by the person or persons to whom the
award is transferred by will or the applicable laws of descent and
distribution, at any time within the period ending (i) 180 days after the
participant's death (in the event the participant's employment or other
service relationship with the Company shall terminate by reason of death),
or (ii) 120 days after the participant's death (in the event the
participant dies within the 60-day period following termination of the
participant's employment or other service relationship with the Company),
or such longer period as the Committee may determine. In no event shall an
award be exercised beyond the Final Exercise Date. Except as otherwise
provided in an award, all awards held by a participant immediately prior to
death that are not then exercisable shall terminate on the date of death.
(i) Other Termination of Service. Except as otherwise provided in an
award, if a participant's employment or other service relationship with the
Company terminates for any reason other than death, all awards held by the
participant shall terminate to the extent not exercisable immediately prior
to such event. To the extent exercisable immediately prior to termination
of employment or other service relationship, the award shall continue to be
exercisable thereafter for a period of 60 days (or such longer period as
the Board may determine, but in no event beyond the Final Exercise Date),
unless the participant's employment or other service relationship is
terminated for "cause" as a result of the participant's misconduct which,
in the judgment of the Board, casts discredit on him or her, or is
otherwise harmful to the business, interests, or reputation of the Company,
its parent, or a subsidiary, in which case all awards shall terminate
immediately. The Board may in any award provide for post-termination
exercise provisions different from those expressly set forth in the
preceding two sentences or in (h) above, including without limitation terms
allowing a later exercise by a former employee, consultant, or advisor (or,
in the case of a former employee, consultant, or advisor who is deceased,
the person or persons to whom the award is transferred by will or the laws
of descent and distribution) as to all or any portion of the award not
exercisable immediately prior to termination or employment or other service
relationship, but in no case may an award be exercised after the Final
Exercise Date. Except as otherwise provided in an award, after completion
of that 60-day or longer period, such awards shall terminate to the extent
not previously exercised, expired, or terminated. For purposes of this Plan,
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
the service relationship shall not be considered terminated (i) in the case of
sick leave or other bona fide leave of absence approved for purposes of the Plan
by the Board, so long as the participant's right to reemployment or
continued service is guaranteed either by statute or by contract, or (ii)
in the case of a transfer of employment or service relationship between the
Company and a subsidiary or parent, or between subsidiaries of the Company
or parent (provided the participant's direct or indirect service to the
Company continues), or to the service of a corporation (or a parent or
subsidiary corporation of such corporation) issuing or assuming an award in
a transaction to which section 424(a) of the Code applies.
(j) Mergers, etc. In the event of any merger, consolidation,
dissolution, or liquidation of the Company, the Board in its sole
discretion may, as to any outstanding awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under
the Plan and in the number and purchase price (if any) of shares subject to
such awards as it may determine, or accelerate, amend, or terminate such
awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any award, shall require
payment or other consideration which the Board deems equitable in the
circumstances).
The Board may grant awards under the Plan in substitution for
awards held by employees, consultants, or advisors of another corporation
who concurrently become employees, consultants, or advisors of the Company,
its parent, or a subsidiary as the result of a merger or consolidation of
that corporation with the Company, its parent, or a subsidiary, or as the
result of the acquisition by the Company, its parent, or a subsidiary of
property or stock of that corporation. The Company may direct that
substitute awards be granted on such terms and conditions as the Board
considers appropriate in the circumstances.
(k) Cancellation of Awards. The Board may provide in any award that
the award shall be cancelled or rescinded and any associated shares
forfeited, and the participant shall be obligated to pay to the Company any
gain received upon exercise, in the event that the participant competes
with the Company, discloses confidential information of the Company, or
otherwise is not in compliance with applicable provisions of any award, in
each case on such terms and conditions as the Board considers appropriate
in the circumstances.
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
7. EMPLOYMENT RIGHTS
_________________
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant
or advisor to, the Company, its parent, or any subsidiary of either or
affect in any way the right of the Company, its parent, or a subsidiary of
either to terminate the participant's relationship at any time. Except as
specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company, its parent, or a subsidiary of either to the
participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, AND TERMINATION
________________________________________________________________
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that
are not subject to the Plan, to issue to such participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may
be issued, and shall in no way affect the Company's right to operate its
business at its sole discretion.
The exercise of certain awards granted under the Plan may be made
contingent upon the closing of an initial public offering of the Company's
Stock. The grant of such awards under the Plan shall in no way obligate
the Company to consummate or consider a public offering of Stock, and the
failure of the Company to close a public offering of Stock shall not
entitle a participant granted such an award to any substitute award or
other benefit, or to any damages.
The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant, the Board may at any time cancel an
existing award in whole or in part and grant another award for such number
of shares as the Board specifies. The Board may at any time or times amend
the Plan or any outstanding award for the purpose of satisfying the
requirements of section 422 of the Code or of any changes in applicable
laws or regulations or for any other purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any further
grants of awards; except that no such amendment shall adversely affect the
rights of any participant (without his or her consent) under any award
previously granted.