COMTEX NEWS NETWORK, INC.
1995 STOCK OPTION PLAN, AS AMENDED
JANUARY 1, 2003
SECTION 1. Purpose of the Plan. The purpose of this Comtex
News Network, Inc. 1995 Stock Option Plan ("Plan") is to
encourage ownership of common stock, $.01 par value ("Common
Stock"), of Comtex News Network, Inc., a Delaware corporation
(the "Company"), by eligible key employees, directors and
consultants of the Company and its Affiliates (as defined below)
and to provide increased incentive for such employees, directors
and consultants to render services and to exert maximum effort
for the business success of the Company. In addition, the
Company expects that the Plan will further strengthen the
identification of employees, directors and consultants with the
stockholders. Certain options to be granted under this Plan are
intended to qualify as Incentive Stock Options ("ISOs") pursuant
to Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), while other options granted under this Plan will be
nonqualified options which are not intended to qualify as ISOs
("Nonqualified Options"), either or both as provided in the
agreements evidencing the options as provided in Section 6
hereof. As used in this Plan, the term "Affiliates" means any
"parent corporation" of the Company and any "subsidiary
corporation" of the Company within the meaning of Code Sections
424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
(a) Administrators. The Plan shall be administered by
administrators (the "Administrators") designated by the
Board of Directors of the Company (the "Board"), and
consisting of not fewer than two members of the Board.
Pursuant to Rule 16b-3 of the Securities Exchange Act of
1934, as amended ("Exchange Act"), no director shall serve
as an administrator unless he is a "disinterested person"
within the meaning of said Rule 16b-3.
(b) Administrators' Action. The Administrators shall
hold meetings at such times and places as they may
determine. A majority of Administrators shall constitute a
quorum, and all determinations of the Administrators shall
be made by not less than a majority thereof. Any decision or
determination reduced to writing and signed by a majority of
the Administrators shall be fully effective as if it had
been made by a majority vote of the Administrators at a
meeting duly called and held. The Administrators may
designate the Secretary of the Company or other Company
employees to assist the Administrators in the administration
of the Plan, and may grant authority to such persons to
execute award agreements or other documents on behalf of the
Administrators and the Company. Any duly constituted
committee of the Board satisfying the qualifications of this
Section 2 may be appointed as the Administrators.
(c) Administrators' Expenses. All expenses and
liabilities incurred by the Administrators in the
administration of the Plan shall be borne by the Company.
The Administrators may employ attorneys, consultants,
accountants or other persons.
SECTION 3. Stock Reserved for the Plan. Subject to
adjustment as provided in Section 6(i) hereof, the maximum number
of shares of Common Stock for which options may be granted
hereunder shall be 3,400,000, such number to increase
automatically on the first calendar day of each year, commencing
on January 1, 2001, by the lesser of (i) 750,000 shares, (ii)
five percent (5%) of the then outstanding number of shares of
common stock as of the end of the immediately preceding calendar
year or (iii) such amount as may be determined by the Board of
Directors. The maximum number of shares for which options may be
granted hereunder shall be evidenced by certificates signed by
the secretary of the Company from time to time which are filed
with the Plan in the principal place of business of the Company.
The shares subject to the Plan shall consist of authorized but
unissued shares of Common Stock and such number of shares shall
be and is hereby reserved for sale for such purpose. Any of such
shares which may remain unsold and which are not subject to
outstanding options at the termination of the Plan shall cease to
be reserved for the purpose of the Plan, but until termination of
the Plan or the termination of the last of the options granted
under the Plan, whichever last occurs, the Company shall at all
times reserve a sufficient number of shares to meet the
requirements of the Plan. Should any option expire or be
canceled prior to its exercise in full, the shares theretofore
subject to such option may again be made subject to an option
under the Plan.
SECTION 4. Eligibility. The persons eligible to
participate in the Plan as a recipient of options ("Optionee")
shall include only key employees, directors and consultants of
the Company or its Affiliates at the time the option is granted.
An employee or consultant who has been granted an option
hereunder may be granted an additional option or options, if the
Administrators shall so determine.
SECTION 5. Grant of Options.
(a) Administrators' Discretion. The Administrators
shall have sole and absolute discretionary authority (i) to
determine, authorize, and designate those key employees,
directors and consultants of the Company or its Affiliates
who are to receive options under the Plan, (ii) to determine
the number of shares of Common Stock to be covered by such
options and the terms thereof, and (iii) to determine the
type of option granted: ISO, Nonqualified Option or a
combination of ISO and Nonqualified Options; provided that a
non-employee director may not receive any ISOs. The
Administrators shall thereupon grant options in accordance
with such determinations as evidenced by a written option
agreement. Subject to the express provisions of the Plan,
the Administrators shall have discretionary authority to
prescribe, amend and rescind rules and regulations relating
to the Plan, to interpret the Plan, to prescribe and amend
the terms of the option agreements (which need not be
identical) and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
(b) Stockholder Approval. All options granted under
this Plan are subject to, and may not be exercised before,
the approval of this Plan by the affirmative vote of the
holders of a majority of the votes cast at a meeting of the
stockholders or by written consent in accordance with the
laws of the State of Delaware. Such approval was obtained
at the Company's Annual Meeting on December 18, 1995.
(c) Limitation on Incentive Stock Options. The
aggregate fair market value (determined in accordance with
Section 6(b) of this Plan at the time the option is granted)
of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Optionee during any
calendar year under all such plans of the Company and its
Affiliates shall not exceed $100,000.
SECTION 6. Terms and Conditions. Each option granted under
the Plan shall be evidenced by an agreement, in a form approved
by the Administrators, which shall be subject to the following
express terms and conditions and to such other terms and
conditions as the Administrators may deem appropriate.
(a) Option Period. The Administrators shall promptly
notify the Optionee of the option grant and a written
agreement shall promptly be executed and delivered by and on
behalf of the Company and the Optionee. The date of grant
shall be the date the option is actually granted by the
Administrators, even though the written agreement may be
executed and delivered by the Company and the Optionee after
that date. Each option agreement shall specify the period
for which the option thereunder is granted (which in no
event shall exceed ten years from the date of grant) and
shall provide that the option shall expire at the end of
such period. If the original term of an option is less than
ten years from the date of grant, the option may be amended
prior to its expiration, with the approval of the
Administrators and the Optionee, to extend the term so that
the term as amended is not more than ten years from the date
of grant. In the case of an ISO granted to an individual
who, at the time of grant, owns stock comprising more than
ten (10) percent of the total combined voting power of all
classes of stock of the Company or its Affiliate ("Ten
Percent Stockholder"), such period shall not exceed five
years from the date of grant.
(b) Option Price. The purchase price of each share of
Common Stock subject to each option granted pursuant to the
Plan shall be determined by the Administrators at the time
the option is granted and, in the case of ISOs, shall not be
less than 100% of the fair market value of a share of Common
Stock on the date the option is granted, as determined by
the Administrators. In the case of an ISO granted to a Ten
Percent Stockholder, the option price shall not be less than
110% of the fair market value of a share of Common Stock on
the date the option is granted. The purchase price of each
share of Common Stock subject to a Nonqualified Option under
this Plan shall be determined by the Administrators prior to
granting the option. The Administrators shall set the
purchase price for each share subject to a Nonqualified
Option at such price as the Administrators in their sole
discretion shall determine, provided that the purchase price
of each share of Common Stock subject to a Nonqualified
Option shall not be greater than the fair market value of a
share of Common Stock on the date the option is granted as
determined by the Administrators.
For all purposes under the Plan, the fair market value
of a share of Common Stock on a particular date shall be
equal to the average of the reported high and low bid prices
of the Common Stock for the preceding ten (10) days. In the
event the Common Stock is not actively traded at the time a
determination of its value is required to be made hereunder,
the determination of its fair market value shall be made by
the Administrators in such manner as it deems appropriate.
(c) Exercise Period. The Administrators may provide
in the option agreement that an option may be exercised in
whole, immediately, or is to be exercisable in increments.
However, no portion of any option may be exercisable by an
Optionee prior to the approval of the Plan by the
stockholders of the Company.
(d) Procedure for Exercise. Options shall be
exercised by the delivery of written notice to the Secretary
of the Company setting forth the number of shares with
respect to which the option is being exercised. Such notice
shall be accompanied by cash or cashier's check, bank draft,
postal or express money order payable to the order of the
Company, or at the option of the Administrators, in Common
Stock theretofore owned by such Optionee (or any combination
of cash and Common Stock). Notice may also be delivered by
telefax provided that the purchase price of such shares is
delivered to the Company via wire transfer on the same day
the telefax is received by the Company. The notice shall
specify the address to which the certificates for such
shares are to be mailed.
As promptly as practicable after receipt of such written
notification and payment, the Company shall deliver to the
Optionee certificates for the number of shares with respect
to which such option has been so exercised, issued in the
Optionee's name or such other name as the Optionee directs;
provided, however, that such delivery shall be deemed
effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificates in the United
States mail, addressed to the Optionee at the address
specified pursuant to this Section 6(d).
(e) Assignability. An option shall not be assignable
or otherwise transferable except by will or by the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act, as amended, or the
rules thereunder. During the lifetime of an Optionee, an
option shall be exercisable only by him.
(f) Incentive Stock Options. Each option agreement
may contain such terms and provisions as the Administrators
may determine to be necessary or desirable in order to
qualify an option designated as an incentive stock option.
(g) No Rights as Stockholder. No Optionee shall have
any rights as a stockholder with respect to shares covered
by an option until the option is exercised by the written
notice and accompanied by payment as provided in clause (d)
above.
(h) Extraordinary Corporate Transactions. The
existence of outstanding options shall not affect in any way
the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger
or consolidation of the Company, or any issuance of Common
Stock or other securities or subscription rights thereto, or
any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. If
the Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its assets
or dissolves (each of the foregoing a "Fundamental Change"),
then thereafter upon any exercise of an option theretofore
granted, the Optionee shall be entitled to purchase under
such option, in lieu of the number of shares of Common Stock
as to which option shall then be exercisable, the number and
class of shares of stock and securities to which the
Optionee would have been entitled pursuant to the terms of
the Fundamental Change if, immediately prior to such
Fundamental Change, the Optionee had been the holder of
record of the number of shares of Common Stock as to which
such option is then exercisable. If (i) the Company shall
not be the surviving entity in any merger or consolidation
(or survives only as a subsidiary of another entity), (ii)
the Company sells all or substantially all of its assets to
any other person or entity (other than a wholly-owned
subsidiary), (iii) any person or entity (including a "group"
as contemplated by Section 13(d) (3) of the Exchange Act)
acquires or gains ownership or control of (including,
without limitation, power to vote) more than 50% of the
outstanding shares of Common Stock, (iv) the Company is to
be dissolved and liquidated, or (v) as a result of or in
connection with a contested election of directors, the
persons who were directors of the Company before such
election shall cease to constitute a majority of the Board,
the Administrators, in their sole discretion, may accelerate
the time at which all or a portion of an Optionee's Options
may be exercised for a limited period of time before or
after a specified date.
(i) Changes in Company's Capital Structure. If the
outstanding shares of Common Stock or other securities of
the Company, or both, for which the option is then
exercisable shall at any time be changed or exchanged by
declaration of a stock dividend, stock split, or combination
of shares, the number and kind of shares of Common Stock or
other securities which are subject to the Plan or subject to
any options theretofore granted, and the option prices,
shall be appropriately and equitably adjusted so as to
maintain the proportionate number of shares or other
securities without changing the aggregate option price.
(j) Acceleration of Options. Except as hereinbefore
expressly provided, (i) the issuance by the Company of
shares of stock of any class of securities convertible into
shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares
or obligations of the Company convertible into such shares
or other securities, (ii) the payment of a dividend in
property other than Common Stock or (iii) the occurrence of
any similar transaction, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares
of Common Stock subject to options theretofore granted or
the purchase price per share, unless the Administrators
shall determine in their sole discretion that an adjustment
is necessary to provide equitable treatment to the Optionee.
Notwithstanding anything to the contrary contained in this
Plan, the Administrators may in their sole discretion
accelerate the time at which any option may be exercised,
including, but not limited to, upon the occurrence of the
events specified in this Section 6.
SECTION 7. Amendments or Termination. The Board may amend,
alter or discontinue the Plan, but no amendment or alteration
shall be made which would impair the rights of any Optionee,
without his consent, under any option theretofore granted, or
which, without the approval of the stockholders, would: (i)
except as is provided in Section 6(i) of the Plan, increase the
total number of shares reserved for the purposes of the Plan,
(ii) change the class of persons eligible to participate in the
Plan as provided in Section 4 of the Plan, (iii) extend the
applicable maximum option period provided for in Section 6(a) of
the Plan, (iv) extend the expiration date of this Plan set forth
in Section 14 of the Plan, (v) except as provided in Section 6(i)
of the Plan, decrease to any extent the option price of any
option granted under the Plan, or (vi) withdraw the
administration of the Plan from the Administrators.
SECTION 8. Compliance With Other Laws and Regulations. The
Plan, the grant and exercise of options thereunder, and the
obligation of the Company to sell and deliver shares under such
options, shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion
of any registration or qualification of such shares under any
federal or state law or issuance of any ruling or regulation of
any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable. Any
adjustments provided for in subparagraphs 6(h), (i) and (j) shall
be subject to any shareholder action required by Delaware
corporate law.
SECTION 9. Purchase for Investment. Unless the options and
shares of Common Stock covered by this Plan have been registered
under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person
exercising an option under this Plan may be required by the
Company to give a representation in writing that he is acquiring
such shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any
part thereof.
SECTION 10. Taxes.
(a) The Company may make such provisions as it may
deem appropriate for the withholding of any taxes which it
determines is required in connection with any options
granted under this Plan.
(b) Notwithstanding the terms of Paragraph 11(a), any
Optionee may pay all or any portion of the taxes required to
be withheld by the Company or paid by him in connection with
the exercise of a nonqualified option by electing to have
the Company withhold shares of Common Stock, or by
delivering previously owned shares of Common Stock, having a
fair market value, determined in accordance with Paragraph
6(b), equal to the amount required to be withheld or paid.
An Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). All such elections are irrevocable and
subject to disapproval by the Administrators.
SECTION 11. Replacement of Options. The Administrators from
time to time may permit an Optionee under the Plan to surrender
for cancellation any unexercised outstanding option and receive
from the Company in exchange an option for such number of shares
of Common Stock as may be designated by the Administrators. The
Administrators may, with the consent of the person entitled to
exercise any outstanding option, amend such option, including
reducing the exercise price of any option to not less than the
fair market value of the Common Stock at the time of the
amendment and extending the term thereof.
SECTION 12. No Right to Company Employment. Nothing in this
Plan, or as a result of any option granted pursuant to this Plan,
shall confer on any individual any right to continue in the
employ of the Company or interfere in any way with the right of
the Company to terminate an individual's employment at any time.
The option agreements may contain such provisions as the
Administrators may approve with reference to the effect of
approved leaves of absence.
SECTION 13. Liability of Company. The Company and any
Affiliate which is in existence, or hereafter comes into
existence, shall not be liable to an Optionee or other persons as
to:
(a) The Non-Issuance of Shares. The non-issuance or
sale of shares as to which the Company has been unable to
obtain from any regulatory body having jurisdiction the
authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected,
but not realized, by any Optionee or other person due to the
exercise of any option granted hereunder.
SECTION 14. Effectiveness and Expiration of Plan. The Plan
shall be effective on the date the Board adopts the Plan. The Plan
shall expire ten years after the date the Board approves the
Plan and thereafter no option shall be granted pursuant to the Plan.
SECTION 15. Non-Exclusivity of the Plan. Neither the
adoption by the Board, nor the submission of the Plan to the
stockholders of the Company for approval, shall be construed as
creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including
without limitation, the granting of restricted stock or stock
options otherwise than under the Plan, and such arrangements may
be either generally applicable or applicable only in specific
cases.
SECTION 16. Governing Law. This Plan and any agreements
hereunder shall be interpreted and construed in accordance with
the laws of the State of Delaware and applicable federal law.
SECTION 17. Cashless Exercise. The Administrators also may
allow cashless exercises as permitted under Federal Reserve
Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Administrators
determine to be consistent with the Plan's purpose and applicable
law. The proceeds from such a payment shall be added to the
general funds of the Company and shall be used for general
corporate purposes.