DotsConnect, Inc.
2000 Long-Term Incentive Plan
TABLE OF CONTENTS
ss.1 Background and Purpose................................................1
ss.2 Definitions...........................................................1
2.1 Affiliate....................................................1
2.2 Board........................................................1
2.3 Change of Control............................................1
2.4 Committee....................................................2
2.5 Company......................................................2
2.6 Disability...................................................2
2.7 Effective Date...............................................2
2.8 Employee.....................................................2
2.9 Fair Market Value............................................2
2.10 Option.......................................................3
2.11 Option Agreement.............................................3
2.12 Option Price.................................................3
2.13 Plan.........................................................3
2.14 Retirement...................................................3
2.15 Stock........................................................3
ss.3 Stock Reserved for Issuance Under Plan................................3
ss.4 Committee.............................................................4
ss.5 Eligibility...........................................................4
ss.6 Options...............................................................4
ss.7 Nontransferability....................................................5
ss.8 Securities Registration...............................................5
ss.9 Life of Plan..........................................................5
ss.10 Adjustment............................................................6
ss.11 Change of Control.....................................................7
ss.12 Amendment or Termination..............................................7
ss.13 Miscellaneous.........................................................8
DotsConnect, Inc.
2000 Long-Term Incentive Plan
ss. 1
Background and Purpose
The purpose of this Plan is to promote the interest of DotsConnect,
Inc. through the granting of Options in order to (a) attract and retain
Employees, (b) provide an additional incentive to each Employee to work to
increase the value of the Company, and (c) provide each Employee with a stake in
the future of the Company that is similar to that of the Company's other equity
owners.
ss. 2
Definitions
Each term set forth in this ss. 2 shall have the meaning set forth
opposite such term and any reference to the plural of a defined term shall
include the singular.
2.1 Affiliate - shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations of the Securities Exchange Act of
1934.
2.2 Board - means the Board of Directors of the Company.
2.3 Change of Control - means:
(a) the acquisition by any "person" ("Person"), as such term
is used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company or a
subsidiary or any Company employee benefit plan (including its trustee)
or an "Exempt Person" as defined below), of "beneficial ownership" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 20% or more of the total
number of shares of the Company's then outstanding securities; or
(b) consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
or stock of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the total number of shares of the Company's
outstanding securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than two-thirds (2/3)
of, respectively, the total number of shares of the then outstanding
securities of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or
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more subsidiaries)in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the total
number of shares of the Company's outstanding securities, (ii) no
Person (excluding any corporation resulting from such Business
Combination, or any employee benefit plan (including its trustee)
of the Company or such corporation resulting from such Business
Combination, or an "Exempt Person" as defined below) beneficially owns,
directly or indirectly, 20% or more of, respectively, the total number
of shares of the then outstanding securities of the corporation
resulting from such Business Combination except to the extent that such
ownership existed prior to the Business Combination and (iii) at least
two-thirds (2/3) of the members of the board of directors of the
Corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination.
For purposes of this Section 2.3, a "Change of Control" shall not result from
any transaction precipitated by the Company's insolvency, appointment of a
conservator, or determination by a regulatory agency that the Company is
insolvent, nor from any transaction initiated by the Company in regard to
converting from a publicly traded company to a privately held company.
2.4 Committee - means the Board, or such committee as may be
designated by the Board; provided, however, that with respect to Options granted
to employees of Total System Services, Inc., the term "Committee" shall refer to
the Compensation Committee of the Board of Directors of Total System Services,
Inc.
2.5 Company - means DotsConnect, Inc. and any successor to
DotsConnect, Inc.
2.6 Disability - shall have the meaning ascribed to such term in the
Employee's governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.
2.7 Effective Date - means the effective date of this Plan, which is
May 1, 2000.
2.8 Employee - means an employee of the Company or an Affiliate or a
former employee of the Company or an Affiliate who has an outstanding Option.
2.9 Fair Market Value - means as of any date
(a) if the Stock is not traded on a national securities
exchange or quoted on a national quotation system, the price that the
Committee acting in good faith determines through any reasonable
valuation method to be the price at which a share of Stock might change
hands between a willing buyer and a
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willing seller, neither being under any compulsion to buy or to sell
and both having reasonable knowledge of the relevant facts, or
(b) if the Stock is traded on a national securities exchange
or quoted on a national quotation system, (1) the closing price of the
Stock on such date, (2) if there was no closing price of the Stock on
such date, the closing price on the next preceding business day, or (3)
if there was no closing price on the next preceding business day, the
value determined by the Committee in accordance with ss. 2.9(a).
2.10 Option - means an option to purchase Stock granted in accordance
with ss.6.
2.11 Option Agreement - means the document that sets forth the terms
and conditions of an Option.
2.12 Option Price - means the price to purchase one share of Stock
upon the exercise of an Option.
2.13 Plan - means this DotsConnect, Inc. 2000 Long-Term Incentive
Plan, as amended from time to time.
2.14 Retirement - means termination of employment after (i) attainment
of age sixty-five (65); or (ii) attainment of age fifty (50) with fifteen (15)
years of service.
2.15 Stock - means the common stock of the Company or any successor to
the Company.
ss. 3
Stock Reserved for Issuance Under Plan
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 1,500,000. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
If any shares of Stock that have been subject to option cease to be
subject to option without having been exercised, or such options are otherwise
terminated without having been exercised, such shares shall again be available
for distribution in connection with future Options under the Plan.
Notwithstanding any provision in the Plan to the contrary, the maximum
number of shares of Stock that may be granted to any one Employee in any
calendar year shall be 500,000.
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ss. 4
Committee
This Plan shall be administered by the Committee. The Committee acting
in its absolute discretion shall interpret this Plan and take such action in the
administration and operation of this Plan as the Committee deems appropriate
under the circumstances. Any action of the Committee shall be binding on the
Company, on each affected Employee and on each other person directly or
indirectly affected by such action.
ss. 5
Eligibility
Only employees of the Company or an Affiliate shall be eligible for the
grant of Options.
ss. 6
Options
6.1 Committee Action. The Committee acting in its absolute discretion
may grant Options to Employees from time to time. Each grant of an Option shall
be evidenced by an Option Agreement. The Option Agreement shall incorporate such
other terms and conditions of the grant as the Committee acting in its absolute
discretion deems appropriate.
6.2 Option Price. The Option Price shall be no less than the Fair
Market Value of Stock on the date the Option is granted. The Option Price shall
be payable in full upon the exercise of any Option. At the discretion of the
Committee, an Option Agreement can provide for the payment of the Option Price
either in cash, by check acceptable to the Committee, or by surrender of Stock
that has been held for at least six (6) months, or in any combination of such
cash, check and Stock. The value of any Stock used as payment in the exercise of
an Option shall be equal to the Fair Market Value of Stock on the date of
exercise of the Option.
6.3 Exercise Period. Each Option shall be exercisable in whole or in
part at such time or times as set forth in the related Option Agreement, but no
Option shall be exercisable, with respect to any Stock subject to such Option,
after the tenth anniversary of the date of grant of the Option. An Option
Agreement may provide for the exercise of an Option after the employment of an
Employee has terminated for any reason whatsoever, including retirement, death
or disability.
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ss. 7
Nontransferability
An Option shall not be transferable by an Employee other than by will
or by the laws of descent and distribution. During an Employee's lifetime, an
Option shall be exercisable only by the Employee or, if the Option Agreement
provides for exercise after the disability of the Employee and the Employee is
legally incapacitated as a result of such disability, the Option shall be
exercisable by the Employee's legal representative. However, the person or
persons to whom an Option is transferred by will or by the laws of descent and
distribution thereafter shall be treated as the Employee under this Plan.
ss. 8
Securities Registration
Each Option Agreement shall provide that, upon the receipt of Stock,
the Employee shall, if so requested by the Company, (a) hold such Stock for
investment and not with a view of resale or distribution to the public and (b)
deliver to the Company a written statement satisfactory to the Company to that
effect. As for Stock issued pursuant to this Plan, the Company at its expense
shall take such action as it deems necessary or appropriate to register the
original issuance of such Stock to an Employee under any applicable securities
laws or to qualify such issuance for an exemption from the registration
requirements of such laws prior to the issuance of such Stock to an Employee.
However, the Company shall have no obligation whatsoever to take any such action
in connection with the transfer, resale or other disposition of such Stock by an
Employee.
ss. 9
Life of Plan
No Option shall be granted under this Plan on or after the earlier of
(a) the tenth anniversary of the Effective Date, in which
event this Plan shall continue in effect until all outstanding Options
have been exercised in full or are no longer exercisable, or
(b) the date on which all of the Stock authorized for issuance
under ss. 3 has been issued or is no longer available for use under
this Plan (as a result of use to satisfy a withholding obligation), in
which event this Plan also shall terminate on such date.
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ss. 10
Adjustment
10.1 Capital Structure. In the event of changes in the capitalization
of the Company resulting from Stock dividends or Stock splits, the Committee
shall adjust, and in the event of changes in the capitalization of the Company
resulting from a merger, consolidation, acquisition, separation, reorganization
or liquidation, the Committee may (in its absolute discretion) adjust the
number, kind or class (or any combination thereof) of Stock subject to Options
and the Option Price of such Options. Any such adjustments shall be made in an
equitable manner to reflect such change.
10.2 Conversion to Options for Other Securities. In the event
securities of the Company, or of a subsidiary of the Company, or of an entity
formed for the purpose of causing the business of the Company to be operated in
a publicly traded entity, become publicly traded, or in anticipation of such
event, the Committee shall take such actions as may be necessary, if any, to
cause outstanding Options to be converted into options to purchase such
securities that are or will be publicly traded. Any such option into which an
Option is converted shall reflect such terms (including the number, kind and
class of securities subject to the option and the option price) as the Committee
deems equitably comparable to the terms of the Options converted; provided,
however, the Committee under no circumstances shall be obligated to cause to be
granted options to purchase the same percentage of the equity interest in the
Company, subsidiary or other entity as could have been purchased through
exercise of the converted Options; and provided, further, that the Committee
shall not be required to take any action in connection with such conversion that
would result in compensation expense to the Company or to the issuer of such
substituted options by reason of, or in connection with, such conversion.
10.3 Fractional Shares. If any adjustment under this ss. 10 would
create a fractional share or a right to acquire a fractional share of Stock,
such fractional share of Stock shall be disregarded and the number of shares
that otherwise would result from such adjustment shall be the next lower number
of shares, rounding all fractions downward. An adjustment made under this ss. 10
by the Committee shall be conclusive and binding on all affected persons.
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ss. 11
Change of Control
In the event of a Change of Control, all outstanding Options of persons
who are employees of the Company or an Affiliate on the date of the Change of
Control will vest in full. In addition, as part of the Option Agreement, the
Committee in its discretion may require that an Employee surrender his or her
Option in exchange for a payment by the Company in an amount equal to the amount
by which the then Fair Market Value of the Stock subject to the Employee's
Option exceeds the Option Price for such Stock, in which case the Option will
terminate upon such surrender.
ss. 12
Amendment or Termination
The Board may amend this Plan from time to time to the extent that the
Board deems necessary or appropriate and the Board also may suspend the granting
of Options at any time and terminate this Plan at any time; provided, however,
except as provided in ss. 13.6, neither the Board nor the Committee may amend or
cancel an Option, without the holder's consent, if such amendment or
cancellation would adversely affect the holder's right to purchase an equity
interest in the Company on terms equitably comparable (as determined by the
Committee in its absolute discretion) to the terms of the Option in effect prior
to such amendment or cancellation to the extent the Employee is vested in the
Option immediately prior to the date of such amendment or cancellation; provided
the Committee under no circumstances shall be obligated to preserve the
Employee's opportunity to purchase the same percentage of the equity interest in
the Company as the Employee could have purchased before the date of such
amendment or cancellation.
Because the Plan will be submitted to Total System Services, Inc.
stockholders for approval, Options granted to Employees of Total System
Services, Inc. are contingent upon such stockholder approval of the Plan. If
stockholder approval of this Plan is obtained, no amendment, alteration or
discontinuation shall be made by the Board which, without the approval of such
stockholders, would:
(a) increase the total number of shares reserved for the
purpose of the Plan, except as provided for in accordance with Section
10 of the Plan;
(b) decrease the option price of any Stock Option to less than
100% of the Fair Market Value on the date of the granting of the
option, except as provided for in accordance with Section 10 of the
Plan;
(c) change the Participants or class of Participants eligible
to participate in the Plan;
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(d) extend the maximum option period under Section 6.3 of the
Plan; or
(e) materially increase in any other way the benefits accruing
to Participants.
ss. 13
Miscellaneous
13.1 Option Holder Rights. No holder of an Option shall have any rights
as a stockholder of the Company as a result of the grant of an Option or his or
her exercise of such Option until such person is reflected on the Company's
books as the holder of the applicable Stock.
13.2 No Contract of Employment. The grant of an Option shall not
constitute a contract of employment and shall not confer on an Employee any
rights upon his or her termination of employment in addition to those rights, if
any, expressly set forth in the related Option Agreement.
13.3 Withholding. Each grant of an Option shall be made subject to the
condition that the Employee consents to whatever action the Committee directs to
satisfy the federal and state tax withholding requirements, if any, that the
Committee in its discretion deems applicable to the exercise of such Option.
13.4 Construction. The headings in this Plan are for convenience of
reference only and are not to be given substantive meaning. All references to
sections (ss.) are to sections (ss.) of this Plan unless otherwise indicated.
This Plan shall be construed under the laws of the State of Georgia.
13.5 Other Conditions. Each Option Agreement may require that an
Employee (as a condition to the exercise of an Option) enter into any agreement
or make such representations prepared by the Company, including any agreement
that restricts the transfer of Stock acquired pursuant to the exercise of an
Option or provides for the repurchase of such Stock by the Company under certain
circumstances.
13.6 Securities Law. The Committee shall have the right to amend or
cancel any grant of an Option or to withhold consent to or otherwise restrict
the transfer of any Stock issued upon exercise of Options granted under this
Plan as the Committee deems appropriate in order to satisfy any condition or
requirement under any federal or state securities or other law, regulation or
rule applicable to such grant or transfer, or obtain applicable governmental
agency approval.
13.7 Loans. If approved by the Committee in its sole discretion, the
Company may lend money to, or guarantee loans made by a third party to, any
Employee to finance the exercise of any Option, and the exercise of an Option
with the proceeds of any such loan shall be treated as an exercise for cash. If
approved by the Committee in its sole discretion, the Company also may, in
accordance with an Employee's instructions, transfer Stock acquired in the
exercise of an Option directly to a third party in connection with any
arrangement made by the Employee for financing the exercise of such Option.
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13.8 Beneficiary Designation. Each Employee under the Plan may, from
time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by the same
Employee, shall be in a form prescribed by the Company, and will be effective
only when filed by the Employee in writing with the Company during the
Employee's lifetime. In the absence of any such designation, benefits remaining
unpaid at the Employee's death shall be paid to the Employee's estate.
13.9 Indemnification. Each person who is, or shall have been, a member
of the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon, or reasonably incurred by, him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
13.10 Successors. All obligations of the Company under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
IN WITNESS WHEREOF, DotsConnect, Inc. has caused its duly
authorized officer to execute this Plan to evidence its adoption of this Plan.
DotsConnect, Inc.
By: _______________________________
Date: _______________________________