Exhibit 10.13
LANCIT MEDIA ENTERTAINMENT, LTD.
1997 INCENTIVE STOCK PLAN
1. Purpose. The purpose of the 1997 Incentive Stock Plan (the "Plan") is to
aid the Company in attracting, retaining and motivating officers,
consultants, key employees and directors of the Company by providing them
with incentives for making significant contributions to the growth and
profitability of the Company. The Plan is designed to accomplish this goal
by offering stock options and other incentive awards, thereby providing
Participants with a proprietary interest in the growth, profitability and
success of the Company.
2. Definitions.
(a) Award. Any form of stock option, stock appreciation right, stock or
cash award granted under the Plan, whether granted singly, in
combination or in tandem, pursuant to such terms, conditions and
limitations as the Board or the Committee may establish in order to
fulfill the objectives, and in accordance with the terms and
conditions, of the Plan.
(b) Award Agreement. An agreement between the Company and a Participant
setting forth the terms, conditions and limitations applicable to an
Award.
(c) Board. The Board of Directors of Lancit Media Entertainment, Ltd.
(d) Code. The Internal Revenue Code of 1986, as amended from time to time.
(e) Committee. Such committee of the Board as may be designated from time
to time by the Board to administer the Plan or any subplan under the
Plan. Any such committee shall consist of not less than two members of
the Board who are not officers or employees of the Company, provided
that, unless the Board otherwise determines, each such non-employee
director on such committee must meet the requirements of Section 16(a)
of the Securities Exchange Act of 1934, as amended, and Section 162(m)
of the Code.
(f) Company. Lancit Media Entertainment, Ltd. and its direct and indirect
parents and subsidiaries.
(g) Fair Market Value. If the Stock is listed on the New York Stock
Exchange (or other national exchange), the average of the high and low
sale prices as reported on the New York Stock Exchange (or such other
exchange) or, if the Stock is not listed on a national exchange, the
last quoted sale price or, if not so quoted, the average of the high
bid and low asked prices for a share of the Stock in the
over-the-counter market, as reported by the National Association of
Securities Dealers through its Automated Quotation System or
otherwise, in either case for the date in question; provided that if
no transactions in the Stock are reported for that date, the average
of the high and low sale prices or last quoted sale price or, if not
so quoted, the average of the high bid and low asked prices as so
reported for the preceding day on which transactions in the Stock were
effected, and provided, further, that if no transactions in the Stock
were effected within 10 business days preceding such relevant date, or
if otherwise deemed appropriate by the Board or the Committee, the
fair market value of the Stock shall be as determined by the Board or
the Committee.
(h) Lancit. Lancit Media Entertainment, Ltd.
(i) Participant. An officer, consultant, key employee or director of the
Company to whom an Award has been granted.
(j) Stock. Authorized and issued or unissued shares of Common Stock, par
value $.001 per share, of Lancit or any security issued in exchange or
substitution therefor.
3. Eligibility. Only officers, key employees, and directors who are also
officers or employees of the Company or who have been designated by the
Board as eligible to receive Awards and consultants who have been so
designated by the Board or the Committee are eligible to receive Awards
under the Plan. Key employees are those employees who hold positions of
responsibility or whose performance, in the judgment of the Board or the
Committee, can have a significant effect on the growth and profitability of
the Company.
4. Stock Available for Awards. Subject to Section 14 hereof, a total of
400,000 shares of Stock shall be available for issuance pursuant to Awards
granted under the Plan; provided, however, that the aggregate number of
shares of Stock subject to options and upon which stock appreciation rights
are based pursuant to Awards hereunder shall not exceed 200,000 shares for
any Participant during any fiscal year; and, provided, further, that the
Board or the Committee shall have the power to grant Awards to a
Participant exceeding such annual maximum amount, but such Awards shall not
qualify as "performance based" for purposes of Section 162(m) of the Code
to the extent of such excess. From time to time, the Board and appropriate
officers of Lancit shall file such documents with governmental authorities
and, if the Stock is listed on the New York Stock Exchange (or other
national exchange), with such stock exchange, as are required to make
shares of Stock available for issuance pursuant to Awards and publicly
tradeable. Shares of Stock related to Awards, or portions of Awards, that
are forfeited, canceled or terminated, expire unexercised, are surrendered
in exchange for other Awards, or are settled in cash in lieu of Stock or in
such manner that all or some of the shares of Stock covered by an Award are
not and will not be issued to a Participant, shall be restored to the total
number of shares of Stock available for issuance pursuant to Awards.
5. Administration.
(a) General. The Plan shall be administered by the Board or, to the extent
determined by the Board, by the Committee, which shall have full and
exclusive power to (i) authorize and grant Awards to persons eligible
to receive Awards under the Plan; (ii) establish the terms, conditions
and limitations of each Award or class of Awards, including terms,
conditions and limitations governing the extent (if any) to which the
Award may be assigned or transferred provided that, awards shall not
be assignable or transferable to any person who is not at the time of
transfer a member of the Participant's immediate family or to any
entity that is not established for the benefit of, or wholly-owned by,
the Participant or a member or members of the Participant's immediate
family; (iii) construe and interpret the Plan and all Award
Agreements; (iv) grant waivers of Plan restrictions; (v) adopt and
amend such rules, procedures, regulations and guidelines for carrying
out the Plan as it may deem necessary or desirable; and (vi) take any
other action necessary for the proper operation and administration of
the Plan, all of which powers shall be exercised in a manner
consistent with the objectives, and in accordance with the terms and
conditions, of the Plan. The powers of the Board or the Committee, as
applicable, shall include, but shall not be limited to, the authority
to (A) adopt such subplans as may be necessary or appropriate (1) to
provide for the authorization and granting of Awards to promote
specific goals or for the benefit of specific classes of Participants,
(2) to provide for grants of Awards by means of formulae, standardized
criteria or otherwise, or (3) for any other purposes as are consistent
with the objectives of the Plan, and to segregate shares of Stock
available for issuance under the Plan generally as being available
specifically for the purposes of one or more subplans, and (B) subject
to Section 11 hereof, adopt modifications, amendments, rules,
procedures, regulations, subplans and the like as may be necessary or
appropriate (1) to comply with provisions of the laws of other
countries in which the Company may operate in order to assure the
effectiveness of Awards granted under the Plan and to enable
Participants employed in such other countries to receive advantages
and benefits under the Plan and such laws, (2) to effect the
continuation, acceleration or modification of Awards under certain
circumstances, including events which might constitute a Change in
Control (as set forth in Section 7 hereof) of Lancit, or (3) for any
other purposes as are consistent with the objectives of the Plan. All
such modifications, amendments, rules, procedures, regulations and
subplans shall be deemed to be a part of the Plan as if stated herein.
(b) Committee Actions. All actions of the Committee with respect to the
Plan shall require the vote of a majority of its members or, if there
are only two members, by the vote of both. Any action of the Committee
may be taken by a written instrument signed by a majority (or both
members) of the Committee, and any action so taken shall be as
effective as if it had been taken by a vote at a meeting. All
determinations and acts of the Committee as to any matters concerning
the Plan, including interpretations or constructions of the Plan and
any Award Agreement, shall be conclusive and binding on all
Participants and on any parties validly claiming through any
Participants.
6. Delegation of Authority. The Board or the Committee may delegate to the
Chief Executive Officer of Lancit and to other executive officers of the
Company certain of its admini strative duties under the Plan, pursuant to
such conditions or limitations as the Board or the Commit tee may
establish, except that neither the Board nor the Committee may delegate its
authority with respect to (a) the selection of eligible persons as
Participants in the Plan, (b) the granting or timing of Awards,
(c) establishing the amount, terms and conditions of any such Award, (d)
interpreting the Plan, any subplan or any Award Agreement or (e) amending
or otherwise modifying the terms or provisions of the Plan, any subplan or
any Award Agreement.
7. Awards. Subject to Section 4 and Section 19, the Board or the Committee
shall determine the types and timing of Awards to be made to each
Participant and shall set forth in the related Award Agreement the terms,
conditions and limitations applicable to each Award. Awards may include,
but are not limited to, those listed below in this Section 7. Awards may be
granted singly, in combination or in tandem, or in substitution for Awards
previously granted under the Plan. Awards may also be made in combination
or in tandem with, in substitution for, or as alternatives to, grants or
rights under any other benefit plan of the Company, including any such plan
of any entity acquired by, or merged with or into, the Company. Any such
Awards made in substitution for, or as alternatives to, grants or rights
under a benefit plan of an entity acquired by, or merged with or into, the
Company in order to give effect to the transaction shall be deemed to be
issued in accordance with the terms and conditions of the Plan. Awards
shall be effected through Award Agreements executed by the Company in such
forms as are approved by the Board or the Committee from time to time.
All or part of any Award may be subject to conditions established by the
Board or the Committee and set forth in the Award Agreement, which
conditions may include, without limitation, achievement of specific
business objectives, increases in specified indices, attainment of growth
rates and other measurements of Company performance.
The Board or the Committee may determine to make any or all of the
following Awards:
(a) Stock Options. A grant of a right to purchase a specified number of
shares of Stock at an exercise price not less than 100% of the Fair
Market Value of the Stock on the date of grant, during a specified
period, all as determined by the Board or the Committee. Without
limitation, a stock option may be in the form of (i) an incentive
stock option which, in addition to being subject to such terms,
conditions and limitations as are established by the Board or the
Committee, complies with Section 422 of the Code or (ii) a
non-qualified stock option subject to such terms, conditions and
limitations as are established by the Board or the Committee.
(b) Stock Appreciation Rights. A right to receive a payment, in cash or
Stock, equal to the excess of the Fair Market Value (or other
specified valuation) of a specified number of shares of Stock on the
date the stock appreciation right ("SAR") is exercised over the Fair
Market Value (or other specified valuation) on the date of grant of
the SAR, except that if an SAR is granted in tandem with a stock
option, valuations on the grant and exercise dates shall be no less
than as determined on the basis of Fair Market Value. The eventual
amount, vesting or issuance of an SAR may be subject to future
service, performance standards and such other restrictions and
conditions as may be established by the Board or the Committee.
(c) Stock Awards. An Award made in Stock or denominated in units of Stock.
The eventual amount, vesting or issuance of a Stock Award may be
subject to future service, performance standards and such other
restrictions and conditions as may be established by the Board or the
Committee. Stock Awards may be based on Fair Market Value or another
specified valuation.
(d) Cash Awards. An Award made or denominated in cash. The eventual amount
of a cash Award may be subject to future service, performance
standards and such other restrictions and conditions as may be
established by the Board or the Committee.
Dividend equivalency rights, on a current or deferred basis, may be
extended to and be made part of any Award denominated in whole or in part
in Stock or units of Stock, subject to such terms, conditions and
restrictions as the Board or the Committee may establish.
Notwithstanding the provisions of the paragraphs of this Section 7, Awards
may be subject to acceleration of exercisability or vesting in the event of
a Change in Control of Lancit (i) as set forth in agreements between Lancit
and certain of its officers, directors and key employees which provide for
certain protections and benefits in the event of a change in control (as
defined in such agreements) or (ii) as may otherwise be determined by the
Board or the Committee under and in accordance with the terms and
conditions of the Plan. "Change in Control" for purposes of the Plan shall
mean a change in control of Lancit under such circumstances as shall be
specified by (x) the Board or the Committee or (y) where applicable to any
Awards granted under the Plan by such agreements between Lancit and a
Participant as (1) may have been entered into prior to the effective date
of the Plan or (2) shall be entered into after the effective date of the
Plan with, to the extent such an agreement is applicable to an Award, the
approval of the Board or the Committee. A "Change in Control" may, without
limitation, be deemed to have occurred if (A) any "person" or "group" of
persons (as the terms "person" and "group" are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) is or becomes the beneficial owner, directly or indirectly, of
securities of Lancit representing 50.1% or more of the combined voting
power of the then outstanding securities of Lancit, or (B) a change of more
than 25% in the composition of the Board occurs within a two-year period,
unless such change in composition was approved in advance by at least
two-thirds of the previous directors.
8. Payment under Awards. Payment by the Company pursuant to Awards may be made
in the form of cash, Stock or combinations thereof and may be subject to
such restrictions as the Board or the Committee determines, including, in
the case of Stock, restrictions on transfer and forfeiture provisions.
Stock subject to transfer restrictions or forfeiture provisions is referred
to herein as "Restricted Stock". The Board or the Committee may provide for
payments to be deferred, such future payments to be made in installments or
by lump-sum payment. The Board or the Committee may permit selected
Participants to elect to defer payments of some or all types of Awards in
accordance with procedures established by the Board or the Committee to
assure that such deferrals comply with applicable requirements of the Code.
The Board or the Committee may also establish rules and procedures for the
crediting of interest on deferred cash payments and of dividend
equivalencies on deferred payments to be made in Stock or units of Stock.
At the discretion of the Board or the Committee, a Participant may be
offered an election to substitute an Award for another Award or Awards, or
for awards made under any other benefit plan of the Company, of the same or
different type.
9. Stock Option Exercise or Conversion. The price at which shares of Stock may
be purchased upon exercise of a stock option shall be paid in full at the
time of the exercise, in cash or, if permitted by the Board or the
Committee, by (a) tendering Stock or surrendering such option or another
Award, including Restricted Stock, or an option or other award granted
under another benefit plan of the Company, in each case valued at, or on
the basis of, Fair Market Value on
the date of exercise, (b) delivery of a promissory note issued by a
Participant to the Company in a form determined by the Board or the
Committee, or (c) any other means acceptable to the Board or the Committee.
The Board or the Committee shall determine acceptable methods for tendering
Stock or surrendering options or other Awards or grants and may impose such
conditions on the use of Stock or other Awards or grants to exercise a
stock option as it deems appropriate. If shares of Restricted Stock are
tendered as consideration for the exercise of a stock option, the Board or
the Committee may require that the number of shares issued upon exercise of
the stock option equal to the number of shares of Restricted Stock used as
consideration therefor be subject to the same restrictions as the
Restricted Stock so tendered and any other restrictions as may be imposed
by the Board or the Committee. The Board or the Committee may also permit
Participants to exercise stock options and simultaneously sell some or all
of the shares of Stock so acquired pursuant to a brokerage or similar
arrangement which provides for the payment of the exercise price
substantially concurrently with the delivery of such shares.
10. Tax Withholding. Unless otherwise expressly provided under the terms of any
Award Agreement, the Company shall have the right to deduct applicable
taxes from any Award payment or shares of Stock receivable under an Award
and to withhold an appropriate number of shares of Stock for payment of
taxes required by law or to take such other action as may be neces sary in
the opinion of the Company to satisfy all tax withholding obligations. In
addition, the Board or the Committee may permit Participants to elect to
(a) have the Company deduct applicable taxes resulting from any Award
payment to, or exercise of an Award by, such Participant by withholding an
appropriate number of shares of Stock for payment of tax obligations or
(b) tender to the Company for the purpose of satisfying tax payment
obligations other Stock held by the Participant. If the Company withholds
shares of Stock to satisfy tax payment obligations, the value of such Stock
in general shall be its Fair Market Value on the date of the Award payment
or the date of exercise of an Award, as the case may be. If a Participant
tenders shares of Stock pursuant to clause (b) above to satisfy tax payment
obligations, the value of such Stock shall be the Fair Market Value on the
date the Participant tenders such Stock to the Company.
11. Amendment, Modification, Suspension or Termination of the Plan. The Board
may amend, modify, suspend or terminate the Plan, or adopt subplans under
the Plan, (a) for the purpose of meeting or addressing any changes in any
applicable tax, securities or other laws, rules or regulations or (b) for
any other purpose permitted by law. Except as otherwise required by
applicable law, no amendment to this Plan or any subplan established
hereunder will require stockholder approval; provided, however, that the
Plan may not be amended in a manner that would alter, impair, amend,
modify, suspend or terminate any rights of a Participant or obligation of
the Company under any Awards theretofore granted, in any manner adverse to
any such affected Participant, without the consent of such affected
Participant.
12. Termination of Employment. Except as otherwise set forth in an applicable
Award Agreement or determined by the Board or the Committee, or as
otherwise provided in para graph (a) or (b) of this Section 12, if a
Participant's employment or association with the Company terminates, all
unexercised, deferred and unpaid Awards (or portions of Awards) shall be
canceled immediately.
(a) Retirement, Resignation or Other Termination. If a Participant's
employment or association with the Company terminates by reason of the
Participant's retirement or resignation, or for any other reason
(other than the Participant's death or disability), the Board or the
Committee may, under circumstances in which it deems an exception from
the provisions of the first sentence of this Section 12 to be
appropriate to carry out the objectives of the Plan and to be
consistent with the best interests of the Company, permit Awards to
continue in effect and be exercisable or payable beyond the date of
such termination, up until the expiration date specified in the
applicable Award Agreement and otherwise in accordance with the terms
of the applicable Award Agreement, and may accelerate the
exercisability or vesting of any Award, in either case, in whole or in
part.
(b) Death or Disability.
(i) In the event of a Participant's death, the Participant's estate
or beneficiaries shall have a period, not extending beyond the
expiration date specified in the applicable Award Agreement
(except as otherwise provided in such Award Agreement), within
which to exercise any outstanding Award held by the Participant,
as may be specified in the Award Agreement or as may otherwise be
determined by the Board or the Committee. All rights in respect
of any such outstanding Awards shall pass in the following order:
(A) to beneficiaries so designated in writing by the Participant;
or if none, then (B) to the legal repre sentative of the
Participant; or if none, then (C) to the persons entitled thereto
as determined by a court of competent jurisdiction. Awards so
passing shall be exercised or paid at such times and in such
manner as if the Participant were living, except as otherwise
provided in the applicable Award Agreement or as determined by
the Board or the Committee.
(ii) If a Participant ceases to be employed by or associated with the
Company because the Participant is deemed by the Company to be
disabled, outstanding Awards held by the Participant may be paid
to or exercised by the Participant, if legally competent, or by a
committee or other legally designated guardian or representative
if the Participant is legally incompetent, for a period, not
extending beyond the expiration date specified in the applicable
Award Agreement (except as otherwise provided in such Award
Agreement), following the termination of his employment or
association with the Company, as may be specified in the Award
Agreement or as may otherwise be determined by the Board or the
Committee.
(iii)After the death or disability of a Participant, the Board or the
Committee may at any time (A) terminate restrictions with respect
to Awards held by the Participant, (B) accelerate the vesting or
exercisability of any or all installments and rights of the
Participant in respect of Awards held by the Participant and (C)
instruct the Company to pay the total of any accelerated payments
under the Awards in a lump sum to the Participant or to the
Participant's estate, beneficiaries or representatives,
notwithstanding that, in the absence of such termination of
restrictions or acceleration of payments, any or all of the
payments due under the Awards might ultimately have become
payable to other beneficiaries.
(iv) In the event of uncertainty as to the interpretation of, or
controversies concerning, paragraph (b) of this Section 12, the
Board or the Committee's determinations shall be binding and
conclusive on all Participants and any parties validly claiming
through them.
13. Nonassignability.
(a) Except as provided for in paragraphs (a) and (b) of Section 12 hereof
and paragraph (b) of this Section 13, and except as may otherwise be
determined by the Board or the Committee (subject to paragraph (a)(ii)
of Section 5 hereof and set forth in the applicable Award Agreement,
no Award or any other benefit under the Plan, or any right with
respect thereto, shall be assignable or transferable, or payable to or
exercisable by, anyone other than the Participant to whom it is
granted.
(b) If a Participant's employment or association with the Company
terminates in order for such Participant to assume a position with a
governmental, charitable or educational agency or institution, and the
Participant retains Awards pursuant to paragraph (a) of Section 12
hereof, the Board or the Committee, in its discretion and to the
extent permitted by law, may authorize a third party (including,
without limitation, the trustee of a "blind" trust), acceptable to the
applicable authori ties, the Participant and the Board or the
Committee, to act on behalf of the Participant with respect to such
Awards.
14. Adjustments. In the event of any change in the outstanding Stock by reason
of a stock split, stock dividend, combination or reclassification of
shares, recapitalization, merger or similar event, the Board or the
Committee shall adjust proportionally (a) the number of shares of Stock (i)
reserved under the Plan, (ii) available for options or other Awards and
available for issuance pursuant to options, or upon which SARs may be
based, for individual Participants and (iii) covered by outstanding Awards
denominated in Stock or units of Stock; (b) the prices related to
outstanding Awards; and (c) the appropriate Fair Market Value and other
price determinations for such Awards. In the event of any other change
affecting the Stock or any distribution (other than normal cash dividends)
to holders of Stock, such adjustments as may be deemed equitable by the
Board or the Committee, including adjustments to avoid fractional shares,
shall be made to give proper effect to such event. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board or the Committee shall
be authorized to issue or assume stock options or other awards, whether or
not in a transaction to which Section 424(a) of the Code applies, by means
of substitution of new stock options or Awards for previously issued
options or awards or an assumption of previously issued stock options or
awards.
15. Notice. Any written notice to Lancit required by any of the provisions of
the Plan shall be addressed to the Board, c/o the Secretary of Lancit, and
shall become effective when received by the Secretary.
16. Unfunded Plan. Insofar as the Plan provides for Awards of cash or Stock,
the Plan shall be unfunded unless and until the Board or the Committee
otherwise determines. Although bookkeeping accounts may be established with
respect to Participants who are entitled to cash, Stock or rights thereto
under the Plan, any such accounts shall be used merely as a bookkeeping
convenience. Unless the Board otherwise determines, (a) the Company shall
not be required to segregate any assets that may at any time be represented
by cash, Stock or rights thereto, nor shall the Plan be construed as
providing for such segregation, nor shall the Company, the Board or the
Committee be deemed to be a trustee of any cash, Stock or rights thereto to
be granted under the Plan; (b) any liability of the Company to any
Participant with respect to a grant of cash, Stock or rights thereto under
the Plan shall be based solely upon any contractual obligations that may be
created by the Plan and an Award Agreement; (c) no such obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on
any property of the Company; and (d) neither the Company, the Board nor the
Committee shall be required to give any security or bond for the
performance of any obligation that may be created by or pursuant to the
Plan.
17. Payments to Trust. Notwithstanding the provisions of Section 16 hereof, the
Board or the Committee may cause to be established one or more trust
agreements pursuant to which the Board or the Committee may make payments
of cash, or deposit shares of Stock, due or to become due under the Plan to
Participants.
18. No Right to Employment. Neither the adoption of the Plan nor the granting
of any Award shall confer on any Participant any right to continued
employment or association with the Company or in any way interfere with the
Company's right to terminate the employment or association of any
Participant at any time, with or without cause, and without liability
therefor. Awards, payments and other benefits received by a Participant
under the Plan shall not be deemed a part of the Participant's regular,
recurring compensation for any purpose, including, without limitation, for
the purposes of any termination indemnity or severance pay law of any
jurisdiction.
19. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by and construed
under the laws of the state of incorporation of Lancit (the "Governing
Law"). No Award shall be made under the Plan which is other than in
conformity with the Governing Law and, in the event of a conflict between
any for of Award Agreement and any provision of the Governing Law, the
Award Agreement shall be deemed modified to the extent necessary to comply
with the Governing Law.
20. Effective and Termination Dates. This Plan, and any amendment hereof
requiring stockholder approval, shall become effective as of the date of
its approval by the stockhold ers of Lancit by the affirmative vote of the
number of shares required by the Governing Law at a stockholders' meeting
at which the approval of the Plan (or any such amendment) is considered.
The Plan shall terminate on December 31, 2007, subject to earlier
termination by the Board pursuant to Section 11 hereof, except as to Awards
then outstanding.