INTELLIGENT DECISION SYSTEMS, INC.
1998 EMPLOYEE STOCK COMPENSATION PLAN
1. Purpose of the Plan.
This 1998 Employee Stock Compensation Plan ("Plan") is intended to
further the growth and advance the best interests of INTELLIGENT DECISION
SYSTEMS, INC., a Delaware corporation (the "Company"), and Affiliated
Corporations by supporting and increasing the Company's ability to attract,
retain and compensate persons of experience and ability and whose services are
considered valuable, to encourage the sense of proprietorship in such persons,
and to stimulate the active interest of such persons in the development and
success of the Company and Affiliate Corporations. This Plan provides for stock
compensation through the award of the Company's Common Stock.
2. Definitions.
Whenever used in this Plan, except where the context might clearly
indicate otherwise, the following terms shall have the meanings set forth in
this section:
a. "Act" means the U.S. Securities Act Of 1933, as amended.
b. "Affiliated Corporation" means any, Parent or Subsidiary of
the Company.
c. "Award" or "grant" means any grant or sale of Common Stock
made under this Plan.
d. "Board of Directors" means the Board of Directors of the
Company. The term "Committee" is defined in Section 4 of this
Plan.
e. "Code" means the Internal Revenue Code of 1986, as amended.
f. "Common Stock" or "Common Shares" means the common stock,
$.00l par value per share, of the Company, or in the event
that the outstanding Common Shares are hereafter changed into
or exchanged for different shares or securities of the
Company, such other shares or securities.
g. "Date of Grant" means the day the Committee authorizes the
grant of Common Stock or such later date as may be specified
by the Committee as the date a particular award will become
effective.
h. "Employee" means and includes the following persons: (i)
executive officers, officers and directors (including advisory
and other special directors) of the Company or an Affiliated
Corporation; (ii) full-time and part-time employees of the
Company or an Affiliated Corporation; (iii) natural persons
engaged by the Company or an Affiliated Corporation as a
consultant, advisor or agent; and (iv) a lawyer, law firm,
accountant or accounting firm, or other professional or
professional firm engaged by the Company or an Affiliated
Corporation.
i. "Parent" means any corporation owning 50% or more of the total
combined voting stock of all classes of the Company or of
another corporation qualifying as a Parent within this
definition.
j. "Participant" means an Employer to whom an Award of Plan
Shares has been made.
k. "Plan Shares" means shares of Common Stock from time to time
subject to this Plan.
l. "Subsidiary" means a corporation more than 50% of whose total
combined capital stock of all classes is held by the Company
or by another corporation qualifying as a Subsidiary within
this definition.
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3. Effective Date of the Plan.
The effective date of this Plan is January 29, l998. No Plan Shares
may be issued after December 31, 2002.
4. Administration of the Plan.
The Compensation Committee of the Board of Directors and in default of
the appointment or continued existence of such Committee, the Board of
Directors ("Committee") will be responsible for the administration of this
Plan, and will have sole power to award Common Shares under this Plan. Subject
to the express provisions of this Plan, the Committee shall have full authority
and sole and absolute discretion to interpret this Plan, to prescribe, amend
and rescind rules and regulations relating to it, and to make all other
determinations which it believes to be necessary or advisable in administering
this Plan. The determination of those eligible to receive an award of Plan
Shares shall rest in the sole discretion of the Committee, subject to the
provisions of this Plan. Awards of Plan Shares may be made as compensation for
services rendered, directly or in lien of other compensation payable, as a
bonus in recognition of past service or performance or may be sold to an
Employee as herein provided. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in this Plan in such manner and to such
extent it shall deem necessary to carry it into effect. Any decision made, or
action taken, by the Committee arising out of or in connection with the
interpretation and administration of this Plan shall be final and conclusive.
5. Stock Subject to the Plan.
The maximum number of Plan Shares which may be awarded under this Plan
is 6,000,000 shares.
6. Persons Eligible to Receive Awards.
Awards may be granted only to Employees (as herein defined).
7. Grants or Awards of Plan Shares.
Except as otherwise provided herein, the Committee shall have complete
discretion to determine when and to which Employees Plan Shares are to be
granted, and the number of Plan Shares to be awarded to each Employee. A grant
to an Employee may be made for cash, property, services rendered or other form
of payment constituting lawful consideration under applicable law; Plan Shares
awarded other than for services rendered shall be sold at not less than the
fair value thereof on the date of grant. No grant will be made if, in the
judgment of the Committee, such a grant would constitute a public distribution
with the meaning of the Act or the rules and regulations promulgated
thereunder.
8. Delivery of Stock Certificates.
As promptly as practicable after authorizing an award of Plan Shares,
the Company shall deliver to the person who is the recipient of the award, a
certificate or certificates registered in that person's name, representing the
number of Plan Shares that were granted. Unless the Plan Shares have been
registered under the Act, each certificate evidencing Plan Shares shall bear a
legend to indicate that such shares represented by the certificate were issued
in a transaction which was not registered under the Act, and may only be sold
or transferred in a transaction that is registered under the Act or is exempt
from the registration requirements of the Act. In the absence of registration
under the Act, any person awarded Plan Shares may be required to execute and
deliver to the Company an investment letter, satisfactory in form and substance
to the Company, prior to issuance and delivery of the shares. An award may be
made under this Plan wherein the Plan Shares may be issued only after
registration under the Act.
9. Assignability.
An award of Plan Shares may not be assigned. Plan Shares themselves may
be assigned only after such shares have been awarded, issued and delivered, and
only in accordance with law and any transfer restrictions imposed at the time
of award.
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10. Employment not Conferred.
Nothing in this Plan or in the award of Plan Shares shall confer upon any
Employee the right to continue in the employ of the Company or Affiliated
Corporation nor shall it interfere with or restrict in any way the lawful
rights of the Company or any Affiliated Corporation to discharge any Employee
at any time for any reason whatsoever, with or without cause.
11. Laws and Regulations.
The obligation of the Company to issue and deliver Plan Shares
following an award under this Plan shall be subject to the condition that the
Company be satisfied that the sale and delivery thereof will not violate the
Act or any other applicable laws, rules or regulations.
12. Withholding of Taxes.
If subject to withholding tax, the Company or any Affiliated
Corporation may require that the Employee concurrently pay to the Company the
entire amount or a portion of any taxes which the Company or Affiliated
Corporation is required to withhold by reason of granting Plan Shares, in such
amount as the Company or Affiliated Corporation in its discretion may
determine. In lieu of part or all of any such payment, the Employee may elect
to have the Company or Affiliated Corporation withhold from the Plan Shares
issued hereunder a sufficient number of shares to satisfy withholding
obligations. If the Company or Affiliated Corporation becomes required to pay
withholding taxes to any federal, state or other taxing authority as a result
of the granting of Plan Shares, and the Employee fails to provide the Company
or Affiliated Corporation with the funds with which to pay that withholding
tax, the Company or Affiliated Corporation may withhold up to 50% of each
payment of salary or bonus to the Employee (which will be in addition to any
required or permitted withholding), until the Company or Affiliated Corporation
has been reimbursed for the entire withholding tax it was required to pay in
respect of the award of Plan Shares.
13. Reservation of Shares.
The stock subject to this Plan shall, at all times, consist of
authorized but unissued Common Shares, or previously issued shares of Common
Stock reacquired or held by the Company or an Affiliated Corporation equal to
the maximum number of shares the Company may be required to issue as stated in
Section 5 of this Plan, and such number of Common Shares hereby is reserved for
such purpose.
14. Amendment and Termination of the Plan.
The Committee may suspend or terminate this Plan at any time or from
time to time, but no such action shall adversely affect the rights of a person
granted an Award under this Plan prior to that date. Otherwise, this Plan shall
terminate on the earlier of the terminal date stated in Section 3 of this Plan
or the date when all Plan Shares have been issued. The Committee shall have
absolute discretion to amend this Plan, subject only to those limitations
expressly set forth herein; however, the Committee shall have no authority to
extend the term of this Plan or to increase the number of Plan Shares subject
to award under this Plan. The Committee may decrease the number of shares
subject to this Plan.
15. Delivery of Plan.
A copy or description (for which a prospectus registering the Plan
Shares will serve) of this Plan shall be delivered to every person to whom an
award of Plan Shares is made. The Secretary of the Company may, but is not
required to, also deliver a copy of the resolution or resolutions of the
Committee authorizing the award.
16. Liability.
No member of the Board of Directors, the Committee or any other
committee of directors, or officers, employees or agents of the Company or any
Affiliated Corporation shall be personally liable for any action, omission or
determination made in good faith in connection with this Plan.
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17. Miscellaneous Provisions.
The place of administration of this Plan shall be in the State of
Connecticut (or subsequently, wherever the Company's principal executive
offices are located), and the validity, construction, interpretation and effect
of this Plan and of its rules, regulations and rights relating to it, shall be
determined solely in accordance with the laws of the State of Delaware or
subsequent state of domicile, should the Company be redomiciled. Without
amending this Plan the Committee may issue Plan Shares to employees of the
Company who are foreign nationals or employed outside the United States, or
both, on such terms and conditions different from those specified in this Plan
but consistent with the purpose of this Plan, as it deems necessary and
desirable, to create equitable opportunities, given differences in tax laws in
other countries. All expenses of administering this Plan and issuing Plan
Shares shall be borne by the Company.
18. Reorganizations and Recapitalizations of the Company.
(a) The shares of Common Stock subject to this Plan are shares of the
Common Stock of the Company as currently constituted. If, and whenever, the
Company shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a Common Stock dividend, a stock split,
combination of, shares (reverse stock split) or recapitalization or other
increase or reduction of the number of shares of the Common Stock outstanding
without receiving compensation therefor in money, services or property, then
the number of shares of Common Stock subject to this Plan shall (i) in the
event of an increase in the number of outstanding shares, be proportionately
increased and (ii) in the event of a reduction in the number of outstanding
shares, be proportionately reduced.
(b) Except as expressly provided above the Company's issuance of shares
of Common Stock of any class, or securities convertible into shares of Common
Stock of any class, for cash or property or for labor or services, either upon
direct sale or upon the exercise of rights or warrants to subscribe therefore
or upon conversion of shares or obligations of the Company convertible into or
exchangeable for shares of Common Stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
of shares of Common Stock subject to this Plan.
By signature below, the undersigned officers of the Company hereby
certify that the foregoing is a true and correct copy of the 1998 Employee
Stock Compensation Plan of the Company.
DATED: January 28, 1998 INTELLIGENT DECISION SYSTEMS, INC.
/s/ David Horowitz
(SEAL) By....................................
Authorized Officer
Robert B. Hyte
By..............................
Secretary
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