EXHIBIT 10.7
NEXAR TECHNOLOGIES, INC.
(formerly known as Dynasys Systems Corporation)
1995 STOCK OPTION PLAN
(As Amended and Restated on February 28, 1997)
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1. PURPOSE
The purpose of this Nexar Technologies, Inc. (formerly known as Dynasys
Systems Corporation) 1995 Stock Option Plan (the "Plan") is to provide an
incentive to certain key employees, directors and consultants of and to Nexar
Technologies, Inc. (the "Company") and its parent, if any, and any present or
future subsidiaries of the Company (collectively, the "Related Companies") by
providing a favorable opportunity for them to purchase stock of the Company.
This Plan provides for the grant of incentive stock options, as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to
key employees of the Company and the Related Companies, and for the grant of
non-qualified stock options to key employees, non-employee directors and
consultants to the Company and the Related Companies. All such incentive stock
options and non-qualified options which may be granted under this Plan are
hereinafter referred to as "Options."
2. ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board may appoint a Compensation Committee (the
"Committee") of two or more of its members to administer this Plan. If the
Company registers any class of equity security pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), each member of
the Committee shall be an "outside director" within the meaning of Section
162(m) of the Code and a "non-employee director" as defined in Rule 16b-3 under
the Exchange Act. Subject to the terms of the Plan, the Committee, if so
appointed, shall have the authority to (i) determine the employees, non-employee
directors and consultants (from among the class of persons eligible under
Section 4) to whom Options may be granted; (ii) determine the time or times at
which Options may be granted; (iii) determine the option price of shares subject
to each Option, which price shall not be less than the minimum specified in
Section 7; (iv) determine whether each Option granted shall be an incentive
stock option or a non-qualified option; (v) determine the time or times when
each Option shall become exercisable and the duration of the exercise period;
(vi) determine whether restrictions such as repurchase options are to be imposed
on shares subject to Options and the nature of such restrictions if any; and
(vii) interpret the Plan and prescribe and rescind rules and regulations
relating to it.
The interpretation and construction by the Committee of any provisions
of the Plan or of any Option granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under it.
The Committee may select one of its members as its chairman, and shall
hold meetings at such time and places as it may determine. Acts by a majority of
the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee. All
references in this Plan to the Committee shall mean the Board if there is no
Committee so appointed. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause), and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan.
3. SHARES COVERED BY THE PLAN
Options may be granted under the Plan while the Plan is in effect for
the purchase of not more than 5,300,000 shares of the Common Stock, $0.01 par
value per share ("Common Stock"), of the Company. Shares covered by unexercised
Options which are no longer exercisable for any reason shall be available for
issuance under Options granted hereunder for purposes of computing the foregoing
limitation unless the Plan has been terminated. Shares delivered on exercise of
Options may be made available from authorized and unissued Common Stock or from
Common Stock held in the Treasury of the Company. In connection with the grant
of any non-qualified stock option under the Plan, the Committee may in its
discretion provide for a cash payment to be made to the person exercising the
Option, at the time of exercise, in such amount as the Committee determines to
be appropriate to reimburse such person, in whole or in part, for any federal or
state income taxes incurred in connection with such exercise. Such payment may
be applied to the satisfaction of any applicable withholding tax which is
incurred in connection with such exercise or with such payment.
4. ELIGIBILITY
The persons who shall be eligible to receive Options under the Plan
shall include key employees, non-employee directors and individuals performing
services as non-employee independent contractors to the Company or any of the
Related Companies. Such persons are hereinafter referred to as "Eligible
Individuals."
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5. ALLOTMENT OF OPTIONS AND NUMBER OF SHARES
The allotment of Options among the Eligible Individuals, the number of
shares to be covered by each Option to be granted, and the designation of
Options as either incentive stock options or non-qualified stock options shall
be determined by the Committee; provided, however, that an incentive stock
option may be granted only to an Eligible Individual who is an employee of the
Company or a Related Company.
In no event may any Eligible Individual be granted options with respect
to more than 1,250,000 shares of Common Stock in any fiscal year. The number of
shares of Common Stock issuable pursuant to an option granted to a Plan
participant in a fiscal year that is subsequently forfeited, canceled or
otherwise terminated shall continue to count toward the foregoing limitation in
such fiscal year. In addition, if the exercise price of an option is
subsequently reduced, the transaction shall be deemed a cancellation of the
original option and the grant of a new one so that both transactions shall count
toward the maximum shares issuable in the fiscal year of each representative
transaction.
6. OPTION AGREEMENTS
Each Eligible Individual to whom an Option is granted (an "Optionee")
shall enter into a written agreement setting forth the terms and conditions of
the Option granted to him, which agreement may contain such terms, conditions
and restrictions not inconsistent with the terms of the Plan as the Committee
shall approve.
7. OPTION PRICE
The price to be paid by an Optionee who exercises an Option shall be
determined by the Committee but shall in no event be less than the fair market
value of the Common Stock on the date the Option is granted; provided that in
the case of an incentive stock option granted to an Eligible Individual who owns
stock representing more than 10% of the voting power of all classes of stock of
the Company, the option price shall not be less than 110% of such fair market
value.
8. DURATION AND RATE OF EXERCISE OF OPTIONS
The option period shall be fixed by the Committee but in any event each
Option shall by its terms be exercisable no later than the expiration of ten
years from the date the Option is granted; provided that in the case of an
incentive stock option granted to an Eligible Individual who owns stock
representing more than 10% of the voting power of all classes of stock of the
Company, the option shall not be exercisable to any extent after the expiration
of five years from the date the Option is granted.
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The Committee shall determine the rate at which each Option shall be
exercisable.
In the case of an incentive stock option, the amount of aggregate fair
market value of shares (determined at the time of grant of the Option pursuant
to Section 7) with respect to which incentive stock options are exercisable for
the first time by an Optionee during any calendar year (under all such plans of
his employer corporation and its parent and subsidiary corporations) shall not
exceed $100,000. To the extent the limitation in the preceding sentence would be
exceeded with respect to any portion of an Option otherwise first becoming
exercisable for any year in accordance with the vesting schedule established for
an Optionee, the Committee may determine at the time of grant that vesting with
respect to such excess amount shall be deferred until the first subsequent year
that such excess amount (or any part thereof) can become exercisable within the
limitation of the preceding sentence, or, in the alternative, that such excess
amount become vested as a non-qualified stock option.
The Committee shall determine the manner in which each Option shall be
exercisable, the timing and form of the purchase price to be paid by an Optionee
upon the exercise of an Option, and any restrictions to be imposed upon the
Common Stock received on exercise of an Option. To the extent provided in the
option agreement, payment of the purchase price may be in cash, part in cash and
part by personal promissory note or in whole or in part by the surrender of a
whole number of shares of previously issued Common Stock of the Company.
Previously issued shares of Common Stock shall be accepted as payment in an
amount equal to the then fair market value of the surrendered shares.
9. NONTRANSFERABILITY OF OPTIONS
Unless specifically otherwise by the Committee with respect to
non-qualified options only, each Option granted under the Plan to any Eligible
Individual shall by its terms not be transferable by him otherwise than by will
or the laws of descent and distribution, and shall be exercisable during his
lifetime only by him.
10. RIGHTS AS A STOCKHOLDER
An Optionee shall have no rights as a stockholder with respect to any
shares covered by his Options until he shall have become the holder of record of
such shares, and no adjustment shall be made, except adjustments pursuant to
Section 11 hereof, for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights in respect of
such shares for which the record date is prior to the date on which he shall
have become the holder of record thereof.
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11. EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN
In the event there is any change in the shares of Common Stock of the
Company through the declaration of stock dividends or through recapitalizations
resulting in stock split-ups or combinations or exchanges of shares or
otherwise, the number of shares available for Option, the exercise price of
outstanding Options, and the number of shares subject to any Option shall be
appropriately adjusted by the Committee.
If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company is liquidated or sells or otherwise disposes of substantially all of
its assets to another corporation while unexercised Options remain outstanding,
(i) subject to the provisions of clauses (iii) and (iv) below, after the
effective date of such merger, consolidation or sale, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of the merger, consolidation or sale; or (ii) the Committee may waive any
discretionary limitations imposed pursuant to Section 8 hereof so that all
Options from and after a date prior to the effective date of such merger,
consolidation, liquidation or sale, as the case may be, specified by the
Committee, shall be exercisable in full; or (iii) all outstanding Options may be
canceled by the Committee as of the effective date of any such merger,
consolidation, liquidation or sale provided that notice of such cancellation
shall be given to each holder of an Option, and each holder of an Option shall
have the right to exercise such Option in full (without regard to any
discretionary limitations imposed pursuant to Section 8 hereof) during a 30-day
period preceding the effective date of such merger, consolidation, liquidation
or sale; or (iv) all outstanding Options may be canceled by the Committee as of
the date of any such merger, consolidation, liquidation or sale provided that
notice of such cancellation shall be given to each holder of an Option, and each
holder of an Option shall have the right to exercise such Option but only to the
extent exercisable in accordance with any discretionary limitations imposed
pursuant to Section 8 prior to the effective date of such merger, consolidation,
liquidation or sale.
12. GRANT OF OPTIONS IN CONNECTION WITH CERTAIN ACQUISITIONS
The Committee may grant Options under the Plan in substitution for
incentive stock options or non-qualified stock options granted under plans of
other employers, if such grant occurs by reason of a corporate merger,
consolidation, separation, reorganization, or liquidation to which the Company
is a party, or by reason of the acquisition of property or stock of another
corporation by the Company; provided that, with respect to any incentive stock
option, such transaction is a transaction to which Section 424(a) of the Code
applies. The Committee may impose such terms and conditions upon the grant of
any incentive stock option under this Section 12 as are necessary to ensure that
the substitution will not constitute a modification of the Option under Section
424(h) of the Code, even though any such term or
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condition would otherwise be inconsistent with the provisions of this Plan.
Options granted under the provisions of this Section 12 may be granted at a
price less than the fair market value of the Common Stock on the date such
Option is granted, so long as the ratio of the option price to the fair market
value of the Common Stock is no more favorable to the Optionee than the ratio of
the option price to the fair market value of the stock subject to the old option
immediately before such substitution. Except as otherwise specifically provided
in the agreement setting forth the terms and conditions of such an Option, the
provisions of this Plan shall govern any options granted under this Section 12.
Nothing in this Section 12 shall be deemed to authorize the grant of Options
under the Plan for a number of shares in excess of the number set forth in
Section 3, nor to limit in any way the authority of the Committee to grant
substituted options in connection with such transactions other than under the
Plan.
13. USE OF PROCEEDS
The proceeds received by the Company from the sale of Common Stock
pursuant to the Plan may be used for general corporate purposes.
14. AMENDMENT AND DISCONTINUANCE
The Board may from time to time alter or suspend and at any time
discontinue the Plan. However, no action of the Board may, without the approval
of the stockholders, increase the maximum number of shares to be offered for
sale under Options in the aggregate (other than according to the terms of
Section 11), modify the provisions of Section 4 regarding eligibility, reduce
the purchase price at which shares may be offered pursuant to Options (other
than according to the terms of Section 11) or extend the expiration date of the
Plan; nor may any action of the Board or the stockholders alter or impair an
Optionee's rights under any outstanding Option previously granted under the
Plan, without the consent of the holder of the Option. Notwithstanding the
above, the Board of Directors may from time to time alter the terms of an
outstanding Option previously granted under the Plan, without the consent of the
holder of the Option, if the sole effect of such alteration is to accelerate the
time at which the Option (or any portion thereof) may be exercised.
15. EFFECTIVE DATE AND TERMINATION DATE
The Plan and any amendment thereto requiring stockholder approval shall
become effective upon the date of its adoption by the Board, subject, however to
approval by the stockholders of the Company within twelve months of such date.
The Plan shall remain in effect until terminated by the Board, but not later
than ten years after the date the Plan is initially adopted by the Board, or is
approved by the stockholders, whichever first occurs.
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The Plan was initially adopted by the Board on March 29, 1995 and
approved by the stockholders of the Company on April 1, 1995.
As Amended and Restated on February 28, 1997, the date upon which such
amendments and restatement were adopted by the Board and approved by the
Company's stockholders.
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