EXHIBIT 4.1
1998 STOCK OPTION PLAN
OF
ION NETWORKS, INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan")
is designed to provide an incentive to key employees (including directors and
officers who are key employees) and to consultants and directors who are not
employees of ION NETWORKS, INC., a Delaware corporation (the "Company"), or any
of its Subsidiaries (as such term is defined in Paragraph 19), and to offer an
additional inducement in obtaining the services of such individuals. The Plan
provides for the grant of "incentive stock options" ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and nonqualified stock options which do not qualify as ISOs ("NQSOs"). The
Company makes no representation or warranty, express or implied, as to the
qualification of any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 12, the aggregate number of shares of Common Stock, $.01 par value per
share, of the Company ("Common Stock") for which options may be granted under
the Plan shall not exceed 3,000,000. Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of Directors"),
consist either in whole or in part of authorized but unissued shares of Common
Stock or shares of Common Stock held in the treasury of the Company. Subject to
the provisions of Paragraph 13, any shares of Common Stock subject to an option
which for any reason expires, is canceled or is terminated unexercised or which
ceases for any reason to be exercisable shall again become available for the
granting of options under the Plan. The Company shall at all times during the
term of the Plan reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by the Board of Directors or a committee of the Board of Directors (the
"Committee") consisting of not less than two (2) directors, each of whom shall
be a "non-employee director" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (as the same may be in effect
and interpreted from time to time, "Rule 16b-3"). Unless otherwise provided in
the By-Laws of the Company or by resolution of the Board of Directors, a
majority of the members of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee.
Subject to the express provisions of the Plan, the Committee
shall have the authority, in its sole discretion, to determine the persons who
shall be granted options; the times
when they shall receive options; whether an option granted to an employee shall
be an ISO or a NQSO; the number of shares of Common Stock to be subject to each
option; the term of each option; the date each option shall become exercisable;
whether an option shall be exercisable in whole or in installments, and, if in
installments, the number of shares of Common Stock to be subject to each
installment; whether the installments shall be cumulative; the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment; whether shares
of Common Stock may be issued upon the exercise of an option as partly paid,
and, if so, the dates when future installments of the exercise price shall
become due and the amounts of such installments; the exercise price of each
option; the form of payment of the exercise price; the fair market value of a
share of Common Stock; whether and under what conditions to restrict the sale or
other disposition of the shares of Common Stock acquired upon the exercise of an
option and, if so, whether and under what conditions to waive any such
restriction; whether and under what conditions to subject the exercise of all or
any portion of an option to the fulfillment of certain restrictions or
contingencies as specified in the contract referred to in Paragraph 11 (the
"Contract"), including without limitation, restrictions or contingencies
relating to entering into a covenant not to compete with the Company, its Parent
(as such term is defined in Paragraph 19) and Subsidiaries, to financial
objectives for the Company, any of its Subsidiaries, a division, a product line
or other category, and/or the period of continued employment of the optionee
with the Company or any of its Subsidiaries, and to determine whether such
restrictions or contingencies have been met; the amount, if any, necessary to
satisfy the obligation of the Company, any of its Subsidiaries or a Parent to
withhold taxes or other amounts; whether an optionee is Disabled (as such term
is defined in Paragraph 19); with the consent of the optionee, to cancel or
modify an option, provided that the modified provision is permitted to be
included in an option granted under the Plan on the date of the modification,
and provided further, that in the case of a modification (within the meaning of
Section 424(h) of the Code) of an ISO, such option as modified would be
permitted to be granted on the date of such modification under the terms of the
Plan; to construe the respective Contracts and the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to approve any provision of
the Plan or any option granted under the Plan or any amendment to either which,
under Rule 16b-3, requires the approval of the Board of Directors, a committee
of non-employee directors or the shareholders to be exempt (unless otherwise
specifically provided herein); and to make all other determinations necessary or
advisable for administering the Plan. Any controversy or claim arising out of or
relating to the Plan, any option granted under the Plan or any Contract shall be
determined unilaterally by the Committee in its sole discretion. The
determinations of the Committee on the matters referred to in this Paragraph 3
shall be conclusive and binding on the parties.
No member or former member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted hereunder. In addition, each member and former member of the
Committee shall be indemnified and held harmless by the Company from and against
any liability, claim for damages and expenses in connection therewith by reason
of any action or failure to act under or in connection with the
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Plan, any option granted hereunder or any Contract to the fullest extent
permitted with respect to directors under the Company's certificate of
incorporation, By-Laws and applicable law.
4. ELIGIBILITY. The Committee may from time to time,
consistent with the purposes of the Plan, grant options to such key employees
(including officers and directors who are key employees) of, or consultants to,
the Company or any of its Subsidiaries, and to such directors of the Company
who, at the time of grant, are not common law employees of the Company or of any
of its Subsidiaries, as the Committee may determine in its sole discretion. Such
options granted shall cover such number of shares of Common Stock as the
Committee may determine in its sole discretion; provided, however, that the
maximum number of shares subject to options that may be granted to any employee
during any calendar year under the Plan shall be 400,000 shares; and provided
further that the aggregate market value (determined at the time the option is
granted) of the shares of Common Stock for which any eligible employee may be
granted ISOs under the Plan or any other plan of the Company, or of a Parent or
a Subsidiary of the Company, which are exercisable for the first time by such
optionee during any calendar year shall not exceed $100,000. The $100,000 ISO
limitation shall be applied by taking ISOs into account in the order in which
they were granted. Any option (or the portion thereof) granted in excess of such
ISO limitation amount shall be treated as a NQSO to the extent of such excess.
5. EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be determined by the Committee in its sole
discretion; provided, however, that the exercise price of an ISO shall not be
less than the fair market value of the Common Stock subject to such option on
the date of grant; and provided further that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the exercise
price of such ISO shall not be less than 110% of the fair market value of the
Common Stock subject to such ISO on the date of grant.
The fair market value of a share of Common Stock on any day
shall be (a) if the principal market for the Common Stock is a national
securities exchange, the average of the highest and lowest sales prices per
share of the Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange, (b) if the principal
market for the Common Stock is not a national securities exchange and the Common
Stock is quoted on the Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales
price information is available with respect to the Common Stock, the average of
the highest and lowest sales prices per share of the Common Stock on such day on
Nasdaq, or (ii) if such information is not available, the average of the highest
bid and the lowest asked prices per share for the Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average of
the highest bid and lowest asked prices per share for the Common Stock on such
day as reported on the OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided that if clauses (a), (b)
and (c) of this Paragraph are all inapplicable, or if no
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trades have been made or no quotes are available for such day, the fair market
value of a share of Common Stock shall be determined by the Committee by any
method consistent with applicable regulations adopted by the Treasury Department
relating to stock options.
6. TERM. Each option granted pursuant to the Plan shall be for
such term as is established by the Committee, in its sole discretion, at or
before the time such option is granted; provided, however, that the term of each
ISO granted pursuant to the Plan shall be for a period not exceeding 10 years
from the date of grant thereof, and provided further that if, at the time an ISO
is granted, the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, of any of its Subsidiaries or of a Parent, the
term of the ISO shall be for a period not exceeding five years from the date of
grant. Options shall be subject to earlier termination as hereinafter provided.
7. EXERCISE. An option (or any installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office stating which option is being exercised,
specifying the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the applicable Contract permits
installment payments) (a) in cash and/or by certified check or (b) with the
authorization of the Committee, with cash, a certified check and/or with
previously acquired shares of Common Stock, having an aggregate fair market
value (determined in accordance with Paragraph 5), on the date of exercise,
equal to the aggregate exercise price of all options being exercised; provided,
however, that in no case may shares be tendered if such tender would require the
Company to incur a charge against its earnings for financial accounting
purposes.
The Committee may, in its sole discretion, permit payment of
the exercise price of an option by delivery by the optionee of a properly
executed notice, together with a copy of his irrevocable instructions to a
broker acceptable to the Committee to deliver promptly to the Company the amount
of sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
An optionee shall not have the rights of a shareholder with
respect to such shares of Common Stock to be received upon the exercise of an
option until the date of issuance of a stock certificate to him for such shares
or, in the case of uncertificated shares, until the date an entry is made on the
books of the Company's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry is
made, any optionee using previously acquired shares of Common Stock in payment
of an option exercise price shall continue to have the rights of a shareholder
with respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be
purchased or issued under the Plan.
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8. TERMINATION OF RELATIONSHIP. Except as may otherwise be
expressly provided in the applicable Contract, any optionee whose employment or
consulting relationship with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than the death or Disability of the optionee may
exercise any option granted to him as an employee or consultant, to the extent
exercisable on the date of such termination, at any time within three months
after the date of termination, but not thereafter and in no event after the date
the option would otherwise have expired; provided, however, that if such
relationship is terminated either (a) for cause, or (b) without the consent of
the Company, such option shall terminate immediately. Except as may otherwise be
expressly provided in the applicable Contract, options granted under the Plan to
an employee or consultant of the Company or any of its Subsidiaries shall not be
affected by any change in the status of the holder so long as he continues to be
an employee or a consultant of the Company, its Parent or any of the
Subsidiaries (regardless of a change in status from one to the other or having
been transferred from one corporation to another).
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an employee of such corporation for
purposes of Section 422(a) of the Code. As a result, an individual on military,
sick leave or other bona fide leave of absence shall continue to be considered
an employee for purposes of the Plan during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's right
to reemployment with the corporation, any of its Subsidiaries or a Parent is
guaranteed either by statute or by contract. If the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed by statute or
by contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave.
Except as may otherwise be expressly provided in the
applicable Contract, an optionee whose directorship with the Company has
terminated for any reason other than his death or Disability may exercise the
options granted to him as a director who was not an employee of or consultant to
the Company or any of its Subsidiaries, to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his directorship is terminated for
cause, such option shall terminate immediately.
Nothing in the Plan or in any option granted under the Plan
shall confer on any person any right to continue in the employ or as a
consultant of the Company, its Parent or any of its Subsidiaries, or as a
director of the Company, or interfere in any way with any right of the Company,
its Parent or any of its Subsidiaries to terminate such relationship at any time
for any reason whatsoever without liability to the Company, its Parent or any of
its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise
be expressly provided in the applicable Contract, if an optionee dies (a) while
he is employed by, or a consultant to, the Company, its Parent or any of its
Subsidiaries, (b) within three months after
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the termination of his employment or consulting relationship with the Company,
its Parent and its Subsidiaries (unless such termination was for cause or
without the consent of the Company) or (c) within one year following the
termination of such employment or consulting relationship by reason of his
Disability, the options granted to him as an employee of, or consultant to, the
Company or any of its Subsidiaries, may be exercised, to the extent exercisable
on the date of his death, by his Legal Representative (as such term is defined
in Paragraph 19), at any time within one year after death, but not thereafter
and in no event after the date the option would otherwise have expired. Except
as may otherwise be expressly provided in the applicable Contract, any optionee
whose employment or consulting relationship with the Company, its Parent and its
Subsidiaries has terminated by reason of his Disability may exercise such
options, to the extent exercisable upon the effective date of such termination,
at any time within one year after such date, but not thereafter and in no event
after the date the option would otherwise have expired.
Except as may otherwise be expressly provided in the
applicable Contract, if an optionee dies (a) while he is a director of the
Company, (b) within three months after the termination of his directorship with
the Company (unless such termination was for cause) or (c) within one year after
the termination of his directorship by reason of his Disability, the options
granted to him as a director who was not an employee of or consultant to the
Company or any of its Subsidiaries, may be exercised, to the extent exercisable
on the date of his death, by his Legal Representative at any time within one
year after death, but not thereafter and in no event after the date the option
would otherwise have expired. Except as may otherwise be expressly provided in
the applicable Contract, an optionee whose directorship with the Company has
terminated by reason of Disability, may exercise such options, to the extent
exercisable on the effective date of such termination, at any time within one
year after such date, but not thereafter and in no event after the date the
option would otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the
exercise of any option that either (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Common Stock to be issued upon such exercise shall be effective and
current at the time of exercise, or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. Nothing herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act or to keep any
Registration Statement effective or current.
The Committee may require, in its sole discretion, as a
condition to the grant or exercise of an option, that the optionee execute and
deliver to the Company his representations and warranties, in form, substance
and scope satisfactory to the Committee, which the Committee determines is
necessary or convenient to facilitate the perfection of an exemption from the
registration requirements of the Securities Act, applicable state securities
laws or other legal requirement, including without limitation, that (a) the
shares of Common Stock to be issued upon exercise of the option are being
acquired by the optionee for his own account, for investment only and not with a
view to the resale or distribution thereof, and (b) any subsequent resale or
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distribution of shares of Common Stock by such optionee will be made only
pursuant to (i) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the optionee, prior to any offer of sale or
sale of such shares of Common Stock, shall provide the Company with a favorable
written opinion of counsel satisfactory to the Company, in form, substance and
scope satisfactory to the Company, as to the applicability of such exemption to
the proposed sale or distribution.
In addition, if at any time the Committee shall determine that
the listing or qualification of the shares of Common Stock subject to such
option on any securities exchange, Nasdaq or under any applicable law, or that
the consent or approval of any governmental agency or regulatory body, is
necessary or desirable as a condition to, or in connection with, the granting of
an option or the issuance of shares of Common Stock thereunder, such option may
not be granted or exercised in whole or in part, as the case may be, unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by
an appropriate Contract which shall be duly executed by the Company and the
optionee. Such Contract shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Committee in its sole
discretion. The terms of each option and Contract need not be identical.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
Notwithstanding any other provision of the Plan, in the event of any change in
the outstanding Common Stock by reason of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spinoff, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Plan, the
aggregate number and kind of shares subject to each outstanding option and the
exercise price thereof, and the maximum number of shares subject to options that
may be granted to any employee in any calendar year, shall be appropriately
adjusted by the Board of Directors, whose determination shall be conclusive and
binding on all parties thereto. Such adjustment may provide for the elimination
of fractional shares that might otherwise be subject to options without payment
therefor.
In the event of (a) the liquidation or dissolution of the
Company, (b) a merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions) in
which (i) more than 50% of the outstanding Common Stock is transferred or
exchanged for other consideration or (ii) shares of Common Stock in excess of
the number of shares of Common Stock outstanding immediately preceding the
transaction are issued (other than to shareholders of the Company with respect
to their shares of stock in the Company),
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any outstanding options shall terminate upon the earliest of any such event,
unless other provision is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors on June 12, 1998. No option may be granted
under the Plan after June 11, 2008. The Board of Directors, without further
approval of the Company's shareholders, may at any time suspend or terminate the
Plan, in whole or in part, or amend it from time to time in such respects as it
may deem advisable, including without limitation, in order that ISOs granted
hereunder meet the requirements for "incentive stock options" under the Code, to
comply with the provisions of Rule 16b-3 promulgated the Exchange Act or Section
162(m) of the Code or any change in applicable law or regulation, ruling or
interpretation of any governmental agency or regulatory body; provided, however,
that no amendment shall be effective without the requisite prior or subsequent
shareholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan or change the maximum number of shares for which options
may be granted to employees in any calendar year, (b) change the eligibility
requirements for individuals entitled to receive options hereunder or (c) make
any change for which applicable law or any governmental agency or regulatory
body requires shareholder approval. No termination, suspension or amendment of
the Plan shall adversely affect the rights of an optionee under any option
granted under the Plan without such optionee's consent. The power of the
Committee to construe and administer any option granted under the Plan prior to
the termination or suspension of the Plan shall continue after such termination
or during such suspension.
14. NON TRANSFERABILITY OF OPTIONS. No option granted under
the Plan shall be transferable other than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the optionee,
only by the optionee or his Legal Representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process, and any such attempted
assignment, transfer, pledge, hypothecation or disposition shall be null and
void ab initio and of no force or effect.
15. WITHHOLDING TAXES. The Company, or its Subsidiary or
Parent, as applicable, may withhold (a) cash or (b) with the consent of the
Committee, shares of Common Stock to be issued upon exercise of an option or a
combination of cash and shares, having an aggregate fair market value
(determined in accordance with Paragraph 5) equal to the amount which the
Committee determines is necessary to satisfy the obligation of the Company, a
Subsidiary or Parent to withhold Federal, state and local income taxes or other
amounts incurred by reason of the grant, vesting, exercise or disposition of an
option or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the optionee to pay to the Company such
amount, in cash, promptly upon demand. The Company shall not be required to
issue any shares of Common Stock pursuant to any such option until all required
payments have been made.
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16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its sole discretion, to be necessary or appropriate to (a) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, applicable state securities laws or other legal
requirements, (b) implement the provisions of the Plan or any agreement between
the Company and the optionee with respect to such shares of Common Stock, or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to the
issuance of shares of Common Stock upon the exercise of an option granted under
the Plan, as well as all fees and expenses incurred by the Company in connection
with such issuance.
17. USE OF PROCEEDS. The cash proceeds to be received upon the
exercise of an option under the Plan shall be added to the general funds of the
Company and used for such corporate purposes as the Board of Directors may
determine, in its sole discretion.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the contrary notwithstanding,
the Board of Directors may, without further approval by the shareholders,
substitute new options for prior options of a Constituent Corporation (as such
term is defined in Paragraph 19) or assume the prior options of such Constituent
Corporation.
19. DEFINITIONS.
(a) "Constituent Corporation" shall mean any
corporation which engages with the Company, its Parent or any Subsidiary in a
transaction to which Section 424(a) of the Code applies (or would apply if the
option assumed or substituted were an ISO), or any Parent or any Subsidiary of
such corporation.
(b) "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(c) "Legal Representative" shall mean the
executor, administrator or other person who at the time is entitled by law to
exercise the rights of a deceased or incapacitated optionee with respect to an
option granted under the Plan.
(d) "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
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(e) "Subsidiary" shall have the same definition
as "subsidiary corporation" in Section 424(f) of the Code.
20. GOVERNING LAW. The Plan, such options as may be granted
hereunder, the Contracts and all related matters shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict or choice of law provisions.
Neither the Plan nor any Contract shall be construed or
interpreted with any presumption against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.
21. PARTIAL INVALIDITY. The invalidity, illegality or
unenforceability of any provision in the Plan, any option or Contract shall not
affect the validity, legality or enforceability of any other provision, all of
which shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
22. SHAREHOLDER APPROVAL. The Plan shall be subject to
approval by a majority of the votes of all outstanding shares entitled to vote
hereon at the next duly held meeting of the Company's shareholders at which a
quorum is present or by majority written consent of the Company's shareholders.
No options granted hereunder may be exercised prior to such approval, provided
that, the date of grant of any option shall be determined as if the Plan had not
been subject to such approval. Notwithstanding the foregoing, if the Plan is not
approved by a vote of the shareholders of the Company on or before October 1,
1998, the Plan and any options granted hereunder shall terminate.
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