Exhibit 10.48
AXS-ONE INC.
1998 STOCK OPTION PLAN
(as amended by the Board of Directors on March 2, 2001)
TABLE OF CONTENTS
Page
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ARTICLE I. PURPOSE..........................................................1
ARTICLE II. DEFINITIONS......................................................1
ARTICLE III. ADMINISTRATION...................................................5
ARTICLE IV. SHARE AND OTHER LIMITATIONS......................................9
ARTICLE V. ELIGIBILITY.....................................................11
ARTICLE VI. STOCK OPTIONS...................................................12
ARTICLE VII. STOCK APPRECIATION RIGHTS.......................................14
ARTICLE VIII. NON-EMPLOYEE DIRECTOR STOCK OPTIONS.............................16
ARTICLE IX. NON-TRANSFERABILITY AND TERMINATION
OFEMPLOYMENT/CONSULTANCY PROVISIONS.............................19
ARTICLE X. CHANGE IN CONTROL PROVISIONS....................................21
ARTICLE XI. TERMINATION OR AMENDMENT OF PLAN................................23
ARTICLE XII. UNFUNDED PLAN...................................................24
ARTICLE XIII. GENERAL PROVISIONS..............................................24
ARTICLE XIV. EFFECTIVE DATE OF PLAN..........................................27
ARTICLE XV. TERM OF PLAN....................................................27
ARTICLE XVI. NAME OF PLAN....................................................27
AXS-ONE INC.
1998 STOCK OPTION PLAN
(AS AMENDED BY THE BOARD OF DIRECTORS ON MARCH 2, 2001)
ARTICLE I.
PURPOSE
The purpose of the AXS-One Inc. 1998 Stock Option Plan (the "Plan") is
to enhance the profitability and value of AXS-One Inc. (the "Company") and its
Affiliates for the benefit of the Company's stockholders by enabling the
Company: (i) to offer employees and Consultants of the Company and its
Affiliates, stock based incentives and other equity interests in the Company,
thereby creating a means to raise the level of stock ownership by employees and
Consultants in order to attract, retain and reward such individuals and
strengthen the mutuality of interests between such individuals and the Company's
stockholders, and (ii) to make equity based awards to Non-Employee Directors of
the Company thereby attracting, retaining and rewarding such Non-Employee
Directors and strengthening the mutuality of interests between such individuals
and the Company's stockholders.
ARTICLE II.
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1. "Acquisition Events" shall have the meaning set forth in
Section 4.2(d).
2.2. "Affiliate" shall mean other than the Company, (i) any
Subsidiary; (ii) any corporation in an unbroken chain of corporations
beginning or ending with the Company which owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain; (iii) any corporation, trade
or business (including, without limitation, a partnership or limited
liability company) which is controlled 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or
voting interest) by the Company or one of its Affiliates; or (iv) any
other entity, approved by the Committee as an Affiliate under the Plan,
in which the Company or any of its Affiliates has a material equity
interest.
2.3. "Award" shall mean any award under this Plan of any Stock
Option or Stock Appreciation Right. All Awards shall be confirmed by,
and subject to the terms of, a written agreement executed by the
Company and the Participant.
2.4. "Board" shall mean the Board of Directors of the Company.
2.5. "Cause" shall mean, with respect to a Participant's
Termination of Employment or Termination of Consultancy: (i) in the
case where there is no employment agreement, consulting agreement,
change in control agreement or similar agreement in effect between the
Company or an Affiliate and the Participant at the time of the relevant
grant or Award, or where there is an employment agreement, consulting
agreement, change in control agreement or similar agreement in effect
at the time of the relevant grant or Award but such agreement does not
define "cause" (or words of like import), termination due to a
Participant's dishonesty, fraud, insubordination, willful misconduct,
refusal to perform services (for any reason other than illness or
incapacity) or materially unsatisfactory performance of his or her
duties for the Company or an Affiliate; or (ii) in the case where there
is an employment agreement, consulting agreement, change in control
agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the relevant grant or
Award that defines "cause" (or words of like import); provided, that
with regard to any agreement that conditions "cause" on occurrence of a
change in control, such definition of "cause" shall not apply until a
change in control actually takes place and then only with regard to a
termination thereafter. A Participant shall be deemed to be terminated
for "cause" if the
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Participant, following his or her Termination of Employment or
Termination of Consultancy, engages in any "competitive activity" with
the Company or its Affiliates, as determined by the Committee, in its
sole discretion. With respect to a Participant's Termination of
Directorship, "cause" shall mean an act or failure to act that
constitutes "cause" for removal of a director under applicable Delaware
law.
2.6. "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference to any section of the Code shall also be a
reference to any successor provision.
2.7. "Committee" shall mean a committee or subcommittee of the
Board appointed from time to time by the Board, which committee or
subcommittee shall consist of two or more non-employee directors, each
of whom is intended to be, to the extent required by Rule 16b-3 and
Section 162(m) of the Code, a "non-employee director "as defined in
Rule 16b-3 and an "outside director"as defined under Section 162(m) of
the Code. Notwithstanding anything herein to the contrary, the Board
shall act as the Committee under this Plan with respect to any grants
of Non-Qualified Stock Options to Non-Employee Directors (whether
discretionary or automatic). To the extent that no Committee exists
which has the authority to administer this Plan, the functions of the
Committee shall be exercised by the Board. If for any reason the
appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with the requirements of
Rule 16b-3 and Section 162(m) of the Code shall not affect the validity
of Awards, grants, interpretations or other actions of the Committee.
2.8. "Common Stock" shall mean the common stock, $.01 par
value per share, of the Company.
2.9. "Company" shall mean AXS-One Inc., a Delaware
corporation.
2.10. "Consultant" shall mean any adviser or consultant to the
Company or its Affiliates who is eligible pursuant to Section 5.1 to be
granted Stock Options and Stock Appreciation Rights under this Plan.
2.11. "Disability" shall mean total and permanent disability,
as defined in Section 22(e)(3) of the Code.
2.12. "Effective Date" shall mean the effective date of this
Plan as defined in Article XIV.
2.13. "Eligible Employee" shall mean any employee of the
Company or its Affiliates who is eligible pursuant to Section 5.1 to be
granted Stock Options and Stock Appreciation Rights under this Plan.
Notwithstanding the foregoing, with respect to the grant of Incentive
Stock Options, Eligible Employee shall mean any employee of the Company
or any Affiliate described in Section 2.2(i) or (ii) who is eligible
pursuant to Section 5.2 to be granted Incentive Stock Options under
this Plan.
2.14. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
2.15. "Fair Market Value" for purposes of this Plan, unless
otherwise required by any applicable provision of the Code or any
regulations issued thereunder, shall mean, as of any date, the last
sales price reported for the Common Stock on the applicable date: (i)
as reported on the principal national securities exchange on which it
is then traded or the Nasdaq Stock Market, Inc. or (ii) if not traded
on any such national securities exchange or the Nasdaq Stock Market,
Inc., as quoted on an automated quotation system sponsored by the
National Association of Securities Dealers. If the Common Stock is not
readily tradable on a national securities exchange, the Nasdaq Stock
Market, Inc., or any automated quotation system sponsored by the
National Association of Securities Dealers, its Fair Market Value shall
be set in good faith by the Committee. For purposes of the exercise of
any Stock Appreciation Right the applicable date shall be the date a
notice of exercise is received by the Committee or, if not a day on
which the applicable market is open, the next day that it is open.
2.16. "Incentive Stock Option" shall mean any Stock Option
awarded under this Plan intended to be and designated as an "incentive
stock option" within the meaning of Section 422 of the Code.
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2.17. "Limited Stock Appreciation Right" shall mean an Award
made pursuant to Section 7.5 of this Plan which may be a Tandem Stock
Appreciation Right or a Non-Tandem Stock Appreciation Right.
2.18. "Non-Employee Director" shall mean any director of the
Company who is not an employee of the Company or any Affiliate and who
is eligible pursuant to Section 5.3 to be granted Stock Options under
Article VIII.
2.19. "Non-Qualified Stock Option" shall mean any Stock Option
awarded under this Plan that is not an Incentive Stock Option.
2.20. "Non-Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right entitling the holder to receive an amount in cash or
stock equal to the excess of: (i) the Fair Market Value of a share of
Common Stock as of the date such right is exercised, over (ii) the
aggregate exercise price of such right, otherwise than on surrender of
a Stock Option.
2.21. "Participant" shall mean any Eligible Employee,
Consultant or Non-Employee Director to whom an Award has been made
under this Plan.
2.22. "Reference Stock Option" shall have the meaning set
forth in Section 7.1.
2.23. "Retirement" with respect to a Participant's Termination
of Employment or Termination of Consultancy shall mean a Termination of
Employment or Termination of Consultancy without Cause from the Company
and an Affiliate by a Participant who has attained: (i) at least age
65; or (ii) such earlier date after age 55 as approved by the
Committee, in its sole discretion, with regard to such Participant.
With respect to a Participant's Termination of Directorship, Retirement
shall mean the failure to stand for reelection or the failure to be
reelected after a Participant has attained age 65.
2.24. "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b)
of the Exchange Act as then in effect or any successor provisions.
2.25. "Section 162(m) of the Code" shall mean the exception
for performance-based compensation under Section 162(m) of the Code and
any Treasury regulations thereunder.
2.26. "Stock Appreciation Right" or "SAR" shall mean the right
pursuant to an Award granted under Article VII.
2.27. "Stock Option" or "Option" shall mean any Option to
purchase shares of Common Stock granted to Eligible Employees or
Consultants pursuant to Article VI or granted to Non-Employee Directors
pursuant to Article VI or VIII.
2.28. "Subsidiary" shall mean any subsidiary corporation of
the Company within the meaning of Section 424(f) of the Code.
2.29. "Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right entitling the holder to surrender to the Company all
(or a portion) of a Stock Option in exchange for an amount in cash or
stock equal to the excess of: (i) the Fair Market Value, on the date
such Stock Option (or such portion thereof) is surrendered, of the
Common Stock covered by such Stock Option (or such portion thereof),
over (ii) the aggregate exercise price of such Stock Option (or such
portion thereof).
2.30. "Ten Percent Stockholder" shall mean a person owning
stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or its Subsidiaries or its parent
corporations, as defined in Section 424(e) of the Code.
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2.31. "Termination of Consultancy" shall mean, with respect to
a Consultant, that the Consultant is no longer acting as a Consultant
to the Company and its Affiliates. In the event an entity shall cease
to be an Affiliate, there shall be deemed a Termination of Consultancy
of any individual who is not otherwise a Consultant of the Company or
another Affiliate at the time the entity ceases to be an Affiliate.
2.32. "Termination of Directorship" shall mean, with respect
to a Non-Employee Director, that the Non-Employee Director has ceased
to be a director of the Company.
2.33. "Termination of Employment" shall mean: (i) a
termination of service of a Participant from the Company and its
Affiliates; or (ii) when an entity which is employing a Participant
ceases to be an Affiliate, unless the Participant thereupon becomes
employed by the Company or another Affiliate.
2.34. "Transfer" or "Transferred" shall mean anticipate,
alienate, attach, sell, assign, pledge, encumber, charge or otherwise
transfer.
ARTICLE III.
ADMINISTRATION
3.1. THE COMMITTEE. This Plan shall be administered and interpreted by
the Committee. Notwithstanding anything herein to the contrary, the Board shall
act as the Committee under this Plan into respect to any discretionary grants of
Non-Qualified Stock Options to Non-Employee Directors.
3.2. AWARDS. The Committee or the Board, as applicable, shall have full
authority to grant, pursuant to the terms of this Plan (including Article V
hereof) Stock Options to Participants and Stock Appreciation Rights to Eligible
Employees and Consultants and to otherwise administer this Plan. In particular,
the Committee or the Board, as applicable, shall have the authority:
(a) to select the Participants to whom Stock Options may from
time to time be granted hereunder and the Eligible Employees and
Consultants to whom Stock Appreciation Rights may from time to time be
granted hereunder;
(b) to determine whether and to what extent Stock Options are
to be granted hereunder to one or more Participants and Stock
Appreciation Rights are to be granted hereunder to one or more Eligible
Employees or Consultants;
(c) to determine, in accordance with the terms of this Plan,
the number of shares of Common Stock to be covered by each Award to a
Participant hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of this Plan, of any Award granted hereunder to a
Participant (including, but not limited to, the exercise or purchase
price (if any), any restriction or limitation, any vesting schedule or
acceleration thereof or any forfeiture restrictions or waiver thereof,
regarding any Stock Option or Stock Appreciation Right, and the shares
of Common Stock relating thereto, based on such factors, if any, as the
Committee or the Board, as applicable, shall determine, in its sole
discretion);
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash and/or Common Stock under Section 6.3(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans (which may be on a recourse basis and
shall bear interest at the rate the Committee shall provide) to
Eligible Employees and Consultants in order to exercise Options under
this Plan;
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(g) to determine whether a Stock Appreciation Right shall be a
Tandem Stock Appreciation Right or Non-Tandem Stock Appreciation Right;
(h) to determine whether to require a Participant, as a
condition of the granting of any Award, to not sell or otherwise
dispose of shares acquired pursuant to the exercise of an Option or as
an Award for a period of time as determined by the Committee or the
Board, as applicable, in its sole discretion, following the date of the
acquisition of such Option or Award;
(i) to modify, extend or renew an Award, subject to Section
11.1 herein, provided, however, that if an Award is modified, extended
or renewed and thereby deemed to be the issuance of a new Award under
the Code or the applicable accounting rules, the exercise price of an
Award may continue to be the original exercise price even if less than
the Fair Market Value of the Common Stock at the time of such
modification, extension or renewal; and
(j) to offer to buy out an Option previously granted, based on
such terms and conditions as the Committee or the Board, as applicable,
shall establish and communicate to the Participant at the time such
offer is made.
3.3. GUIDELINES. Subject to Article XI hereof, the Committee or the
Board, as applicable, shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan and perform
all acts, including the delegation of its administrative responsibilities, as it
shall, from time to time, deem advisable; to construe and interpret the terms
and provisions of this Plan and any Award issued under this Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
this Plan. The Committee or the Board, as applicable, may correct any defect,
supply any omission or reconcile any inconsistency in this Plan or in any
agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of both Rule 16b-3 and
Section 162(m) of the Code. The Committee or the Board, as applicable, may adopt
special guidelines and provisions for persons who are residing in, or subject
to, the taxes of, countries other than the United States to comply with
applicable tax and securities laws. To the extent applicable, this Plan is
intended to comply with the applicable requirements of Rule 16b-3 and Section
162(m) of the Code and shall be limited, construed and interpreted in a manner
so as to comply therewith.
3.4. DECISIONS FINAL. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with this Plan
shall be within the absolute discretion of the Company, the Board or the
Committee, as the case may be, and shall be final, binding and conclusive on the
Company and its Affiliates and all employees and Participants and their
respective heirs, executors, administrators, successors and assigns.
3.5. RELIANCE ON COUNSEL. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
3.6. PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places as the Committee shall deem advisable. A majority of the Committee
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all the Committee members in accordance with the By-Laws
of the Company shall be fully as effective as if it had been made by a vote at a
meeting duly called and held. The Committee may keep minutes of its meetings and
may make such rules and regulations for the conduct of its business as it shall
deem advisable.
3.7. DESIGNATION OF CONSULTANTS/LIABILITY.
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(a) The Committee or the Board, as applicable, may designate
employees of the Company and professional advisors to assist the
Committee or the Board, as applicable, in the administration of this
Plan and may grant authority to employees to execute agreements or
other documents on behalf of the Committee or the Board, as applicable.
(b) The Committee or the Board, as applicable, may employ
such legal counsel, consultants and agents as it may deem desirable for
the administration of this Plan and may rely upon any opinion received
from any such counsel or consultant and any computation received from
any such consultant or agent. Expenses incurred by the Committee or
Board in the engagement of any such counsel, consultant or agent shall
be paid by the Company. The Board, its directors, the Committee, its
members and any person designated pursuant to Section 3.7(a) shall not
be liable for any action or determination made in good faith with
respect to this Plan. To the maximum extent permitted by applicable
law, no officer of the Company or member or former member of the
Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Award
granted under it. To the maximum extent permitted by applicable law and
the Certificate of Incorporation and By-Laws of the Company and to the
extent not covered by insurance, each officer and member or former
member of the Committee or of the Board shall be indemnified and held
harmless by the Company against any cost or expense (including
reasonable fees of counsel reasonably acceptable to the Company) or
liability (including any sum paid in settlement of a claim with the
approval of the Company), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted,
arising out of any act or omission to act in connection with this Plan,
except to the extent arising out of such officer's, member's or former
member's own fraud or bad faith. Such indemnification shall be in
addition to any rights of indemnification the officers, directors or
members or former officers, directors or members may have under
applicable law or under the Certificate of Incorporation or By-Laws of
the Company or any Affiliate. Notwithstanding anything else herein,
this indemnification will not apply to the actions or determinations
made by an individual with regard to Awards granted to him under this
Plan.
ARTICLE IV.
SHARE AND OTHER LIMITATIONS
4.1. SHARES.
(a) GENERAL LIMITATION. The aggregate number of shares of
Common Stock which may be issued or used for reference purposes under
this Plan shall not exceed 3,000,000 shares (subject to any increase or
decrease pursuant to Section 4.2) which may be either authorized and
unissued Common Stock or Common Stock held in or acquired for the
treasury of the Company. If any Option or Stock Appreciation Right
granted under this Plan expires, terminates or is canceled for any
reason without having been exercised in full, the number of shares of
Common Stock underlying any unexercised Stock Appreciation Right or
Option shall again be available for the purposes of Awards under this
Plan. If a Tandem Stock Appreciation Right or a Limited Stock
Appreciation Right granted in tandem with an Option is granted under
this Plan, such grant shall only apply once against the maximum number
of shares of Common Stock which may be issued under this Plan. In
addition, in determining the number of shares of Common Stock available
for awards other than awards of Incentive Stock Options, if Common
Stock has been exchanged by a Participant as full or partial payment to
the Company, or for withholding, in connection with the exercise of a
Stock Option or the number shares of Common Stock otherwise deliverable
has been reduced for withholding, the number of shares of Common Stock
exchanged as payment in connection with the exercise or for withholding
or reduced shall again be available under this Plan. Any shares of
Common Stock that are issued by the Company, and any awards that are
granted through the assumption of, or in substitution for, outstanding
awards previously granted by an acquired entity shall not be counted
against the shares of Common Stock available for issuance under this
Plan other than with regard to determining the number of shares
available for Incentive Stock Options.
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(b) INDIVIDUAL PARTICIPANT LIMITATIONS. The maximum number
of shares of Common Stock subject to Awards which may be granted under
this Plan during any calendar year of the Company to each Eligible
Employee shall be 200,000 shares (subject to any increase or decrease
pursuant to Section 4.2) other than with regard to the calendar year in
which an Eligible Employee initially commences employment with the
Company and its Affiliates. With respect to the calendar year in which
an Eligible Employee initially commences employment with the Company
and its Affiliates, but only with regard to such Eligible Employee, the
maximum number of shares of Common Stock subject to Awards which may be
granted under this Plan shall be 400,000 shares (subject to any
increase or decrease pursuant to Section 4.2). If a Tandem Stock
Appreciation Right or Limited Stock Appreciation Right is granted in
tandem with an Option it shall apply against the Eligible Employee's
individual share limitations for both Stock Appreciation Rights and
Options. To the extent that shares of Common Stock for which Options or
Stock Appreciation Rights are permitted to be granted to a Participant
pursuant to Section 4.1(b) during a calendar year of the Company are
not covered by a grant of an Option or a Stock Appreciation Right in
the Company's calendar year, such shares of Common Stock shall be
available for grant or issuance to the Participant in any subsequent
calendar year during the term of this Plan.
4.2. CHANGES.
(a) The existence of this Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board
or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the
Company, or Affiliates, any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the
authorization or issuance of additional shares of Common Stock, the
dissolution or liquidation of the Company or Affiliates, any sale or
transfer of all or part of its assets or business or any other
corporate act or proceeding.
(b) In the event of any change in the capital structure or
business of the Company by reason of any stock dividend or
extraordinary dividend, stock split or reverse stock split,
recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of shares, distribution with respect to its
outstanding Common Stock or capital stock other than Common Stock,
reclassification of its capital stock, any sale or transfer of all or
part of the Company's assets or business, or any similar change
affecting the Company's capital structure or business and the Committee
or the Board, as applicable, determines an adjustment is appropriate
under this Plan, then the aggregate number and kind of shares which
thereafter may be issued under this Plan, the number and kind of shares
or other property (including cash) to be issued upon exercise of an
outstanding Option or other Awards granted under this Plan and the
purchase or exercise price thereof shall be appropriately adjusted
consistent with such change in such manner as the Committee or the
Board, as applicable, may deem equitable to prevent substantial
dilution or enlargement of the rights granted to, or available for,
Participants under this Plan or as otherwise necessary to reflect the
change, and any such adjustment determined by the Committee or the
Board, as applicable, in good faith shall be binding and conclusive on
the Company and all Participants and employees and their respective
heirs, executors, administrators, successors and assigns.
(c) Fractional shares of Common Stock resulting from any
adjustment in Options or Awards pursuant to Section 4.2(a) or (b) shall
be aggregated until, and eliminated at, the time of exercise by
rounding-down for fractions less than one-half and rounding-up for
fractions equal to or greater than one-half. No cash settlements shall
be made with respect to fractional shares eliminated by rounding.
Notice of any adjustment shall be given by the Committee or the Board,
as applicable, to each Participant whose Option or Award has been
adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of this Plan.
(d) In the event of a merger or consolidation in which the
Company is not the surviving entity or in the event of any transaction
that results in the acquisition of all or substantially all of the
Company's outstanding Common Stock by a single person or entity or by a
group of persons and/or entities acting in concert, or in the event of
the sale or transfer of all or substantially all of the Company's
assets (all of the foregoing being referred to as "Acquisition
Events"), then the Committee may, in its sole discretion,
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terminate all outstanding Options and Stock Appreciation Rights of
Eligible Employees and Consultants, effective as of the date of the
Acquisition Event, by delivering notice of termination to each such
Participant at least 30 days prior to the date of consummation of the
Acquisition Event; provided, that during the period from the date on
which such notice of termination is delivered to the consummation of
the Acquisition Event, each such Participant shall have the right to
exercise in full all of his or her Options and Stock Appreciation
Rights that are then outstanding (whether vested or not vested) but
contingent on the occurrence of the Acquisition Event, and, provided
that, if the Acquisition Event does not take place within a specified
period after giving such notice for any reason whatsoever, the notice
and exercise shall be null and void. If an Acquisition Event occurs, to
the extent the Committee does not terminate the outstanding Options and
Stock Appreciation Rights pursuant to this Section 4.2(d), then the
provisions of Section 4.2(b) shall apply. This provision shall not
apply to any Options granted to Non-Employee Directors.
4.3. PURCHASE PRICE. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
ARTICLE V.
ELIGIBILITY
5.1. All employees and Consultants of the Company and its Affiliates
are eligible to be granted Non-Qualified Stock Options and Stock Appreciation
Rights under this Plan. Eligibility shall be determined by the Committee in its
sole discretion.
5.2. All employees of the Company and its Affiliates described in
Section 2.2(i) or (ii) are eligible to be granted Incentive Stock Options under
this Plan. Eligibility shall be determined by the Committee in its sole
discretion.
5.3. Non-Employee Directors of the Company are eligible to receive
automatic awards of Non-Qualified Stock Options in accordance with Article VIII
of this Plan and discretionary awards of Non-Qualified Stock Options under
Article VI of this Plan. Eligibility for discretionary awards of Non-Qualified
Stock Options shall be determined by the Board in its sole discretion.
ARTICLE VI.
STOCK OPTIONS
6.1. OPTIONS. Each Stock Option granted hereunder shall be one of two
types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code, or (ii) a Non-Qualified Stock Option.
6.2. GRANTS. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options (in each case with or without Stock
Appreciation Rights). To the extent that any Stock Option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or manner
of its exercise or otherwise), such Stock Option or the portion thereof which
does not so qualify, shall constitute a separate Non-Qualified Stock Option. The
Committee shall have the authority to grant to any Consultant one or more
Non-Qualified Stock Options (with or without Stock Appreciation Rights). The
Board shall have the authority to grant to any Non-Qualified Director a
Non-Qualified Stock Option. Notwithstanding any other provision of this Plan to
the contrary or any provision in an agreement evidencing the grant of an Option
to the contrary, any Option granted to an Employee of an Affiliate (other than
one described in Section 2.2(i) or (ii)), a Non-Employee Director or a
Consultant shall be a Non-Qualified Stock Option.
6.3. TERMS OF OPTIONS. Options granted under this Plan shall be subject
to the following terms and conditions, and shall be in such form and contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee or the Board, as applicable, shall deem desirable:
8
(a) OPTION EXERCISE PRICE. The exercise price per share of
Common Stock subject to a Stock Option granted under this Article VI
shall be determined by the Committee or the Board, as applicable, at
the time of grant but shall not be less than 100% of the Fair Market
Value of a share of Common Stock at the time of grant; provided,
however, that if an Incentive Stock Option is granted to a Ten Percent
Stockholder, the exercise price per share shall be no less than 110% of
the Fair Market Value of the Common Stock.
(b) OPTION TERM. The term of each Stock Option shall be fixed
by the Committee or the Board, as applicable, but no Stock Option shall
be exercisable more than 10 years after the date the Option is granted,
provided, however, the term of an Incentive Stock Option granted to a
Ten Percent Stockholder may not exceed five years.
(c) EXERCISABILITY. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee or the Board, as applicable, at the time of
grant. If the Committee or the Board provides, in its discretion, that
any Stock Option is exercisable subject to certain limitations
(including, without limitation, that it is exercisable only in
installments or within certain time periods), the Committee or the
Board, as applicable, may waive such limitations on the exercisability
at any time at or after the time of grant in whole or in part
(including, without limitation, that the Committee or the Board, may
waive the installment exercise provisions or accelerate the time at
which Options may be exercised), based on such factors, if any, as the
Committee or the Board shall determine, in its sole discretion.
(d) METHOD OF EXERCISE. Subject to whatever installment
exercise and waiting period provisions apply under Section 6.3(c),
Stock Options may be exercised in whole or in part at any time during
the Option term, by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Common Stock purchased
pursuant to the exercise of a Stock Option shall be paid for at the
time of exercise as follows: (i) in cash or by check, bank draft or
money order payable to the order of Company; (ii) if the Common Stock
is traded on a national securities exchange, the Nasdaq Stock Market,
Inc. or quoted on a national quotation system sponsored by the National
Association of Securities Dealers, through the delivery of irrevocable
instructions to a broker to deliver promptly to the Company an amount
equal to the purchase price; or (iii) on such other terms and
conditions as may be acceptable to the Committee or the Board, as
applicable, (which may include payment in full or part in the form of
Common Stock owned by the Participant for a period of at least 6 months
(and for which the Participant has good title free and clear of any
liens and encumbrances) based on the Fair Market Value of the Common
Stock on the payment date as determined by the Committee or the Board
or the surrender of vested Options owned by the Participant). No shares
of Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.
(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that
the aggregate Fair Market Value (determined as of the time of grant) of
the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Eligible Employee during any
calendar year under this Plan and/or any other stock option plan of the
Company or any Subsidiary or parent corporation (within the meaning of
Section 424(e) of the Code) exceeds $100,000, such Options shall be
treated as Options which are not Incentive Stock Options. In addition,
if an Eligible Employee does not remain employed by the Company, any
Subsidiary or parent corporation (within the meaning of Section 424(e)
of the Code) at all times from the time the Option is granted until 3
months prior to the date of exercise (or such other period as required
by applicable law), such Option shall be treated as an Option which is
not an Incentive Stock Option.
Should the foregoing provision not be necessary in order for
the Stock Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Committee may amend this Plan
accordingly, without the necessity of obtaining the approval of the
stockholders of the Company.
(f) FORM, MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of this
Plan, an Option shall be evidenced by such form of agreement
9
or grant as is approved by the Committee or the Board, as applicable,
and the Committee or the Board may modify, extend or renew outstanding
Options granted under this Plan (provided that the rights of a
Participant are not reduced without his consent), or accept the
surrender of outstanding Options (up to the extent not theretofore
exercised) and authorize the granting of new Options in substitution
therefor (to the extent not theretofore exercised).
(g) OTHER TERMS AND CONDITIONS. Options may contain such
other provisions, which shall not be inconsistent with any of the
foregoing terms of this Plan, as the Committee or the Board, as
applicable, shall deem appropriate including, without limitation,
permitting "reloads" such that the same number of Options are granted
as the number of Options exercised, shares used to pay for the exercise
price of Options or shares used to pay withholding taxes ("Reloads").
With respect to Reloads, the exercise price of the new Stock Option
shall be the Fair Market Value on the date of the "reload" and the term
of the Stock Option shall be the same as the remaining term of the
Options that are exercised, if applicable, or such other exercise price
and term as determined by the Committee or the Board, as applicable.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.1. TANDEM STOCK APPRECIATION RIGHTS. A Tandem Stock Appreciation
Right may be granted in conjunction with all or part of any Stock Option (a
"Reference Stock Option") granted under Article VI of this Plan. In the case of
a Tandem Stock Appreciation Right which is granted in conjunction with a
Non-Qualified Stock Option, such rights may be granted either at or after the
time of the grant of such Reference Stock Option. In the case of a Tandem Stock
Appreciation Right which is granted in conjunction with an Incentive Stock
Option, such rights may be granted only at the time of the grant of such
Reference Stock Option. Consultants shall not be eligible for a grant of Tandem
Stock Appreciation Rights granted in conjunction with all or part of an
Incentive Stock Option.
7.2. TERMS AND CONDITIONS OF TANDEM STOCK APPRECIATION RIGHTS. Tandem
Stock Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article IX and the following:
(a) TERM. A Tandem Stock Appreciation Right or applicable
portion thereof granted with respect to a Reference Stock Option shall
terminate and no longer be exercisable upon the termination or exercise
of the Reference Stock Option, except that, unless otherwise determined
by the Committee, in its sole discretion, at the time of grant, a
Tandem Stock Appreciation Right granted with respect to less than the
full number of shares covered by the Reference Stock Option shall not
be reduced until and then only to the extent the exercise or
termination of the Reference Stock Option causes the number of shares
covered by the Tandem Stock Appreciation Right to exceed the number of
shares remaining available and unexercised under the Reference Stock
Option.
(b) EXERCISABILITY. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the
Reference Stock Options to which they relate shall be exercisable in
accordance with the provisions of Article VI and this Article VII.
(c) METHOD OF EXERCISE. A Tandem Stock Appreciation Right may
be exercised by an optionee by surrendering the applicable portion of
the Reference Stock Option. Upon such exercise and surrender, the
Participant shall be entitled to receive an amount determined in the
manner prescribed in this Section 7.2 and the Reference Stock Option or
part thereof to which such Stock Appreciation Right is related shall be
deemed to have been exercised for the purpose of the limitation set
forth in Article IV of this Plan on the number of shares of Common
Stock to be issued under this Plan. The Stock Options which have been
so surrendered, in whole or in part, shall no longer be exercisable to
the extent the related Tandem Stock Appreciation Rights have been
exercised.
10
(d) PAYMENT. Upon the exercise of a Tandem Stock Appreciation
Right a Participant shall be entitled to receive an amount in cash
and/or Common Stock (as chosen by the Committee in its sole discretion)
equal in value to the excess of the Fair Market Value of one share of
Common Stock over the exercise price per share specified in the
Reference Stock Option multiplied by the number of shares in respect of
which the Tandem Stock Appreciation Right shall have been exercised,
with the Committee having the right to determine the form of payment.
7.3. NON-TANDEM STOCK APPRECIATION RIGHTS. Non-Tandem Stock
Appreciation Rights may also be granted without reference to any Stock Options
granted under Article VI of this Plan.
7.4. TERMS AND CONDITIONS OF NON-TANDEM STOCK APPRECIATION RIGHTS.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article IX and the
following:
(a) TERM. The term of each Non-Tandem Stock Appreciation Right
shall be fixed by the Committee, but shall not be greater than 10 years
after the date the right is granted.
(b) EXERCISABILITY. Non-Tandem Stock Appreciation Rights shall
be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at grant. If the
Committee provides, in its discretion, that any such right is
exercisable subject to certain limitations (including, without
limitation, that it is exercisable only in installments or within
certain time periods), the Committee may waive such limitation on the
exercisability at any time at or after grant in whole or in part
(including, without limitation, that the Committee may waive the
installment exercise provisions or accelerate the time at which rights
may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.
(c) METHOD OF EXERCISE. Subject to whatever installment
exercise and waiting period provisions apply under subsection (b)
above, Non-Tandem Stock Appreciation Rights may be exercised in whole
or in part at any time during its term, by giving written notice of
exercise to the Company specifying the number of Non-Tandem Stock
Appreciation Rights to be exercised.
(d) PAYMENT. Upon the exercise of a Non-Tandem Stock
Appreciation Right a Participant shall be entitled to receive, for each
right exercised, an amount in cash and/or Common Stock (as chosen by
the Committee in its sole discretion) equal in value to the excess of
the Fair Market Value of one share of Common Stock on the date the
right is exercised over the Fair Market Value of one share of Common
Stock on the date the right was awarded to the Participant.
7.5. LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its sole
discretion, grant Limited Stock Appreciation Rights. Limited Stock Appreciation
Rights may be exercised only upon the occurrence of a Change in Control or such
other event as the Committee may, in its sole discretion, designate at the time
of grant or thereafter. Upon the exercise of Limited Stock Appreciation Rights,
except as otherwise provided in an Award agreement, the Participant shall
receive in cash or Common Stock, as determined by the Committee, an amount equal
to the amount: (i) set forth in Section 7.2(d) with respect to Tandem Stock
Appreciation Rights, or (ii) set forth in Section 7.4(d) with respect to
Non-Tandem Stock Appreciation Rights.
ARTICLE VIII.
NON-EMPLOYEE DIRECTOR STOCK OPTIONS
8.1. OPTIONS. The terms of this Article VIII shall apply only to
Options granted to Non-Employee Directors.
8.2. GRANTS. Without further action by the Board or the stockholders of
the Company, each Non-Employee Director shall, subject to the terms of this
Plan, be granted:
11
(a) Options to purchase 20,000 shares of Common Stock as of
the date the Non-Employee Director begins service as a Non-Employee
Director on the Board on or after the Effective Date of this Plan, and
(b) Options to purchase 10,000 shares of Common Stock on the
date of each annual stockholders meeting of the Company, beginning with
the 1998 annual stockholders meeting, provided such Non-Employee
Director has, as of each such annual stockholders meeting, been a
Non-Employee Director for at least 12 months and has not experienced a
Termination of Directorship.
8.3. NON-QUALIFIED STOCK OPTIONS. Stock Options granted under this
Article VIII shall be Non-Qualified Stock Options.
8.4. TERMS OF OPTIONS. Options granted under this Article VIII shall be
subject to the following terms and conditions and shall be in such form and
contain such additional terms and conditions, not inconsistent with terms of
this Plan, as the Board shall deem desirable:
(a) OPTION EXERCISE PRICE. The Option exercise price per share
of Common Stock subject to an Option granted pursuant to Section
8.2(a)(1) shall be equal to 100% of the Fair Market Value of the share
of Common Stock at the time of grant.
(b) EXERCISABILITY. Except as otherwise provided herein, 25%
of any Option granted under this Article VIII shall be exercisable on
or after each of the four anniversaries immediately following the date
of grant. Notwithstanding the foregoing, all Options shall fully vest
and become exercisable upon a Change in Control.
(c) METHOD OF EXERCISE. A Non-Employee Director electing to
exercise one or more Options shall give written notice of exercise to
the Company specifying the number of shares to be purchased. Common
Stock purchased pursuant to the exercise of a Stock Option shall be
paid for at the time of exercise as follows: (i) in cash or by check,
bank draft or money order payable to the order of Company; (ii) if the
Common Stock is traded on a national securities exchange, the Nasdaq
Stock Market, Inc. or quoted on a national quotation system sponsored
by the National Association of Securities Dealers, through the delivery
of irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the purchase price; or (iii) on such other
terms and conditions as may be acceptable to the Board (which may
include payment in full or part in the form of Common Stock owned by
the Participant for a period of at least 6 months (and for which the
Participant has good title free and clear of any liens and
encumbrances) based on the Fair Market Value of the Common Stock on the
payment date as determined by the Board or the surrender of vested
Options owned by the Participant). No shares of Common Stock shall be
issued until payment therefore, as provided herein, has been made or
provided for.
(d) OPTION TERM. Except as otherwise provided herein, if not
previously exercised each Option shall expire upon the tenth
anniversary of the date of the grant thereof.
8.5. TERMINATION OF DIRECTORSHIP. The following rules apply with regard
to Options (including Options granted under Articles VI and VIII) upon the
Termination of Directorship:
(a) TERMINATION OF DIRECTORSHIP BY REASON OF DEATH OR
DISABILITY. Except as otherwise provided herein, upon the Termination
of Directorship, on account of death or Disability, all then
outstanding Options shall fully vest and become exercisable and shall
remain exercisable by the Participant or, in the case of death, by the
Participant's estate or by the person given authority to exercise such
Options by his or her will or by operation of law, at any time within a
period of one year from the date of such Termination of Directorship,
but in no event beyond the expiration of the stated term of such Stock
Option.
(b) OTHERWISE CEASING TO BE A DIRECTOR OTHER THAN FOR CAUSE.
Except as otherwise provided herein, upon the Termination of
Directorship, on account of Retirement, resignation, failure to stand
for
12
reelection or failure to be reelected or otherwise other than as set
forth in (b) below, all outstanding Options then exercisable and not
exercised by the Participant prior to such Termination of Directorship
shall remain exercisable, to the extent exercisable at the Termination
of Directorship, at any time within a period of one year from the date
of such Termination of Directorship, but in no event beyond the
expiration of the stated term of such Stock Option.
(c) CAUSE. Upon removal, failure to stand for reelection or
failure to be renominated for Cause, or if the Company obtains or
discovers information after Termination of Directorship that such
Participant had engaged in conduct that would have justified a removal
for Cause during such directorship, all outstanding Options of such
Participant shall immediately terminate and shall be null and void.
(d) CANCELLATION OF OPTIONS. Except as provided in (a) above,
no Options that were not exercisable during the period such person
serves as a director shall thereafter become exercisable upon a
Termination of Directorship for any reason or no reason whatsoever, and
such Options shall terminate and become null and void upon a
Termination of Directorship.
8.6. CHANGES.
(a) The Awards to a Non-Employee Director under Articles VI
and VIII shall be subject to Sections 4.2(a), (b) and (c) of this Plan
and this Section 8.6, but shall not be subject to Section 4.2(d).
(b) If the Company shall not be the surviving corporation in
any merger or consolidation, or if the Company is to be dissolved or
liquidated, then, unless the surviving corporation assumes the Options
or substitutes new Options which are determined by the Board in its
sole discretion to be substantially similar in nature and equivalent in
terms and value for Options then outstanding, upon the effective date
of such merger, consolidation, liquidation or dissolution, any
unexercised Options shall expire without additional compensation to the
holder thereof; provided, that, the Board shall deliver notice to each
Non-Employee Director at least 30 days prior to the date of
consummation of such merger, consolidation, dissolution or liquidation
which would result in the expiration of the Options and during the
period from the date on which such notice of termination is delivered
to the consummation of the merger, consolidation, dissolution or
liquidation, such Participant shall have the right to exercise in full
effective as of such consummation all Options that are then outstanding
(without regard to limitations on exercise otherwise contained in the
Options) but contingent on occurrence of the merger, consolidation,
dissolution or liquidation, and, provided that, if the contemplated
transaction does not take place within a 90 day period after giving
such notice for any reason whatsoever, the notice, accelerated vesting
and exercise shall be null and void and, if and when appropriate, new
notice shall be given as aforesaid.
13
ARTICLE IX.
NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY PROVISIONS
9.1. Except as otherwise provided in this Section 9.1, no Stock Option
or Stock Appreciation Right shall be Transferred by the Participant otherwise
than by will or by the laws of descent and distribution. All Stock Options and
all Stock Appreciation Rights shall be exercisable, during the Participant's
lifetime, only by the Participant. Tandem Stock Appreciation Rights may be
Transferred, to the extent permitted above, only with the underlying Stock
Option. No Award shall, except as otherwise specifically provided by law or
herein, be Transferred in any manner, and any attempt to Transfer any such Award
shall be void, and no such Award shall in any manner be used for the payment of,
subject to, or otherwise encumbered by or hypothecated for the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
Award, nor shall it be subject to attachment or legal process for or against
such person. Notwithstanding the foregoing, the Committee may determine at the
time of grant or thereafter, that a Non-Qualified Stock Option granted pursuant
to Article VI (other than a Non-Qualified Stock Option granted to a Non-Employee
Director) that is otherwise not transferable pursuant to this Article IX is
transferable in whole or part and in such circumstances, and under such
conditions, as specified by the Committee.
9.2. TERMINATION OF EMPLOYMENT OR TERMINATION OF CONSULTANCY. The
following rules apply with regard to Options and SARs upon the Termination of
Employment or Termination of Consultancy of a Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant (or his
estate in the event of death) are reduced, thereafter:
(a) TERMINATION BY REASON OF DEATH. If a Participant's
Termination of Employment or Termination of Consultancy is by reason of
his death, any Stock Option or SAR held by such Participant may be
exercised, to the extent exercisable at the Participant's Termination
of Employment or Termination of Consultancy, by the Participant's
estate or by the person given authority to exercise such Options by his
or her will or by operation of law, at any time within a period of one
year from the date of such death, but in no event beyond the expiration
of the stated term of such Stock Option or SAR.
(b) TERMINATION BY REASON OF DISABILITY OR RETIREMENT. If a
Participant's Termination of Employment or Termination of Consultancy
is by reason of his Disability or Retirement, any Stock Option or SAR
held by such Participant may be exercised, to the extent exercisable at
the Participant's Termination of Employment or Termination of
Consultancy, by the Participant, at any time within a period of one
year from the date of such Termination of Employment or Termination of
Consultancy, but in no event beyond the expiration of the stated term
of such Stock Option or SAR; provided, however, that, if the
Participant dies within such exercise period, any unexercised Stock
Option or SAR held by such Participant shall thereafter be exercisable
by the Participant's estate or by the person given authority to
exercise such Options by his or her will or by operation of law, to the
extent to which it was exercisable at the time of death, for a period
of one year (or such other period as the Committee may specify at grant
or, if no rights of the Participant's estate are reduced, thereafter)
from the date of such death, but in no event beyond the expiration of
the stated term of such Stock Option or SAR.
(c) INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant's
Termination of Employment or Termination of Consultancy is by
involuntary termination without Cause, any Stock Option or SAR held by
such Participant may be exercised, to the extent exercisable at
termination, by the Participant at any time within a period of 90 days
from the date of such termination, but in no event beyond the
expiration of the stated term of such Stock Option or SAR.
(d) VOLUNTARY TERMINATION BY THE PARTICIPANT. If a
Participant's Termination of Employment or Termination of Consultancy
is a voluntary termination by the Participant and occurs prior to, or
more than 90 days after, the occurrence of an event which would be
grounds for Termination of Employment or Termination of Consultancy for
Cause (without regard to any notice or cure period requirements), any
Stock Option or SAR held by such Participant may be exercised, to the
extent exercisable at termination, by the
14
Participant at any time within a period of 30 days from the date of
such termination, but in no event beyond the expiration of the stated
term of such Stock Option or SAR.
(e) TERMINATION FOR CAUSE. If a Participant's Termination of
Employment or Termination of Consultancy is: (i) for Cause, or (ii) a
voluntary termination (as provided in subsection (d) above) within 90
days after an event which would be grounds for a Termination of
Employment or Termination of Consultancy for Cause, any Stock Option or
SAR held by such Participant shall thereupon terminate and expire as of
the date of termination.
9.3. TERMINATION REPAYMENT. Notwithstanding anything else in this Plan
to the contrary, in the event (i) a Participant's Termination of Employment or
Termination of Consultancy occurs not more than 3 months after the exercise of a
Stock Option or SAR, or (ii) a Participant engages in a competitive activity as
determined by the Committee in its sole discretion after the exercise of a Stock
Option or SAR, the Committee may, in its sole discretion, require the
Participant to pay the Company an amount in cash, for each share with respect to
which the Option or SAR was exercised, equal to the difference between: (i) the
Fair Market Value of the Common Stock on the date of such termination or
determination, as applicable, and (ii) the exercise price for each such share.
ARTICLE X.
CHANGE IN CONTROL PROVISIONS
10.1. BENEFITS. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Option to an Eligible Employee or Consultant, the Participant shall be
entitled to the following benefits:
(a) Subject to paragraph (b) below with regard to Options
granted to Eligible Employees and Consultants, all outstanding Options
and the related Tandem Stock Appreciation Rights and Non-Tandem Stock
Appreciation Rights of such Participant granted prior to the Change in
Control shall be fully vested and immediately exercisable in their
entirety. The Committee or the Board (as applicable), in its sole
discretion, may provide for the purchase of any such Stock Options by
the Company for an amount of cash equal to the excess of the Change in
Control Price (as defined below) of the shares of Common Stock covered
by such Stock Options, over the aggregate exercise price of such Stock
Options. For purposes of this Section 10.1, Change in Control Price
shall mean the higher of: (i) the highest price per share of Common
Stock paid in any transaction related to the Change in Control of the
Company, or (ii) the highest Fair Market Value per share of Common
Stock at any time during the 60 day period preceding the Change in
Control.
(b) Notwithstanding anything to the contrary herein, unless
the Committee provides otherwise at the time an Option is granted to an
Eligible Employee or Consultant hereunder or thereafter, no
acceleration of exercisability shall occur with respect to such Option
if the Committee reasonably determines in good faith, prior to the
occurrence of the Change in Control, that the Options shall be honored
or assumed, or new rights substituted therefor (each such honored,
assumed or substituted option hereinafter called an "Alternative
Option"), by a Participant's employer (or the parent or an subsidiary
of such employer), or, in the case of a Consultant, by the entity (or
its parent or subsidiary) which retains the Consultant, immediately
following the Change in Control, provided that any such Alternative
Option must meet the following criteria:
(i) the Alternative Option must be based on stock
which is traded on an established securities market, or which will be
so traded within 30 days of the Change in Control;
(ii) the Alternative Option must provide such
Participant with rights and entitlements substantially equivalent to or
better than the rights, terms and conditions applicable under such
Option, including, but not limited to, an identical or better exercise
schedule; and
15
(iii) the Alternative Option must have economic value
substantially equivalent to the value of such Option (determined at the
time of the Change in Control).
For purposes of Incentive Stock Options, any assumed or
substituted Option shall comply with the requirements of Treasury regulation
Section 1.425-1 (and any amendments thereto).
(c) Notwithstanding anything else herein, the Committee may,
in its sole discretion, provide for accelerated vesting of an Option
(other than a grant to a Non-Employee Director pursuant to Article VIII
hereof) or Stock Appreciation Right, upon a Termination of Employment
or Termination of Consultancy during the Pre-Change in Control Period.
Unless otherwise determined by the Committee, the Pre-Change in Control
Period shall be the 180 day period prior to a Change in Control.
10.2. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred:
(a) upon any "person" as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Company, any trustee or
other fiduciary holding securities under any employee benefit plan of
the Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of Common Stock of the Company), becoming the owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities (including,
without limitation, securities owned at the time of any increase in
ownership);
(b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this section) or a director whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of the two year period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;
(c) upon the merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation, provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires more than 50% of
the combined voting power of the Company's then outstanding securities
shall not constitute a Change in Control of the Company; or
(d) upon the stockholder's of the Company approval of a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale of all or substantially all of the assets of
the Company to a person or persons who beneficially own, directly or
indirectly, at least 50% or more of the combined voting power of the
outstanding voting securities of the Company at the time of the sale.
16
ARTICLE XI.
TERMINATION OR AMENDMENT OF PLAN
11.1. TERMINATION OR AMENDMENT. Notwithstanding any other provision of
this Plan, the Board or the Committee may at any time, and from time to time,
amend, in whole or in part, any or all of the provisions of this Plan (including
any amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in this Article XI), or suspend or terminate
it entirely, retroactively or otherwise; provided, however, that, unless
otherwise required by law or specifically provided herein, the rights of a
Participant with respect to Awards granted prior to such amendment, suspension
or termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company in
accordance with the laws of the State of Delaware, to the extent required by the
applicable provisions of Rule 16b-3 or Section 162(m) of the Code, or with
respect to Incentive Stock Options, Section 422 of the Code, no amendment may be
made which would: (i) increase the aggregate number of shares of Common Stock
that may be issued under this Plan; (ii) increase the maximum individual
Participant limitations for a fiscal year under Section 4.1(b); (iii) change the
classification of employees and Consultants eligible to receive Awards under
this Plan; (iv) decrease the minimum exercise price of any Stock Option or SAR;
or (v) extend the maximum option term under Section 6.3(b). In no event may this
Plan be amended without the approval of the stockholders of the Company in
accordance with the applicable laws of the State of Delaware to increase the
aggregate number of shares of Common Stock that may be issued under this Plan
(subject to Section 4.2), decrease the minimum exercise price of any Stock
Option, or to make any other amendment that would require stockholder approval
under the rules of any exchange or system on which the Company's securities are
listed or traded at the request of the Company.
The Committee (and in the case of awards of Stock Options to
Non-Employee Directors, the Board) may amend the terms of any Award theretofore
granted, prospectively or retroactively, but, subject to Article IV or as
otherwise specifically provided herein, no such amendment or other action by the
Committee (or the Board) shall impair the rights of any Participant without the
Participant's consent.
ARTICLE XII.
UNFUNDED PLAN
12.1. UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
creditor of the Company.
ARTICLE XIII.
GENERAL PROVISIONS
13.1. LEGEND. The Committee or the Board, as applicable, may require
each person receiving shares pursuant to an Award under this Plan to represent
to and agree with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any legend
required by this Plan, the certificates for such shares may include any legend
which the Committee or the Board, as applicable, deems appropriate to reflect
any restrictions on Transfer.
All certificates for shares of Common Stock delivered under this Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee or the Board, as applicable, may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock is then listed or any national
securities association system upon whose system the Common Stock is then quoted,
any applicable Federal or state securities law, and any applicable corporate
law, and the Committee or the
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Board, as applicable, may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
13.2. OTHER PLANS. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
13.3. NO RIGHT TO EMPLOYMENT/CONSULTANCY/DIRECTORSHIP. Neither this
Plan nor the grant of any Award hereunder shall give any Participant or other
employee or Consultant any right with respect to continuance of employment or
consultancy by the Company or any Affiliate, nor shall they be a limitation in
any way on the right of the Company or any Affiliate by which an employee is
employed or consultant retained to terminate his employment or consultancy, as
applicable, at any time. Neither this Plan nor the grant of any Option hereunder
shall impose any obligations on the Company to retain any Participant as a
director nor shall it impose on the part of any Participant any obligation to
remain as a director of the Company.
13.4. WITHHOLDING OF TAXES. The Company shall have the right to deduct
from any payment to be made to a Participant, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.
The Committee shall permit any such withholding obligation with regard
to an Eligible Employee or Consultant to be satisfied by reducing the number of
shares of Common Stock otherwise deliverable or by delivering shares of Common
Stock already owned. Any fraction of a share of Common Stock required to satisfy
such tax obligations shall be disregarded and the amount due shall be paid
instead in cash by the Participant.
13.5. LISTING AND OTHER CONDITIONS.
(a) As long as the Common Stock is listed on a national
securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an
Award shall be conditioned upon such shares being listed on such
exchange or system. Notwithstanding the foregoing, the grant of an
Award hereunder is not intended to be conditional and the Company shall
have no obligation to issue such shares unless and until such shares
are so listed; provided, however, that any delay in the issuance of
such shares shall be based solely on a reasonable business decision and
the right to exercise any Option with respect to such shares shall be
suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant to
an Award is or may in the circumstances be unlawful or result in the
imposition of excise taxes on the Company under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no
obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect to shares
of Common Stock or Awards, and the right to exercise any Option shall
be suspended until, in the opinion of said counsel, such sale or
delivery shall be lawful or will not result in the imposition of excise
taxes on the Company.
(c) Upon termination of any period of suspension under this
Section 13.5, any Award affected by such suspension which shall not
then have expired or terminated shall be reinstated as to all shares
available before such suspension and as to shares which would otherwise
have become available during the period of such suspension, but no such
suspension shall extend the term of any Option.
13.6. GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).
13.7. CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever
18
any words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
To the extent applicable, this Plan shall be limited, construed and interpreted
in a manner so as to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3; however, noncompliance with Section 162(m) of the
Code and Rule 16b-3 shall have no impact on the effectiveness of an Award under
this Plan.
13.8. OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries or affiliates nor affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation.
13.9. COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder.
13.10. NO RIGHT TO SAME BENEFITS. The provisions of Awards need not be
the same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
13.11. DEATH/DISABILITY. The Committee or the Board, as applicable, may
in its discretion require the transferee of a Participant's Award to supply the
Company with written notice of the Participant's death or Disability and to
supply the Company with a copy of the will (in the case of the Participant's
death) or such other evidence as the Committee or the Board, as applicable,
deems necessary to establish the validity of the Transfer of an Award. The
Committee or the Board, as applicable, may also require that the transferee
agree in writing to be bound by all of the terms and conditions of this Plan.
13.12. SEVERABILITY OF PROVISIONS. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
13.13. HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
this Plan, and shall not be employed in the construction of this Plan.
ARTICLE XIV.
EFFECTIVE DATE OF PLAN
This Plan has been adopted by the Board effective as of April 21, 1998
(the "Effective Date"), subject to and conditioned upon the approval of this
Plan by the stockholders of the Company in accordance with the requirements of
the laws of the State of Delaware and any applicable exchange requirements.
ARTICLE XV.
TERM OF PLAN
No Award shall be granted pursuant to this Plan on or after the tenth
anniversary of the Effective Date, but Awards granted prior to such tenth
anniversary may extend beyond that date.
ARTICLE XVI.
NAME OF PLAN
This Plan shall be known as the AXS-One Inc. 1998 Stock Option Plan.
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ADDENDUM TO THE AXS-ONE INC.
1998 STOCK OPTION PLAN
FOR EMPLOYEES RESIDING IN FRANCE
The following provisions apply to awards under the AXS-One
Inc. 1998 Stock Option Plan (the "Plan") to employees of the Corporation's
French subsidiary (the "French Subsidiary"):
1. Employees of the French Subsidiary are not eligible to receive awards
of tandem or limited stock appreciation rights under the Plan.
2. Consultants, independent advisors and non-employee members of the board
of directors of the French Subsidiary are not eligible to receive any
awards under the Plan.
3. Options may not be granted to employees of the French Subsidiary who
hold shares representing ten percent (10%) or more of the Corporation's
share capital and/or the French Subsidiary's share capital.
4. The exercise price of any option granted to an employee of the French
Subsidiary may not be less than one hundred percent (100%) of the
average of the market value of a share of Common Stock on the twenty
(20) daily sessions immediately preceding the option grant date.
5. Options to purchase authorized but unissued shares of Common Stock may
not be granted to employees of the French Subsidiary more than five (5)
years after the date on which the stockholders of the Corporation
approved the Plan.
6. The exercise price of any option granted to employees of the French
Subsidiary is intangible and shall be adjusted only upon the occurrence
of the events specified under the July 24, 1966 corporate law (section
208-5) in accordance with French law.
7. Upon the death of an employee of the French Subsidiary, any outstanding
options shall remain exercisable, to the extent exercisable at the time
of death, for not more than six (6) months after the date of death (or,
if earlier, the expiration of the option term) .
8. The Plan Administrator shall not have the authority to grant
transferable options to employees of the French Subsidiary.