Exhibit 10.1
Ivoice.com, Inc.
1999 STOCK OPTION PLAN
SECTION 1
DEFINITIONS
As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Administrator" means the Board or the Committee, whichever shall be
administering the Plan from time to time in the discretion of the Board, as
described in Section 3 of the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee appointed by the Board in accordance
with Section 3 of the Plan.
(f) "Company" means Ivoice.com, Inc., a Delaware corporation.
(g) "Director" means a member of the Board of Directors of the Company.
(h) "Employee" means an individual who is employed (within the meaning of
Section 3401 of the Code and the regulations thereunder) by the Company or any
future Parent Corporation or Subsidiary Corporation of the Company.
(i) "Employer Company" means the company, whether the Company or a Parent
Corporation or Subsidiary Corporation of the Company, which employs the
Employee.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value of Shares" shall mean (i) if the Shares are not
publicly traded on the day in question, the fair market value of the Shares on
the day in question as determined and set forth in writing by the Administrator
(which, in making such determination, shall make a good faith effort to
establish the true fair market value of the Shares as of such date using such
methods as it deems appropriate, including independent appraisals, and taking
into consideration any requirements set forth in the Code or the regulations
thereunder), (ii) if the Shares are publicly traded on the day in question, the
closing price of the Shares on the day in question. The closing price shall be
the average of the highest and lowest quoted selling prices on the New York
Stock Exchange or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which the Shares are
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, as reported by the Nasdaq Stock Market's National
Market on the day in question, or by the Nasdaq SmallCap Market, or by the
Nasdaq Over the Counter Bulletin Board, or (iii) if the Shares are not listed or
admitted to trading on any national securities exchange or reported by the
Nasdaq Stock Market's National Market, the closing price of the Shares shall be
the average of the highest and lowest quoted selling prices as reported by The
Wall Street Journal for the over-the-counter market on the day in question.
(l) "Incentive Stock Option" means an Option for Shares which is intended
to be, designated in writing as, and qualifies as an Incentive Stock Option
within the meaning of Section 422 of the Code.
(m) "Inside Director" means a Director who is an Employee.
(n) "Key Employee" means any Employee so designated pursuant to Section
3.2 by the Administrator to receive Options.
(o) "Nonstatutory Stock Option" means an Option which is not an Incentive
Stock Option and which is designated as a Nonstatutory Stock Option by the
Board.
(p) "Option" means an option to purchase a Share pursuant to the
provisions of this Plan.
(q) "Optionee" means an Employee or Outside Director to whom an Option has
been granted hereunder.
(r) "Option Price" means the price per share of the Shares subject to each
Option as provided in Section 6.4.
(s) "Option Term" means the maximum period of time during which an Option
may be exercised as set forth in Section 6.5 below.
(t) "Outside Director" means a Director who is not an Employee.
(u) "Parent Corporation" shall have the meaning assigned to that term
under Section 424 of the Code.
(v) "Plan" means the Ivoice.com, Inc. 1999 Stock Option Plan, the terms
of which are set forth herein.
(w) "Share" or "Shares" means Class A Common Stock, $.01 par value, or, in
the event that the outstanding Shares are hereafter changed into or exchanged
for different shares or securities of the Company or some other corporation or
other entity, such other shares or securities.
(x) "Stock Option Agreement" means the agreement described in Section 6.1
between the Company and the Optionee under which the Optionee may purchase
Shares hereunder.
(y) "Subsidiary Corporation" shall have the meaning assigned to that term
under Section 424 of the Code.
(z) "Total and Permanent Disability", unless otherwise specified in the
applicable Stock Option Agreement, means the inability of an Employee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve months.
SECTION 2
THE PLAN
2.1. Name. This Plan shall be known as "Ivoice.com, Inc. 1999 Stock
Option Plan."
2.2. Purpose. The purpose of this Plan is to advance the interests of the
Company and its stockholders by affording Employees of the Employer Company and
Outside Directors an opportunity to acquire or increase their proprietary
interest in the Company by the grant to such individuals of Options under the
terms set forth herein. By thus encouraging such individuals to acquire or
increase their proprietary interest in the Company, the Company seeks to
attract, motivate and retain those highly competent individuals upon whose
judgment, initiative, leadership, and continued efforts the success of the
Company in large measure depends.
2.3. Intention. It is intended that Options (if any) issued to Employees
as Incentive Stock Options under this Plan will qualify as Incentive Stock
Options under Section 422 of the Code and the terms of this Plan shall be
interpreted in accordance with such intention. Options issued to Outside
Directors shall be Non-Statutory Stock Options.
SECTION 3
ADMINISTRATION
3.1. Administration. The Plan shall be administered, in the discretion of
the Board from time to time, by the Board or by the Committee acting as the
Administrator. The Committee shall be appointed by the Board, in a manner
consistent with the Company's Bylaws, and shall consist of not less than three
(3) members of the Board; provided, however, that, after the Company effects an
initial public offering, the Committee will be comprised of solely two (2) or
more members, each of who is an outside director (within the meaning of Code
Section 162(m) and the Treasury Regulations thereunder) as well as a
non-employee director (within the meaning of Rule 16(b)-3 of the Securities and
Exchange Commission adopted under the Securities Exchange Act of 1934, as
amended). The Board may from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee, however caused,
shall be filled by the Board. The Board may appoint one (1) of the members of
the Committee as Chairman. The Administrator shall hold meetings at such times
and places as it may determine. Acts of a majority of the Administrator at which
a quorum is present, or acts reduced to or approved in writing by the unanimous
consent of the members of the Administrator, shall be the valid acts of the
Administrator.
3.2. Duties. The Administrator shall from time to time at its discretion
select the Employees who are to be granted Options, determine the number of
Shares to be subject to Options to be granted to each Optionee and designate any
such Options granted to Employees as Incentive Stock Options or Non-Statutory
Stock Options. The interpretation and construction by the Administrator of any
provisions of the Plan or of any Option granted thereunder shall be final. No
member of the Administrator shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted hereunder.
SECTION 4
PARTICIPATION
4.1. Eligibility. The Optionees shall be:
(a) such persons (collectively, "Participants"; individually a
"Participant") as the Administrator may select from among the following classes
of persons, subject to the terms and conditions of Section 4.2 below:
(1) Key Employees of the Company;
(2) Key Employees of the Company's Parent Corporations or Subsidiary
Corporations; and
(b) Outside Directors, who shall automatically be eligible to participate
in the Plan in accordance with Section 6.12 below.
4.2. Ten-Percent Stockholders. An Employee who beneficially owns more than
ten percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, as determined under Sections 422 and 424 of
the Code, shall not be eligible to receive an Incentive Stock Option unless (i)
the Option Price of the Shares subject to such Option is at least one hundred
ten percent (110%) of the Fair Market Value of such Shares on the date of grant
and (ii) such Option by its terms is not exercisable after the expiration of
five (5) years from the date of grant.
(a) Stock Ownership. For purposes of Section 4.2 above, in determining
stock ownership, an Employee's beneficial ownership of any class of outstanding
stock of the Employer Company or a Parent Corporation or a Subsidiary
Corporation shall be determined as provided in Rule 16a-1(a) of the Securities
and Exchange Commission adopted under the Exchange Act, and in any event (i)
such Participant shall be considered as owning the stock owned, directly or
indirectly, by or for his or her brothers and sisters, spouse, ancestors and
lineal descendants; (ii) stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its stockholders, partners or beneficiaries; and (iii)
stock with respect to which such Participant holds an Option shall not be
counted.
(b) Outstanding Stock. For purposes of Section 4.2 above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant of the Option to the Optionee. "Outstanding stock" shall not include
shares authorized for issue under outstanding Options held by the Optionee or by
any other person.
SECTION 5
SHARES SUBJECT TO PLAN
5.1. Shares Available for Options. Subject to adjustment pursuant to the
provisions of Section 5.2 hereof, the total number of Shares which may be issued
upon the exercise of all Options shall not exceed 7,500,000 Shares. Such Shares
may be either authorized and unissued Shares or issued Shares which have been
reacquired by the Company (pursuant to Section 6.7(d) or otherwise). If any
Option shall expire or terminate for any reason without having been exercised in
full, new Options may be granted covering Shares originally set aside for the
unexercised portion of such expired or terminated Option.
5.2. Adjustments.
(a) Stock Splits and Dividends. Subject to any required action by the
Board, the number of Shares covered by the Plan as provided in Section 5.1
hereof, the number of Shares covered by each outstanding Option and the Option
Price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from a recapitalization, reclassification,
subdivision or consolidation of Shares or the payment of a stock dividend (but
only if paid in Shares), a stock split or any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the
Company.
(b) Mergers. Subject to any required action by the Board and/or
stockholders, if the Company shall merge with another corporation and the
Company is the surviving corporation in such merger and under the terms of such
merger the Shares outstanding immediately prior to the merger remain outstanding
and unchanged, each outstanding Option shall continue to apply to the Shares
subject thereto and shall also pertain and apply to any additional securities
and other property, if any, to which a holder of the number of Shares subject to
the Option would have been entitled as a result of the merger.
(c) Adjustment Determination. To the extent that the foregoing adjustments
relate to securities of the Company, such adjustments shall be made by the
Administrator, whose determination shall be conclusive and binding on all
persons. In computing any adjustment under this Section 5.2, any fractional
Share which might otherwise become subject to an Option shall be eliminated.
(d) Special Dividends. Subject to any required action by the Board, the
Administrator shall be entitled to determine whether any adjustment shall be
made with respect to the number of Shares covered by the Plan as provided in
Section 5.1 hereof, the number of Shares covered by each outstanding Option and
the Option Price thereof if the Company pays a special or extraordinary
dividend.
SECTION 6
OPTIONS
6.1. Option Grant and Agreement.
(a) The Administrator may from time to time, subject to the terms of this
Plan, grant to any Participant (other than a person who is an Outside Director)
one or more Options but in no event may any such Participant receive Options
under this Plan on more than 500,000 Shares during any one calendar year. Each
Option grant shall be evidenced by a written Stock Option Agreement, dated as of
the date of grant and executed by the Company and the Optionee, which Stock
Option Agreement shall set forth the number of Options granted, whether the
Options are Incentive Stock Options or Nonstatutory Stock Options, the Option
Price, the Option Term and such other terms and conditions as may be determined
appropriate by the Administrator, provided that such terms and conditions are
not inconsistent with the Plan. The Stock Option Agreement shall incorporate
this Plan by reference and provide that any inconsistencies or disputes shall be
resolved in favor of the Plan language.
(b) Except as provided in Section 6.12 below, grants under the Plan shall
be made by the Administrator selectively among the Participants and the terms
and provisions of such grants and the agreements evidencing the same (including,
without limitation, the form, the amount, the timing, the exercisability and the
vesting schedule of such grants) need not be uniform, whether or not the
Optionees are similarly situated.
6.2. Conditions with Respect to Non-Statutory Stock Options. Certain
Non-Statutory Stock Options ("Performance Grants") shall be subject to the
following conditions, which conditions shall be stated within the applicable
Stock Option Agreement.
(a) At the time of grant, the Administrator may, in its discretion, place
additional restrictions on Performance Grants requiring that, for example, the
Option will vest only if and when, or on an accelerated basis if and when, the
Common Stock price exceeds a specific amount. Generally, Performance Grants will
be subject to the same requirements described herein, unless the Administrator
decides otherwise.
(b) At the time of grant, the Administrator may, in its discretion, place
additional restrictions on the Performance Grants requiring that on the exercise
of such a grant an Employee will purchase Shares that will be forfeited if the
Optionee terminates employment within a certain number of years. Additional
transferability restrictions may be imposed in connection with Performance
Grants.
6.3. Conditions with Respect to Incentive Stock Options. Each Incentive
Stock Option shall be subject to the following conditions, which conditions
shall be stated within the applicable Stock Option Agreement. Any Incentive
Stock Option which does not comply with these provisions shall not be considered
an Incentive Stock Option and instead shall be considered a Nonstatutory Option
issued under the Plan:
(a) To the extent that the aggregate Fair Market Value of Shares
(determined as of the time an Option is granted) exercisable for the first time
by an Optionee during any calendar year under such Incentive Stock Option and
any other Incentive Stock Option issued by the Company or any Subsidiary
Corporation or Parent Corporation exceeds $100,000, such excess Incentive Stock
Options shall be deemed Nonstatutory Stock Options.
(b) No Incentive Stock Option may be assigned or transferred by an
Optionee other than by will or by the laws of descent and distribution. During
the lifetime of an Incentive Stock Optionee, the Option may be exercisable only
by the Optionee. Transfer of an Incentive Stock Option by will or by the laws of
descent and distribution shall not be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an
authenticated copy of the will or such other evidence as the Administrator may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee of the terms and conditions of such Incentive Stock Option.
6.4. Option Price. The Option Price shall be determined by the
Administrator, subject to any limitations imposed by this Plan and, in any
event, shall not be less than eighty-five (85) percent of the Fair Market Value
on the date of grant. The Option Price for Incentive Stock Options shall not be
less than the Fair Market Value of Shares on the date such Incentive Stock
Options are granted and, in the case of Incentive Stock Options granted to an
Optionee described in Section 4.2 hereof, the Option Price shall not be less
than one hundred ten percent (110%) of the Fair Market Value of Shares on the
date of grant.
6.5. Option Term. The Option Term shall be determined by the Administrator
at the time of grant, subject to any limitations imposed by this Plan, but in
any event shall not be more than ten years from the date such Option is granted,
and, in the case of an Incentive Stock Option granted to an Optionee described
in Section 4.2 hereof, shall not be more than five years from the date such
Option is granted. Options may be subject to earlier termination as provided in
this Plan.
6.6. Limitations on Exercise of Options. Notwithstanding anything
contained in this Plan to the contrary:
(a) Options may not be exercised until the Plan has been ratified by the a
majority of the stockholders as provided in Section 9.8.
(b) Options shall be exercisable in full or in such equal or unequal
installments as the Administrator shall determine; provided that if an Optionee
does not purchase all of the Shares which the Optionee is entitled to purchase
on a certain date or within an established installment period, the Optionee's
right to purchase any unpurchased Shares shall continue during the Option Term
(taking into account any early termination of such Option Term which may be
provided for under the Plan); provided, further that an Optionee who is not an
officer, director or consultant shall have the right to exercise at least 20% of
the options granted per year over five (5) years from the grant date.
6.7. Method of Exercising Options; Withholding Tax.
(a) Options shall be exercised by a written notice, delivered to the
Company at its principal office located at 1230 Route 34, Aberdeen, NJ 07747,
Attention: Stock Option Committee, or such other address that may be designated
by the Company, specifying the number of Shares to be purchased and tendering
payment in full for such Shares. Payment may be tendered in cash or by
certified, bank cashier's or teller's check or by Shares (valued at Fair Market
Value as of the date of tender), or some combination of the foregoing or such
other form of consideration which has been approved by the Board or the
Committee, including any approved cashless exercise mechanism or a promissory
note given by the Optionee. The right to deliver in full or partial payment of
such Option Price any
consideration other than cash shall be limited to such frequency as the Board or
the Committee shall determine in its absolute discretion from time to time. In
the event all or part of the Option Price is paid in Shares, any excess of the
value of such Shares over the Option Price will be returned to the Optionee as
follows: (i) any whole Share remaining in excess of the Option Price will be
returned in kind, and may be represented by one or more share certificates; and
(ii) any partial Shares remaining in excess of the Option Price will be returned
in cash.
(b) In the event an Optionee pays all or part of the Option Price in
Shares, the Administrator shall be entitled as it deems appropriate to award to
the Optionee additional Options equal to the number of Shares tendered to
exercise, provided such Option has an Option Price equal to Fair Market Value.
(c) In the event the Company determines that it is required to withhold
state or Federal income tax as a result of the exercise of an Option, as a
condition to the exercise thereof, the Optionee may be required to make
arrangements satisfactory to the Company to enable it to satisfy such
withholding requirements. Payment of such withholding requirements may be made,
in the discretion of the Administrator, (i) in cash, (ii) by delivery of Shares
registered in the name of the Optionee having a Fair Market Value at the time of
exercise equal to the amount to be withheld, (iii) by the Company retaining or
not issuing such number of Shares subject to the Option as have a Fair Market
Value at the time of exercising equal to the amount to be withheld or (iv) any
combination of (i), (ii) and (iii) above.
(d) The Administrator shall be entitled as it deems appropriate to make
available for issuance under the Plan Shares tendered by an Optionee as payment
of the Option Price or Shares used to satisfy the Company's withholding
requirements.
6.8. Rights in the Event of Sale, Merger or Other Reorganization. Except
as expressly provided in Section 5.2 and this Section 6.8, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or Option Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets. In any
such event (other than a merger in which the Company is the surviving
corporation as described in Section 5.2(b) and under the terms of which the
shares of Common Stock outstanding immediately prior to the merger remain
outstanding and unchanged):
(a) Unless otherwise provided in the Stock Option Agreement for any given
Option, upon any such merger, consolidation, or sale or transfer of assets, all
rights of the Optionee with respect to the unexercised portion of any Option
shall become immediately vested and may be exercised immediately, except to the
extent that any agreement or undertaking of any party to any such merger,
consolidation, or sale or transfer of assets, shall make specific provision for
the assumption of the obligations of the Company with respect to the Plan and
the rights of Optionees with respect to Options granted thereunder.
(b) Unless otherwise provided in the Stock Option Agreement for any given
Option, upon any such liquidation or dissolution, all rights of the Optionee
with respect to the unexercised portion of any Option shall wholly and
completely terminate and all Options shall be canceled at the time of any such
liquidation or dissolution, except to the extent that any plan pursuant to which
such liquidation or dissolution is effected, shall make specific provision with
respect to the Plan and the rights of Optionees with respect to Options granted
thereunder.
Notwithstanding the foregoing, the holder of any such Option or right
theretofore granted and still outstanding shall have the right immediately prior
to the effective date of such merger, consolidation, sale or transfer of assets,
liquidation or dissolution to exercise such Option in whole or in part without
regard to any installment provision that may have been made part of the terms
and conditions of such Option or right; provided, that any conditions precedent
to such exercise set forth in the Stock Option Agreement other than the passage
of time, have occurred or been waived. In no event, however, may any Incentive
Stock Option which becomes exercisable pursuant to this Section 6.8 be
exercised, in whole or in part, later than the date preceding the tenth
anniversary date of the grant thereof.
6.9. Rights in the Event of Death. Unless otherwise provided in the Stock
Option Agreement for any given Option, if an Optionee's employment with the
Employer Company or service as a member of the Board is terminated on account of
death, the person or persons who shall have acquired the right, by will or the
laws of descent and distribution, to exercise the Optionee's Options shall
continue to have (subject to Sections 6.3 and 6.6 above) the right, for a period
of at least six (6) months from the date of termination by death or such longer
period (if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the Optionee's death or during the first year thereafter. At the expiration of
such period any such Options which remain unexercised shall expire. Unless the
Administrator provides otherwise in the Stock Option Agreement, any Options that
could not have been exercised by an Optionee as of the Optionee's death or
during the first year thereafter may not be exercised.
6.10. Rights in the Event of Total and Permanent Disability. Unless
otherwise provided in the Stock Option Agreement for any given Option, if an
Optionee's employment with the Employer Company or service as a member of the
Board is terminated on account of Total and Permanent Disability, the Optionee
shall have (subject to Sections 6.3 and 6.6 above) the right, for a period of at
least six (6) months from the date of termination by disability or such longer
period (if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the date of such Optionee's Total and Permanent Disability. At the expiration of
such period any such Options which remain unexercised shall expire. Unless the
Administrator provides otherwise in the Stock Option Agreement, any Options that
could not have been exercised by an Optionee on the date of such Optionee's
Total and Permanent Disability may not be exercised.
6.11. Rights in the Event of Termination of Employment or Service. Unless
otherwise provided in the Stock Option Agreement for any given Option, in the
event that an Optionee's employment with the Employer Company or service as a
member of the Board terminates, other than by reason of death or Total and
Permanent Disability and other than due to termination for "Cause," the Optionee
shall have (subject to Sections 6.3 and 6.6 above) the right, for a period of at
least ninety (90) days from the date of such termination or such longer period
(if any) as may be specified in the applicable Stock Option Agreement, to
exercise any Options which such Optionee would have been entitled to exercise on
the date of such Optionee's termination. At the expiration of such period any
such Options which remain unexercised shall expire. Unless the Administrator
provides otherwise in the Stock Option Agreement, any Options that could not
have been exercised by an Optionee on the date of such Optionee's termination of
employment or service as a member of the Board may not be exercised.
Notwithstanding the foregoing, if an Optionee's employment or service is
terminated for "Cause," the Company may notify the Optionee that any Options not
exercised prior to the termination are canceled, provided, however, that such
Optionee shall have fifteen (15) days to cure such termination for "Cause." For
purposes hereof and unless the Administrator provides otherwise in the Stock
Option Agreement, a termination of employment or service for "Cause" shall
include dismissal as a result of (1) Optionee's conviction of any crime or
offense involving money or other property of the Company or its subsidiaries or
which constitutes a felony in the jurisdiction involved; (2) Optionee's gross
negligence, gross incompetence or willful gross misconduct in the performance of
his or her duties; or (3) Optionee's willful failure or refusal to perform his
or her duties.
6.12. Automatic Option Grants to Outside Directors.
(a) First Option. Each person who becomes an Outside Director after August
2, 1999 shall be automatically granted an Option to purchase twenty thousand
(20,000) Shares (the "First Option") on the date on which such person first
becomes an Outside Director, whether through election by the stockholders of the
Company or appointment by the Board to fill a vacancy; provided, however, that
an Inside Director who ceases to be an Inside Director but who remains a member
of the Board shall not receive the grant of a First Option; provided further,
that if any person serving as an Outside Director on August 2, 1999 received
less that 20,000 shares (as adjusted for any stock splits or combinations
subsequent to the date of such grant) on the date such person became a member of
the Board, such person shall be granted an Option to purchase a number of Shares
equal to the difference between twenty thousand (20,000) Shares and the Shares
actually granted (as adjusted).
(b) Subsequent Option. Each Outside Director shall be automatically
granted an Option to purchase ten thousand (10,000) Shares (a "Subsequent
Option") on their annual anniversary date as a member of the Board of Directors.
(c) Terms of Options. The terms of First Options and Subsequent Options
granted hereunder shall be as follows:
(i) Term. The term of the Option shall be ten (10) years.
(ii) Exercise Price. The exercise price per Share shall be one
hundred percent (100%) of the Fair Market Value on the date of grant. In the
event that the date of grant is not a trading day, the exercise price per Share
shall be the Fair Market Value on the next trading day immediately following the
date of grant.
(iii) Vesting Schedule. Each grant of Shares subject to the Option
shall vest in its entirety and become exercisable on the first anniversary of
the grant date, subject to the Optionee remaining an Outside Director as of the
applicable vesting date.
(c) Stock Option Agreement. Each Option granted to Outside Directors shall
be evidenced by a Stock Option Agreement, which shall contain such other
provisions as may be applicable to such Options under this Plan.
6.13 Changes in Control of Company. In the event there occurs a Change in
Control of the Company (as hereafter defined) all of the Shares subject to the
Option shall vest and become exercisable upon the effective date of any such
Change in Control.
(a) Definition of "Change in Control." For purposes of the Plan,
"Change in Control" shall be defined as:
(i) When any "person" as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof (including a "group" as
defined in Section 13(d) of the Exchange Act, but excluding the Company, any
Subsidiary or any employee benefit plan sponsored or maintained by the Company
or any Subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act, as amended from time to time), of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities.
(ii) The individuals, who were members of the Board as of the first
date the Board was constituted of at least (5) five members (the "Incumbent
Board"), cease for any reason to constitute at least a majority of the Board;
provided however, that any individual becoming a director subsequent to the
Effective Date, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall not, for purposes of this section, be
counted in determining whether the Incumbent Board constitutes a majority of the
Board.
(iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business Combination:
A. all or substantially all of the individuals and entities
who were the beneficial owners of the then outstanding shares of common stock of
the Company and the beneficial owners of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than seventy percent (70%) of the
then outstanding shares of common stock and the combined voting power of the
then outstanding securities entitled to vote generally in the election of
directors, respectively, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or indirectly or through one or more
subsidiaries); and
B. no person (excluding any employee benefit plan or related
trust) of the Company or such corporation resulting from such Business
Combination beneficially owns, directly or indirectly, fifty percent (50%) or
more of the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the corporation
except to the extent that such ownership existed prior to the Business
Combination; or
SECTION 7
SHARES ISSUED PURSUANT TO AN OPTION
7.1. Issuance of Certificates. The Company shall not be required to
issue or deliver any certificate for
Shares purchased upon the exercise of any Option, or any portion thereof, prior
to fulfillment of all of the following applicable conditions:
(a) The admission of such Shares to listing on all stock exchanges or
markets on which the Shares are then listed to the extent such admission is
necessary;
(b) The completion of any registration or other qualification of such
Shares under any federal or state securities laws or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Board shall in its sole discretion deem necessary or
advisable, or the determination by the Board in its sole discretion that no such
registration or qualification is required;
(c) The obtaining of any approval or other clearance from any federal or
state governmental agency which the Board shall, in its sole discretion,
determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise of
the Option as the Board from time to time may establish for reasons of
administrative convenience.
7.2. Compliance with Securities and Other Laws. In no event shall the
Company be required to sell, issue or deliver Shares pursuant to Options if in
the opinion of the Company the issuance thereof would constitute a violation by
either the Optionee or the Company of any provision of any law or regulation of
any governmental authority or any securities exchange. As a condition of any
sale or issuance of Shares pursuant to Options, the Company may place legends on
the Shares, issue stop-transfer orders and require such agreements or
undertakings from the Optionee as the Company may deem necessary or advisable to
assure compliance with any such law or regulation, including if the Company or
its counsel deems it appropriate, representations from the Optionee that the
Optionee is acquiring the Shares solely for investment and not with a view to
distribution and that no distribution of the Shares acquired by the Optionee
will be made unless registered pursuant to applicable federal and state
securities laws or unless, in the opinion of counsel to the Company, such
registration is unnecessary.
7.3. Requirements in the Event of a Disposition of Shares. Any Optionee,
or person representing such Optionee, who sells, exchanges, transfers or
otherwise disposes of any Shares acquired pursuant to the exercise of an
Incentive Stock Option within two (2) years following the grant of such
Incentive Stock Option or within one (1) year following the actual transfer of
such Shares to the Optionee, shall be obligated to notify the Company in writing
of the date of disposition, the number of Shares so disposed and the amount of
consideration received as a result of such disposition. The Company shall have
the right to take whatever reasonable action it deems appropriate against an
Optionee, including early termination of any Options which remain outstanding,
in order to recover any additional taxes the Company incurs as a result of such
Optionee's failure to so notify the Company.
7.4. Legend. All certificates for Shares purchased upon the exercise of
an Incentive Stock Option shall bear a legend indicating that such Shares
were issued pursuant to an Incentive Stock Option grant.
SECTION 8
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
8.1. Board Termination, Amendment and Modification of Plan. The Board may
at any time amend or modify the Plan; provided, however, that no such action of
the Board, without approval of the stockholders of the Company (in the same
manner as provided in Section 9.8), may:
(a) Increase the number of Shares which may be issued under the Plan;
(b) Modify the requirements as to eligibility for participation in the
Plan;
(c) Change the Option Price provisions in Sections 1.(p) or 6.4 other than
to change the manner of determining the Fair Market Value of the Shares to
conform with any then applicable provisions of the Code or regulations or
rulings thereunder, unless such change does not have a materially adverse effect
on the Company; or
(d) Amend this Section 8.1 to defeat its purpose.
Notwithstanding anything above to contrary, the Board shall be entitled adjust
the Option Price with respect to any outstanding Option at any time provided
that the Optionee shall so consent.
8.2. Plan Termination. Subject to Section 9.8 below, unless terminated
earlier as provided in Section 8.1, the Plan shall terminate ten (10) years from
the date it is adopted by the Board and no Option shall be granted under this
Plan after such expiration date. Termination of the Plan shall not alter or
impair any of the rights or obligations under any Option theretofore granted
under the Plan unless the Optionee shall so consent.
8.3. Effect of Termination, Amendment or Modification of Plan.
Notwithstanding Sections 8.1 and 8.2, no termination, amendment or modification
of the Plan shall in any manner affect any Option theretofore granted under the
Plan without the written consent of the Optionee or a person who shall have
acquired the right to exercise the Option by will or the laws of descent and
distribution.
SECTION 9
MISCELLANEOUS
9.1. Non-assignability of Options. No Option shall be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee.
9.2. Leaves of Absence. Unless the Administrator determines otherwise,
the vesting of an Option granted under the Plan shall not be tolled during
any unpaid leave of absence taken by an Optionee.
9.3. No Employment Rights. Nothing in the Plan or in any Option granted
hereunder or in any Stock Option Agreement relating thereto shall confer upon
any individual the right to continue in the employ or service of the Employer
Company.
9.4. Purchase Offer. The Administrator may offer to purchase, for cash or
Shares, any Option granted hereunder and such offer to purchase any Option shall
be on such terms and conditions as the Administrator establishes and
communicates to the Optionee at the time the offer is extended to the Optionee.
9.5. Binding Effect. The Plan shall be binding upon the successors and
assigns of the Company.
9.6. Singular, Plural, Gender. Whenever used herein, except where the
context clearly indicates to the contrary, nouns in the singular shall
include the plural, and the masculine pronoun shall include the feminine
gender.
9.7. Headings. Headings of the Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
9.8. Effective Date; Ratification by Stockholders. This Plan shall become
effective upon its adoption by the Board but is subject to the ratification and
approval by the affirmative vote of the holders of a majority of the Company's
outstanding shares of capital stock within 12 months following such adoption. If
this Plan is not so approved by the stockholders this Plan shall become null and
void and of no force or effect. Any Options granted pursuant to the Plan may not
be exercised until the Plan shall have been ratified and approved by the
stockholders pursuant to this Section.
9.9. Rights as Stockholder. An Optionee or transferee of an Option shall
have no rights as a stockholder with respect to any Shares subject to such
Option prior to the purchase of such Shares by exercise of such Option as
provided herein.
9.10. Applicable Law. This Plan and the Options granted hereunder shall
be interpreted, administered and otherwise subject to the laws of the State
of New Jersey, without giving effect to the principles of conflict of laws
thereof.
9.11. Reports. The Company will comply with all applicable reporting
requirements applicable to Incentive Stock Options under the Code.
9.12. Information to Employees. All Optionees shall be provided with
financial statements of the Company
annually unless the Optionee is a key employee whose duties in connection with
the Company assure him or her access to equivalent information.