EXHIBIT 10.6
CREDIT TECHNOLOGIES, INC.
1990 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
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1990 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
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TABLE OF CONTENTS
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1. Purpose of the Plan..................................................... 1
2. Administration.......................................................... 1
3. Option Shares........................................................... 1
4. Authority to Grant Option............................................... 1
5. Limitation on Amount of Options Which may be Granted.................... 1
6. Eligibility............................................................. 2
7. Option Price............................................................ 2
8. Duration of Options..................................................... 2
9. Amount Exercisable; Right of First Refusal.............................. 2
10. Exercise of Options.................................................... 3
11. Transferability of Options............................................. 3
12. Termination of Employment or Services or
Death of Optionee...................................................... 3
a. Temporary Leave...................................................
b. Death or Disability...............................................
c. Retirement........................................................
13. Employment Relationship; Consultant Relationship....................... 4
14. Requirements of Law.................................................... 4
15. No Rights as Stockholder............................................... 4
16. Employment Obligation.................................................. 4
17. Changes in the Company's Capital Structure............................. 5
a. Rights of the Company..............................................
b. Recapitalization, Etc..............................................
c. Merger-no Change of Control........................................
d. Sale of the Company................................................
e. No Adjustment or Changes...........................................
18. Amendment or Termination of Plan....................................... 6
19. Written Agreement...................................................... 6
20. Effective Date and Duration of Plan.................................... 6
21. Lockup Agreement....................................................... 6
CREDIT TECHNOLOGIES, INC.
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1990 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
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1. Purpose of the Plan. This l990 Incentive and Nonqualified Stock Option Plan
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(the "Plan") of Credit Technologies, Inc., a Delaware corporation (the
"Company"), is designed to provide additional incentive to present and future
executives, key employees and consultants of the Company (which shall include
its subsidiaries as defined in Section 425 of the Internal Revenue Code of 1986,
(the "Code"). The Company intends that this purpose will be effected by the
granting of incentive stock options ("Incentive Stock Options") as defined in
Section 422(b) of the Code and nonqualified stock options ("Nonqualified
Options") under the Plan which afford such executives, key employees and
consultants an opportunity to acquire or increase their proprietary interest in
the Company through the acquisition of shares of its Common Stock. By
encouraging stock ownership by such executives, salaried employees and
consultants, the Company seeks to attract and retain on a continuing basis the
services of persons of exceptional competence and seeks to furnish an added
incentive for them to increase their efforts on behalf of the Company.
2. Administration. The Plan shall be administered by the Board of Directors.
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All questions of interpretation and application of the Plan, of Incentive Stock
Options and Nonqualified Options granted hereunder (collectively, the "Options",
and individually, an "Option"), and of the value of shares of Common Stock
subject to an Option, shall be subject to the determination of the Board of
Directors, which determination shall be final and binding.
3. Option Shares. The stock subject to the Options and other provisions of the
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Plan shall be shares of the Company's Common Stock, $ 0.01 par value (the
"Common Stock"). The total amount of the Common Stock with respect to which
Options may be granted shall not exceed in the aggregate 1,200,000 shares;
provided, however, that the class and aggregate number of shares which may be
subject to Options granted hereunder shall be subject to adjustment in
accordance with the provisions of Paragraph 16 hereof. Such shares may be
treasury shares or authorized but unissued shares.
In the event that any outstanding Option for any reason shall expire or
terminate prior to exercise, the shares of Common Stock allocable to the
unexercised portion of such Option may again be subject to an Option under the
Plan.
4. Authority to Grant Options. The Board of Directors may grant Options from
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time to time to such eligible employees and consultants of the Company as it
shall determine. Subject to any applicable limitations set forth in the Plan
or established from time to time by the Board of Directors, the number of shares
of Common Stock to be covered by any Option shall be as determined by the Board
of Directors.
5. Limitation on Amount of Options Which may be Granted. The aggregate fair
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market value (determined as of the date of grant of the Option) of the shares of
Common Stock as to which any Incentive Stock Option granted under the Plan shall
first become exercisable (i.e., shall "vest") in any calendar year shall not
exceed $100,000. To the extent that the shares of Common Stock as to which any
Option granted under the Plan shall vest in any calendar year shall have a fair
market value (determined as of the date of grant of the Option) in excess of
$100,000, such Option shall be deemed to be a Nonqualified Option with respect
to such excess.
6. Eligibility. Incentive Options may be granted only to officers and
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other employees of the Company or its Subsidiaries, including members of the
Board who are also employees of the Company or a Subsidiary. Non-Statutory
Options may be granted to officers or other employees of the Company or its
Subsidiaries, to members of the Board or the board of directors of any
Subsidiary whether or not employees of the Company or such Subsidiary, and to
certain other individuals providing services to the Company or its Subsidiaries.
No Incentive Stock Option shall be granted to an individual who, at the time
said Option is granted, owns (including ownership attributed pursuant to Section
425 of the Code) more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any subsidiary or parent (a "greater-
than-ten-percent-stockholder"); notwithstanding the above, a greater-than-ten-
percent-stockholder may be granted an Incentive Stock Option provided that the
purchase price per share shall not be less than one hundred and ten percent
(110%) of the fair market value of the stock at the time such Option is
granted, and further provided that no such Option shall be exercisable to any
extent after the expiration of five (5) years from the date it is granted.
Except as otherwise provided, for all purposes of the Plan the term
"subsidiary corporation" shall mean any corporation of which 50% or more of its
outstanding voting stock is at the time owned by the Company or by one or more
subsidiaries or by the Company and one or more subsidiaries.
7. Option Price. The price at which shares may be purchased pursuant to
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Options shall be specified by the Board of Directors at the time the Option is
granted; provided, however, that the option price of any Incentive Stock Option
shall not be less than one hundred percent (100%) (one hundred and ten percent
(110%) in the case of a greater-than-ten percent-stockholder) of the fair market
value of the shares of Common Stock on the date such Option is granted, such
fair market value to be determined in accordance with procedures to be
established by the Board of Directors.
8. Duration of Options. The Board of Directors in its discretion may provide
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that an Option shall be exercisable during any specified period of time from the
date such Option is granted; provided, however, that no Incentive Stock Option
shall be exercisable after the expiration of ten (10) years (five years in the
case of a greater-than ten percent stockholder) from the date such Option is
granted.
9. Amount Exercisable; Right of First Refusal. Each Option may be exercised,
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so long as it is valid and outstanding, from time to time in part or as a whole,
subject to any limitations with respect to the number of shares for which the
Option may be exercised at a particular time and to such other conditions as the
Board of Directors in its discretion may specify upon granting the Option.
The Board of Directors may also, or alternatively, specify upon granting an
Option that prior to the effective date of a registration statement under the
Securities Act of 1933 covering any shares of Common Stock, all or a portion of
the shares purchasable upon exercise of such Option shall be subject to a right
of first refusal in favor of the Company in the event that the optionee wishes
to sell, assign, transfer, exchange, encumber or otherwise dispose of any of
such shares issued pursuant to exercise of such Option or any interest in such
shares. If such restriction is imposed, the Option shall contain appropriate
provisions, and the shares issued upon exercise shall bear an appropriate
legend, disclosing the Company's right of first refusal.
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10. Exercise of Options. Subject to the provisions of Paragraph 14 hereof,
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Options shall be exercised by the delivery of written notice to the Company
setting forth the number of shares with respect to which the Option is to be
exercised, together with (a) cash, certified check, bank draft or postal or
express money order payable to the order of the Company for an amount equal to
the option price of such shares, or (b) with the consent of the Company, shares
of Common Stock of the Company having a fair market value equal to the option
price of such shares, or (c) with the consent of the Company, a combination of
(a) and (b), and specifying the address to which the certificates for such
shares are to be mailed. For the purpose of the preceding sentence, the fair
market value of the shares of Common Stock so delivered to the Company shall be
determined in accordance with procedures adopted by the Board of Directors. As
promptly as practicable after receipt of such written notification and payment,
the Company shall deliver to the optionee certificates for the number of shares
with respect to which such Option has been so exercised, issued in the
optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to the
optionee, at the address specified pursuant to this Paragraph 10.
11. Transferability of Options. Options shall not be transferable by the
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Optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by him.
12. Termination of Employment or Services or Death of Optionee. Except as may
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be otherwise expressly provided herein, Options may not be exercised after the
earlier of:
(i) the date of expiration thereof; or
(ii) the date of termination of the optionee's employment with or services
to the Company if the termination is by the Company for cause (as determined by
the Company), or if voluntarily by the optionee; or
(iii) Thirty (30) days after termination of the optionee's employment with or
services to the Company be it without cause.
(a) Temporary Leave. Whether authorized temporary leave of absence,
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or absence on military or government service, shall constitute termination of
the employment or consultant relationship between the Company and the optionee
shall be determined by the Board of Directors at the time thereof.
(b) Death or Disability. In the event the Optionee's employment
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with or service to the Company is terminated while the optionee is an employee
or consultant in good standing for reasons of permanent disability under the
then established rules of the Company or in the event of the death and before
the date of expiration of such Option, such Option may be exercised until the
earlier of such date of expiration or one (1) year following the date of such
termination for reason of permanent disability or death. Should such termination
for reason of permanent disability or death occur after the first anniversary of
the date at which the optionee was first employed or otherwise began to serve
the Company, the Option may be exercised for up to the greater of (i) 50% of all
Option shares (and such shares shall be deemed vested) or (ii) the number of
shares that had vested as of the date of such death or such retirement. After
the death of the Optionee, his executors, administrators or any person or
persons to whom his Option may be transferred by will
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or by the laws of descent and distribution, shall have the right to exercise the
Option.
(c) Retirement. If, before the date of expiration of the Option, the
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optionee as an employee shall be retired in good standing from the employ of the
Company for reasons of age under the then established rules of the Company, the
Option may be exercised until the earlier of such date of expiration or thirty
(30) days after the date of such retirement, to the extent to which the optionee
was entitled to exercise such Option immediately prior to such retirement.
13. Employment Relationship; Consultant Relationship. An employment relationship
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between the Company and the optionee shall be deemed to exist during any period
in which the optionee is employed by the Company. A consultant relationship
between the Company and the optionee shall be deemed to exist during any period
in which the optionee renders services as a consultant or otherwise on an
independent contractor basis to the Company.
14. Requirements of Law.
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The Company shall not be required to sell or issue any shares under any
Option if the issuance of such shares shall constitute a violation by the
optionee or by the Company of any provision of any law, regulation or order of
any governmental authority. Without limiting the generality of the foregoing,
upon exercise of any Option, the Company shall not be required to issue such
shares unless the Board of Directors has received evidence satisfactory to it to
the effect that the holder of such Option will not transfer such shares except
pursuant to a registration statement in effect under the Securities Act of 1933,
as now in effect or hereafter amended (the "Act"), and under the applicable
securities laws of any State, unless the Company has received an opinion of
counsel satisfactory to the Company, in form and substance satisfactory to the
Company, to the effect that such registration is not required. Any determination
in this connection by the Board of Directors shall be final, binding and
conclusive. In the event the shares issuable on exercise of an Option are not
registered under the Act, the Company may imprint the following legend or any
other legend which counsel for the Company considers necessary or advisable to
comply with the Act or other applicable laws:
"The shares of stock represented by this certificate have
not been registered under the Securities Act of 1933 or
under the securities laws of any State and may not be sold
or transferred except upon such registration or upon receipt
by the Corporation of an opinion of counsel satisfactory to
the Corporation, in form and substance satisfactory to the
Corporation, that registration is not required for such sale
or transfer."
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act; and in the event any shares are
so registered the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an Option or the issuance of shares
pursuant thereto to comply with any other law, regulation or order of any
governmental authority.
15. No Rights as Stockholder. No optionee shall have rights as a stockholder
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with respect to shares covered by his Option until the date of issuance of a
stock certificate for such shares; and, except as otherwise provided in
Paragraph 16 hereof, no adjustment for dividends, or otherwise,
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shall be made if the record date therefor is prior to the date of issuance of
such certificate.
16. Employment Obligation. The granting of any Option shall not impose upon
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the Company any obligation to employ or continue to employ, or to retain or to
continue to retain the services of, any optionee; and the right of the Company
to terminate the employment or services of any officer or other employee or
consultant shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
17. Changes in the Company's Capital Structure.
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(a) Rights of the Company. The existence of outstanding Options
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shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
(b) Recapitalization, Stock Splits, and Dividends. If the Company
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shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, or other increase or reduction of
the number of shares of the Common Stock outstanding, without receiving
compensation therefor in money, services or property, then (i) the number,
class, and per share price of shares of stock subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received as a result of the event requiring the adjustment had he exercised his
Option in full immediately prior to such event; and (ii) the number and class of
shares with respect to which Options may be granted under the Plan shall be
adjusted by substituting for the total number of shares of Common Stock then
reserved that number and class of shares of stock that would have been received
by the owner of an equal number of outstanding shares of Common Stock as the
result of the event requiring the adjustment.
(c) Merger of Company With No Change of Control. After a merger of
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one or more corporations into the Company, or after a consolidation of the
Company with one or more corporations in which (i) the Company shall be the
surviving corporation and (ii) the stockholders of the Company prior to such
merger or consolidation hold at least fifty percent (50%) of the voting shares
of the Company after such merger or consolidation, each holder of an outstanding
Option shall, at no additional cost, be entitled upon exercise of such Option to
receive (subject to any required action by stockholders) in lieu of the number
of shares as to which such Option shall then be so exercisable, the number and
class of shares of stock or other securities to which such holder would have
been entitled pursuant to the terms of the agreement of merger or consolidation
if, immediately prior to such merger or consolidation, such holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares as to which such Option shall be so exercised.
(d) Sale or Merger of Company Where Company Does Not Survive. If the
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Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if there is
a merger or consolidation where the Company is the
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surviving corporation and the Stockholders of the Company prior to such merger
or consolidation do not hold at least fifty percent (50%) of the voting shares
of the Company after such merger or consolidation occurs, or if the Company is
liquidated, or sells or otherwise disposes of substantially all its assets to
another corporation while unexercised Options remain outstanding under the Plan,
(i) subject to the provisions of clause (iii) below, after the effective date of
such merger, consolidation or sale, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to receive,
in lieu of shares of Common Stock, shares of such stock or other securities,
cash or property as the holders of shares of Common Stock received pursuant to
the terms of the merger, consolidation or sale; (ii) the Board of Directors may
accelerate the time for exercise of all unexercised and unexpired Options to and
after a date prior to the effective date of such merger, consolidation,
liquidation or sale, as the case may be, specified by the Board; or (iii) all
outstanding Options may be cancelled by the Board of Directors as of the
effective date of any such merger, consolidation, liquidation or sale provided
that (x) notice of such cancellation shall be given to each holder of an Option
and (y) each holder of an Option shall have the right to exercise such Option to
the extent that the same is then exercisable or, if the Directors shall have
accelerated the time for exercise of all unexercised and unexpired Options, in
full during the 30-day period preceding the effective date of such merger,
consolidation, liquidation, sale or acquisition.
(e) Changes to Common Stock Subject to Options. Except as
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hereinbefore expressly provided, the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock then subject to
outstanding Options.
18. Amendment or Termination of Plan. The Board of Directors may modify,
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revise or terminate this Plan at any time and from time to time, except that the
class of employees and consultants eligible to receive Options and the aggregate
number of shares issuable pursuant to this Plan shall not be changed or
increased, other than by operation of Paragraph 16 hereof, without the consent
of the stockholders of the Company; provided, however, that no amendment shall
modify (within the meaning of Section 425(h) of the Code) any Incentive Stock
Option outstanding on the date of such amendment.
19. Written Agreement. Each Option granted hereunder shall be embodied in a
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written option agreement which shall be subject to the terms and conditions
prescribed above and shall be signed by the President, any Vice President or the
Treasurer of the Company for and in the name and on behalf of the Company. Such
an option agreement shall contain such other provisions as the Board of
Directors in its discretion shall deem advisable.
20. Effective Date and Duration of Plan. The Plan shall become effective upon
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its adoption by the Board of Directors, provided that the stockholders of the
Company shall have approved the Plan within twelve (12) months prior to or
following the adoption of the Plan by the Board of Directors. Options may not
be granted under the Plan more than ten (10) years after said effective date.
The Plan shall terminate (i) when the total amount of the Common Stock with
respect to which Options may be granted shall have been issued upon the exercise
of Options or (ii) by action of the Board of Directors pursuant to Paragraph 17
hereof, whichever shall first occur.
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21. "Lockup" Agreement. The Board of Directors may in its discretion specify
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upon granting an Option that the Optionee shall agree for a period of time (not
to exceed 180 days) from the effective date of any registration of securities of
the Company (upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities), not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such Option, without the prior written
consent of the Company or such underwriters, as the case may be.
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