Exhibit 10.1
TIER TECHNOLOGIES, INC.
AMENDED AND RESTATED
1996 EQUITY INCENTIVE PLAN
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees of and Consultants to the Company and its Affiliates, and Outside
Directors may be given an opportunity to benefit from increases in value of the
stock of the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) restricted stock or
restricted stock units, all as defined below.
(b) The Company, by means of the Plan, seeks to retain the services
of persons who are now Employees of or Consultants to the Company or its
Affiliates, or Outside Directors, to secure and retain the services of new
Employees, Consultants and Outside Directors, and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options or (ii) stock bonuses, restricted
stock or restricted stock units granted pursuant to Section 7 hereof. All
Options shall be separately designated Incentive Stock Options or Nonstatutory
Stock Options at the time of grant, and in such form as issued pursuant to
Section 6, and a separate certificate or certificates will be issued for shares
purchased on exercise of each type of Option.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
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(d) "Committee" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan. In the absence of a Committee, the
term "Committee" means the Board.
(e) "Common Stock" means the authorized and unissued or reacquired
shares of the Company's Class B Common Stock.
(f) "Company" means Tier Technologies, Inc., a California
corporation.
(g) "Consultant" means any person, including an advisor, engaged by
the Company or an Affiliate to render services and who is compensated for such
services, provided that the term "Consultant" shall not include Outside
Directors.
(h) "Continuous Status as an Employee, Consultant or Outside
Director" means the employment or the relationship as a Consultant or Outside
Director is not interrupted or terminated. The Board, in its sole discretion,
may determine whether Continuous Status as an Employee, Consultant or Outside
Director shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company and its Affiliates
or their successors.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability, as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company, including a Director
employed by the Company. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means the value of the Common Stock of the
Company based on the closing price of the Common Stock on the Nasdaq National
Market, or other principal trading market of the Common Stock, on the day
preceding the date of grant.
(n) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an "executive officer" of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
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(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of
the Plan.
(s) "Optioned Stock" means the Common Stock of the Company subject to
an Option.
(t) "Optionee" means an Employee, Consultant or Outside Director who
holds an outstanding Option.
(u) "Outside Director" means a Director who is not an Employee.
(v) "Plan" means this 1996 Equity Incentive Plan, as amended.
(w) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect when discretion is being exercised with
respect to the Plan.
(x) "Stock Award" means any right granted under the Plan, including
any Option, any stock bonus, any restricted stock or any restricted stock unit.
(y) "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to
the terms and conditions of the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates the administration of the Plan to a Committee, as provided in
subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a stock bonus, restricted stock, restricted stock
unit, or any combination of the foregoing; the provisions of each Stock Award
granted (which need not be identical), including the time or times when a person
shall be permitted to receive stock pursuant to a Stock Award; and the number of
shares with respect to which Stock Awards shall be granted to each such person.
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(2) To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(3) To amend the Plan as provided in Section 13.
(4) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the Company.
(c) The Board may delegate administration of the Plan to a committee
composed solely of not fewer than two (2) Board members (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, all the powers possessed by the
Board (and references in this Plan to the Board shall thereafter be to the
Committee, except where the context indicates otherwise); subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan.
4. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of Section 12 relating to adjustments upon
changes in stock, the stock that may be sold or issued pursuant to Stock Awards
shall not exceed in the aggregate six million nine hundred and eighty-nine
thousand, three hundred and thirty-three (6,989,333) shares of the Company's
Common Stock, of which one hundred thousand (100,000) shares are reserved
exclusively for grant to Outside Directors. No more than 300,000 shares may be
granted to any one person pursuant to an Option or Options under the Plan in any
single fiscal year. If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not acquired under such Stock Award shall revert to and again become available
for issuance under the Plan. In the event of an Optionee's use of already-owned
shares of Common Stock in payment of the Option Price, or a portion of it, only
the net number of shares issued upon exercise of the Option shall be considered
issued under the Plan for the purposes of this Section 4.
5. ELIGIBILITY.
(a) General Rule. Incentive Stock Options may be granted only to
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Employees. Stock Awards other than Incentive Stock Options may be granted only
to Employees, including prospective employees, Consultants or Outside Directors.
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(b) Automatic Grants to Outside Directors. In addition to any
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discretionary grants of Stock Awards which may be granted to Outside Directors
from time to time, each Outside Director shall automatically be granted
Nonstatutory Stock Options as described in this Section 5(b). In addition,
subject to the Board's discretion, at the request of an Outside Director, such
Nonstatutory Stock Options may be granted instead to an entity wholly owned by
such Outside Director.
(i) Outside Directors. Any person who becomes an Outside Director
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shall automatically receive a Nonstatutory Stock Option for 10,000 shares of
Common Stock effective as of the date of their appointment or election to the
Board.
(ii) Subsequent Annual Grants. In addition to the grants described
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in subparagraph (i) above, each Outside Director who is re-elected to serve as
an Outside Director for an additional term shall automatically be granted a
Nonstatutory Option to purchase 10,000 shares of Common Stock as of the date of
such re-election.
(iii) Vesting. All Options granted pursuant to this Section
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5(b) shall be fully vested on the date of grant.
(iv) Exercise Price. The exercise price of all Nonstatutory Stock
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Options granted to Outside Directors under this Section 5(b) shall be at least
equal to one hundred percent (100%) of the Fair Market Value of the Common Stock
on the date of grant.
(c) No person shall be eligible for the grant of an Incentive Stock Option
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates, unless the exercise price of such Incentive Stock Option is at
least one hundred ten percent (110%) of the Fair Market Value of such stock at
the date of grant and the Incentive Stock Option is not exercisable after the
expiration of five (5) years from the date of grant.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate, subject to the provisions of
this Plan. The terms of separate Options need not be identical, but each Option
shall be subject to (through incorporation of provisions hereof by reference in
the Option Agreement or otherwise) the substance of each of the following
provisions:
(a) Term. No Option shall be exercisable after the expiration of ten (10)
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years from the date it was granted.
(b) Price. The exercise price of each Incentive Stock Option shall be not
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less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on
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the date the Option is granted. The exercise price of each Nonstatutory Stock
Option shall be determined in the discretion of the Board (with the exception of
the Nonstatutory Stock Options automatically granted to Outside Directors
pursuant to Section 5(b), which shall be granted at an exercise price of at
least one hundred percent (100%) of Fair Market Value of the stock subject to
the Option on the date the Option is granted).
(c) Consideration. The purchase price of stock acquired pursuant to
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an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii) at
the discretion of the Board or the Committee, exercised either at the time of
the grant or exercise of the Option, (A) by tendering (either actually or by
attestation) Common Stock valued using the Fair Market Value on the date of
exercise, (B) by authorizing a third party to sell Common Stock (or a sufficient
portion thereof) acquired upon exercise of the Option and to remit to the
Company a sufficient portion of the sales proceeds to pay for all the Common
Stock acquired through such exercise and any tax withholding obligations
resulting from such exercise, (C) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other Common Stock of the Company) with the person to whom
the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (D) in any other form of legal consideration that may be
acceptable to the Board. In the case of any deferred payment arrangement,
interest shall be payable at least annually and shall be charged at the minimum
rate of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.
(d) Transferability. Except as permitted by the Board in any
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particular Option Agreement, Options granted under the Plan shall not be
transferable by the holder other than by will or the laws of descent and
distribution and shall be exercisable during the holder's lifetime only by the
holder or the holder's guardian or legal representative.
(e) Vesting. The Option Agreement for each individual Option grant
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shall provide that the Option subject to such Option Agreement shall become
exercisable ("vest") at a rate to be determined by the Board at the time of
grant. The Board may also provide for the acceleration of vesting in certain
circumstances.
(f) Exercise Upon Termination. In the event an Optionee's Continuous
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Status as an Employee, Consultant or Outside Director terminates (other than
upon the Optionee's death or Disability), the Optionee may exercise his or her
Option to the extent that the Optionee is otherwise entitled to exercise on the
date employment terminates, but only within such period of time as is determined
by the Board and specified in the Option Agreement.
(g) Disability of Optionee. In the event an Optionee's Continuous
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Status as an Employee, Consultant or Outside Director terminates as a result of
the Optionee's Disability, the Optionee may exercise his or her Option to the
extent that the Optionee is otherwise entitled
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to exercise on the date employment terminates, but only within such period of
time as is determined by the Board and specified in the Option Agreement.
(h) Death of Optionee. In the event an Optionee's Continuous Status
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as an Employee terminates as result of his death, the Option may be exercised,
but only within such period of time as is determined by the Board and specified
in the Option Agreement, by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of death.
(i) Early Exercise. An Option Agreement may, but need not, include a
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provision whereby the Optionee may elect at any time while an Employee,
Consultant or Outside Director, to exercise the Option as to any part or all of
the shares subject to the Option prior to the full vesting of the Option.
(j) Repurchase of Shares Upon Termination. The Option may include a
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provision whereby shares purchased pursuant to the Option may be subject to a
right of repurchase in favor of the Company upon termination of a Participant's
Continuous Status as an Employee, Consultant or Outside Director.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus, restricted stock or restricted stock unit agreement
shall be in such form and shall contain such terms and conditions as the Board
or the Committee shall deem appropriate. The terms and conditions of stock
bonus, restricted stock or restricted stock unit agreements may change from time
to time, and the terms and conditions of separate agreements need not be
identical, but each stock bonus, restricted stock or restricted stock unit
agreement shall include (through incorporation of provisions hereof by reference
in the agreement or otherwise) the substance of each of the following provisions
as appropriate:
(a) Purchase Price. The purchase price, if any, under each restricted
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stock or restricted stock unit agreement shall be such amount as the Board or
Committee shall determine and designate in such agreement.
(b) Transferability. Except as determined by the Board of Directors
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in its discretion, no rights under a stock bonus, restricted stock or restricted
stock unit agreement shall be transferable except by will or by the laws of
descent and distribution.
(c) Consideration. The purchase price of stock acquired pursuant to a
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restricted stock or restricted stock unit agreement shall be paid either: (i) in
cash at the time of purchase; (ii) at the discretion of the Board or the
Committee, according to a deferred payment or other arrangement with the person
to whom the stock is sold; or (iii) in any other form of legal consideration
that may be acceptable to the Board or the Committee in their discretion.
Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan
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has been delegated may award stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.
(d) Vesting. Shares of stock sold or awarded as stock bonuses,
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restricted stock or restricted stock units under the Plan may, but need not, be
subject to a repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board or the Committee.
(e) Termination of Employment or Relationship as a Consultant. In the
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event a Participant's Continuous Status as an Employee, Consultant or Outside
Director terminates, the Company may repurchase or otherwise reacquire any or
all of the shares of Common Stock held by that person which have not vested as
of the date of termination under the terms of the stock bonus, restricted stock
or restricted stock unit agreement between the Company and such person.
8. CANCELLATION AND RE-GRANT OF OPTIONS.
The Board or the Committee shall have the authority to effect, at any
time and from time to time, with the consent of the affected holders of Options,
(i) the repricing of any outstanding Options under the Plan and/or (ii) the
cancellation of any outstanding Options under the Plan and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of shares of stock but having an exercise price per share of
not less than the Fair Market Value on the date of such repricing or new Option.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of Stock Awards; provided, however,
that this undertaking shall not require the Company to register under the
Securities Act either the Plan, any Stock Awards or any stock issued or issuable
pursuant to any such Stock Awards. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of Stock Awards unless and until
such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.
11. MISCELLANEOUS.
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(a) Neither an Optionee nor any person to whom an Option is
transferred under subsection 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
Option unless and until such person has satisfied all requirements for exercise
of the Option pursuant to its terms.
(b) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director, Consultant,
Optionee or other holder of Stock Awards any right to continue in the employ of
the Company or any Affiliate (or to continue acting as a Director or Consultant)
or shall affect the right of the Company or any Affiliate to terminate the
employment or relationship as a Director or Consultant of any Employee,
Director, Consultant, Optionee or other holder of Stock Awards with or without
cause.
(c) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options
granted after 1986 are exercisable for the first time by any Optionee during any
calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Nonstatutory Stock Options.
(d) The Company may require any recipient of a Stock Award, or any
person to whom a Stock Award is transferred under subsections 6(d) or 7(b), as a
condition of exercising any such Stock Award, (i) to give written assurances
satisfactory to the Company as to such person's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award, and (ii) to give written assurances satisfactory to
the Company stating that such person is acquiring the stock subject to the Stock
Award for such person's own account and not with any present intention of
selling or otherwise distributing the stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be inoperative if (a)
the issuance of the shares upon the exercise of or acquisition of stock under
the Stock Award has been registered under a then currently effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (b) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the stock.
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(e) To the extent provided by the terms of a Stock Award Agreement,
the person to whom a Stock Award is granted may satisfy any federal, state or
local tax withholding obligation relating to the exercise of or acquisition of
stock under a Stock Award by any of the following means or by a combination of
such means, subject to the approval of the Board: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares from the shares of Common Stock
otherwise issuable to the participant as a result of the exercise of or
acquisition of stock under the Stock Award; or (iii) delivering to the Company
owned and unencumbered shares of the Common Stock of the Company, subject to
certain requirements, as designated by Company counsel.
(f) The Company shall provide to all holders of Stock Awards a
financial statement of the Company at least annually, except to Employees whose
duties in connection with the Company assure them access to equivalent
information.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan or subject
to any Stock Award (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, reverse stock split, liquidating dividend, combination of shares,
reclassification, exchange of shares, change in corporate structure or
otherwise), the Plan and outstanding Stock Awards will be appropriately adjusted
in the class(es) and maximum number of shares subject to the Plan and the
class(es) and number of shares and price per share of stock subject to
outstanding Stock Awards.
(b) In the event of (1) dissolution or liquidation of the Company; (2)
a merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or (4) any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, then at the sole discretion of the Board and to the extent
permitted by applicable law: (i) any surviving corporation shall assume any
Stock Awards outstanding under the Plan or shall substitute similar Stock Awards
for those outstanding under the Plan, (ii) the time during which such Stock
Award may be exercised shall be accelerated and the Stock Awards terminated if
not exercised prior to such event, or (iii) such Stock Awards shall continue in
full force and effect.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
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(1) Increase the number of shares reserved for Stock Awards
under the Plan;
(2) Modify the requirements as to eligibility for participation
in the Plan (to the extent such modification requires
shareholder approval in order for the Plan to satisfy the
requirements of Sections 162(m) or 422 of the Code or the
requirements of the Nasdaq National Market or other
principal market for the Common Stock); or
(3) Modify the Plan in any other way if such modification
requires shareholder approval in order for the Plan to
satisfy the requirements of Sections 162(m) or 422 of the
Code, or the requirements of the Nasdaq National Market or
other principal market for the Common Stock, or to comply
with the requirements of Rule 16b-3.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(c) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on February 9, 2007. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Stock Award granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the Stock Award was
granted.
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