EXHIBIT 10.1
CUSTOMTRACKS CORPORATION
1990 STOCK OPTION PLAN
(Amended and Restated as of November 1998)
1. Purpose. The purpose of the Plan is to benefit the Company and its
Subsidiaries by offering certain present and future Employees a favorable
opportunity to acquire shares of Stock of the Company over a period of years,
thereby giving such Employees a permanent stake in the growth and prosperity of
the Company, encouraging such Employees to continue their services with the
Company and its Subsidiaries, and motivating such Employees to devote their best
efforts to the business and profitability of the Company and its Subsidiaries.
2. Definitions. As used herein, the following definitions shall apply:
(a) An "Acquiring Person" shall mean any Person (including any "person" as
such term is used in Sections 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) that, together with all Affiliates
and Associates of such Person, is the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of 10% or more of the outstanding Common
Stock. The term "Acquiring Person" shall not include the Company, any
subsidiary of the Company, any employee benefit plan of the Company or
subsidiary of the Company, any Person to the extent such Person is holding
Common Stock for or pursuant to the terms of any such plan, or Optionee or any
Affiliate or Associate of Optionee. For the purposes of this Plan, a Person who
becomes an Acquiring Person by acquiring beneficial ownership of 10% or more of
the Common Stock at any time after the date of this Agreement shall continue to
be an Acquiring Person whether or not such Person continues to be the beneficial
owner of 10% or more of the outstanding Common Stock.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act in effect on the date of this Agreement.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change of Control" shall mean the occurrence, with respect to an
Option held by Employees of a Subsidiary, at any time during the specified term
of such Option, of any of the following events:
(1) The Company is merged or consolidated or reorganized into or with
another Person and as a result of such merger, consolidation or
reorganization less than seventy-five percent (75%) of the
outstanding voting securities or other material capital interests
of the surviving, resulting or acquiring Person are owned in the
aggregate by Persons who were shareholders of the Company
immediately prior to such merger, consolidation or
reorganization;
(2) The Company sells all or substantially all of its business or
assets to any other Person, less than seventy-five percent (75%)
of the outstanding voting securities or other material capital
interests of which are owned in the aggregate by Persons who were
shareholders of the Company, directly or indirectly, immediately
prior to such sale; or
(3) Any Person (or group of Persons acting in concert), other than
the Company, becomes the beneficial owner, directly or
indirectly, of thirty-five percent (35%) or more of the issued
and outstanding shares of voting securities of the Company.
(e) "Change of Control" shall mean the occurrence, with respect to an
Option held by Employees of the Company, at any time during the specified term
of such Option, of any of the following events:
(1) (a) Any Sale of the Company or (b) any Sale of any Material
Subsidiary for consideration valued at $300 million or more; or
(2) Any Acquiring Person has become the beneficial owner of
securities which, when added to any securities already owned by
such person, would represent in the aggregate 25% or more of the
then-outstanding securities of the Company that are entitled to
vote to elect any class of directors;
(3) If at any time, the Continuing Directors then serving on the
Board of Directors of the Company cease for any reason to
constitute at least a majority thereof; or
(4) Any occurrence that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A or any successor
rule or regulation promulgated under the Exchange Act.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Company" shall mean CustomTracks Corporation, a Texas corporation.
(h) A "Continuing Director" shall mean a director of the Company who (i)
is not an Acquiring Person or an Affiliate or Associate thereof, or a
representative of an Acquiring Person or nominated for election by an Acquiring
Person, and (ii) was either a member of the Board of Directors of the Company on
the date of this Agreement or subsequently became a director of the Company and
whose initial election or initial nomination for election by the Company's
shareholders was approved by a majority of the Continuing Directors then on the
Board of Directors of the Company.
(i) "Date of Grant" shall mean, with respect to each Option granted by the
Plan Administrator pursuant to the Plan, the date specified in Section 1 of the
Option Agreement relating to such Option.
(j) "Director" shall mean any duly elected and qualified member of the
Board.
(k) "Disability" shall mean any medically determinable physical or mental
impairment that, in the opinion of the Plan Administrator, based upon medical
reports and other evidence satisfactory to the Plan Administrator, can
reasonably be expected to prevent an Employee from performing substantially all
of his customary duties of employment for a continuous period of not less than
twelve (12) months.
(l) "Employee" shall mean any salaried employee of the Company or any
Subsidiary, except a salaried employee who is serving as a Director.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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(n) "Fair Market Value" shall mean the closing price of the Stock as
quoted on NASDAQ/NMS on the last business day immediately preceding the date on
which the Option is granted or the date of exercise, as the case may be.
(o) A "Material Subsidiary" shall mean any majority-owned subsidiary of
the Company that is material to the business of the Company, taken as a whole,
and that is engaged in the digital data distribution business or other business
involving a concept primarily fostered by Mr. David P. Cook.
(p) "NASDAQ/NMS" shall mean the NASDAQ National Market System.
(q) "Option" shall mean any right to purchase Stock that has been granted
pursuant to the Plan.
(r) "Option Agreement" shall mean an agreement executed by an officer of
the Company and an Optionee evidencing the grant of an Option pursuant to the
Plan.
(s) "Optionee" shall mean any Employee who receives an Option or any
Person who acquires an Option by reason of the death of an Employee.
(t) A "Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, an incorporated organization, or a
government or political subdivision thereof and any other entity. A Person,
together with that Person's Affiliates and Associates, and any Persons acting as
a partnership, limited partnership, joint venture, association, syndicate, or
other group (whether or not formally organized), or otherwise acting jointly or
in concert or in a coordinated or consciously parallel manner (whether or not
pursuant to any express agreement), for the purpose of acquiring, holding,
voting, or disposing of securities of the Company with that Person, shall be
deemed a single "Person."
(u) "Plan" shall mean this CustomTracks Corporation 1990 Stock Option
Plan.
(v) "Plan Administrator" shall mean the Board or, in the alternative, any
committee of Directors authorized by the Board to administer the Plan.
(w) "Resignation" shall mean the voluntary termination by an Employee of
his or her employment relationship with the Company or its Subsidiaries under
circumstances other than voluntary Retirement.
(x) "Retirement" shall mean the termination of an Employee's employment in
accordance with the requirements of a written retirement plan, policy or rule of
the Company or its Subsidiaries which has been duly adopted by the Board.
(y) "Rule 16b-3" shall mean Rule 16b-3 of the rules and regulations under
the Exchange Act as it may be amended from time-to-time and any successor
provision to Rule 16b-3 under the Exchange Act.
(z) A "Sale" occurs with respect to the Company or a Material Subsidiary,
as applicable, if it engages in a merger, consolidation, recapitalization,
reorganization, or sale, lease, license, transfer, or other effective
disposition of all or substantially all of the Company's or Material
Subsidiary's assets and the Company or its shareholders or Affiliates
immediately before such transaction beneficially own, immediately after or as a
result of such transaction, equity securities of the surviving or acquiring
corporation or such corporation's parent corporation possessing less than fifty
one percent (51%) of the voting power of the surviving or acquiring Person or
such Person's parent corporation, provided that a
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Sale shall not be deemed to occur upon any public offering or series of such
offerings of securities of the Company or a Material Subsidiary that results in
any such change in beneficial ownership.
(aa) "Securities Act" shall mean the Securities Act of 1933, as amended.
(bb) "Stock" shall mean the $.01 par value Common Stock of the Company.
(cc) "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company in which each of the corporations (other
than the last corporation) in the unbroken chain owns shares of capital stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of capital stock of one of the other corporations in such chain at the
date of grant of an Option.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 9 hereof, the aggregate number of shares of Stock issuable
upon the exercise of Options granted pursuant to the Plan shall not exceed
345,045 shares. Such shares may either be authorized but unissued shares or
treasury shares.
The exercise price of each Option granted pursuant to the Plan shall be
determined by the Plan Administrator and, subject to the provisions of Section 9
hereof, shall be not less than the Fair Market Value, at the time the Option is
granted, of the shares of Stock subject to the Option.
Subject to the limitations provided above, if an Option should expire or
become unexercisable for any reason without having been exercised in full, the
unpurchased shares of Stock that were subject thereto shall, unless the Plan
shall have terminated, be available for the grant of other Options under the
Plan.
4. Administration of the Plan. The following provisions shall govern the
administration of the Plan:
(a) The Plan shall be administered by the Plan Administrator.
(b) The Plan Administrator is authorized (but only to the extent not
contrary to the express provisions of the Plan) to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan and to
the Options granted under the Plan, to determine the form and content of Options
to be issued under the Plan (including the exercise price, the exercise period
and the exercise increments of each such Option) and to make such other
determinations and exercise such other powers and authority as may be necessary
or advisable for the administration of the Plan. Each Option granted pursuant to
the Plan shall be evidenced by the Option Agreement in such form as may be
determined by the Plan administrator.
(c) A majority of the members of the Plan Administrator eligible to act
shall constitute a quorum for purposes of acting with respect to the Plan, and
the action of a majority of the members present who are eligible to act at any
meeting at which a quorum is present shall be deemed the action of the Plan
Administrator.
(d) All decisions, determinations and interpretations of the Plan
Administrator with respect to the Plan and Option Agreements executed pursuant
thereto shall be final and conclusive on all persons affected thereby.
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(e) Neither the Plan Administrator nor any member thereof shall be liable
for any act, omission, interpretation, construction or determination made in
connection with the Plan in good faith, and the members of the Plan
Administrator shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law. The members of the
Plan Administrator shall be named as insureds under any directors and officers
liability insurance coverage that may be in effect from time to time.
5. Eligibility. All Employees of' the Company and its Subsidiaries are
eligible to receive Options under the Plan. The Plan Administrator is authorized
to select from the Employees who are eligible to receive Options under the Plan
the particular Employees who will receive Options and to determine the number of
Options and the number of shares of Stock under each Option. In granting
Options, the Plan Administrator shall take into consideration the contribution
an Employee has made or may make to the success of the Company or its
Subsidiaries and such other factors as the Plan Administrator shall determine.
The Plan Administrator shall also have the authority to consult with and receive
recommendations from Directors and Employees of the Company and its Subsidiaries
with regard to these matters. In no event shall any Employee or his legal
representatives, heirs, legatees, distributees or successors have any right to
participate in the Plan except to such extent, if any, as the Plan Administrator
shall determine.
6. Term of the Plan. The Plan shall continue in effect until terminated
pursuant to Section 15; provided, however, that all Options granted pursuant to
the Plan must be granted within 10 years from the effective date of the Plan.
7. Termination of Employment - Exercise Thereafter. (a) For those
Optionees who are not subject to the provisions of Subsection 7(b), in the event
of termination of the Optionee's employment due to death, Retirement,
Resignation, Disability or termination by the Company for any reason other than
"cause" (such five events each being a "Qualified Termination"), the Option may
be exercised by the Optionee or his estate, personal representative or
beneficiary to the full extent that the Optionee was entitled to exercise the
same on the day immediately prior to such termination (i) at any time within the
one-year period commencing on the day next following such termination if such
termination is due to death of the Optionee; (ii) at any time within the thirty-
day period commencing on the day next following the effective date of such
termination if such termination is due to the Resignation of the Optionee; or
(iii) at any time within the six-month period commencing on the day next
following such termination in the case of any other Qualified Termination. In
the event that the Optionee's employment is terminated for any reason other than
a Qualified Termination, the Option shall automatically expire simultaneously
with such termination. For purposes of this Section, "cause" shall mean (x) the
failure, in the sole opinion of the Company or the Subsidiary which employs
Optionee, of Optionee to adequately perform the duties assigned to Optionee
(other than any such failure resulting from Optionee's Disability); (y) the
engagement by Optionee in misconduct which, in the sole opinion of the Company
or the Subsidiary which employs Optionee, is or may have the effect of being
materially injurious to the Company or its Subsidiaries; or (z) the conviction
of Optionee of any felony or crime of moral turpitude.
(b) For those Optionees who are senior officers of the Company, in the
event of termination of the Optionee's employment due to death, Retirement,
Resignation, Disability or termination by the Company for any reason other than
"cause" (such five events each being a "Qualified Termination"), the Option may
be exercised by the Optionee or his estate, personal representative or
beneficiary to the full extent that the Optionee was entitled to exercise the
same on the day immediately prior to such termination (i) at any time within the
18 month period commencing on the day next following such termination if such
termination is due to death of the Optionee; (ii) at any time within the thirty-
day period commencing on the day next following the effective date of such
termination if such termination is due to the Resignation of the Optionee; or
(iii) at any time within the 18 month period commencing on the
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day next following such termination in the case of any other Qualified
Termination. In the event that the Optionee's employment is terminated for any
reason other than a Qualified Termination, the Option shall automatically expire
simultaneously with such termination. For purpose of this Section, "cause" shall
have the meaning given such term in the applicable severance agreement between
the Company and Optionee. If the officer and the Company are not parties to a
severance agreement that defines "cause", then "cause" shall mean (x) the
failure, in the sole opinion of the Company or the Subsidiary which employs
Optionee, of Optionee to adequately perform the duties assigned to Optionee
(other than any such failure resulting from Optionee's Disability); (y) the
engagement by Optionee in misconduct which, in the sole opinion of the Company
or the Subsidiary which employs Optionee, is or may have the effect of being
materially injurious to the Company or its Subsidiaries; or (z) the conviction
of Optionee of any felony or crime of moral turpitude.
(c) The determination as to whether the Optionee is subject to the
provisions of Subsection 7(a) or 7(b) will be determined in the sole opinion of
the Company.
8. Transferability. An Option granted pursuant to the Plan shall not be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution, and the Option shall be exercisable, during the Optionee's
lifetime, only by Optionee or Optionee's legal representative or guardian. More
particularly (but without limiting the generality of the foregoing), an Option
may not be assigned, transferred (except as aforesaid), pledged or hypothecated
in any way (whether by operation of law or otherwise), and shall not be subject
to execution, attachment or similar process, without the prior written consent
of the Company. Any attempted assignment, contrary to the provisions hereof,
and the levy of any attachment or similar process upon the Option, which would
otherwise affect a change in the ownership of the Option, shall terminate the
Option.
9. Adjustment. The number of shares subject to the Plan and to Options
granted pursuant to the Plan shall be adjusted as follows: (a) in the event that
the outstanding Stock is changed by reason of a stock dividend, stock split,
recapitalization or combination of shares, the number of shares of Stock subject
to the Plan and to Options granted pursuant to the Plan shall be proportionately
adjusted; or (b) in the event of any merger, consolidation or reorganization of
the Company with any other corporation or corporations, there shall be
substituted for each share of Stock then subject to the Plan and to Options
granted pursuant to the Plan the number and kind of shares of stock or other
securities to which the holders of shares of Stock will be entitled pursuant to
the transaction. In the event of any such adjustment, the purchase price per
share shall be proportionately adjusted.
10. Change of Control. Any Option previously granted under the Plan to an
Optionee who is an Employee on the date of a Change in Control shall become
exercisable in full on such date and, except in the case of a termination of
employment for cause in conjunction with or following the Change of Control, may
be exercised by the Optionee at any time during the remainder of the term of the
Option, without regard to any exercise increments established pursuant to any
applicable Option Agreement. In the case of a termination of employment for
cause in conjunction with or following a Change of Control, the Option may be
exercised by the Optionee at any time within a period of not less than six
months nor more than three (3) years (the length of which period shall be within
the discretion of the Plan Administrator and shall be evidenced conclusively by
the giving of appropriate and timely notice to the Optionee in accordance with
the terms of the applicable Option Agreement) after the date of such
termination.
11. Exercise of Option. An Option may be exercised by giving written
notice to the Company, attention of the Treasurer. The notice shall (i) state
the election to exercise the Option and the number of shares in respect of which
it is being exercised; (ii) be signed by the Optionee; and (iii) be accompanied
by the representation and covenant required under Section 12 hereof and any
other written
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representations, covenants, and undertakings that the Company may prescribe to
satisfy securities laws and regulations or other requirements. In addition, the
notice shall be accompanied by (a) cash in an amount equal to the full purchase
price of the shares to be purchased, a certified or bank cashier's check payable
to the order of the Company in an amount equal to the full purchase price of the
shares to be purchased, shares of Stock or a combination of these methods of
payment; or (b) if the shares to be purchased are covered by an effective
registration statement under the Securities Act, a written statement signed by
the Optionee that the exercise is a "cashless exercise" through a brokerage firm
in accordance with Section 220.3(e)(4) of Regulation T issued by the Board of
Governors of the Federal Reserve System ("Reg T") pursuant to the Exchange Act,
in which latter event the Company will use its best efforts to comply with the
requirements of Reg T. In the event that shares of Stock are used as a method of
payment, the per share value of Stock shall be the Fair Market Value on the date
of exercise. The certificate or certificates for the shares as to which the
Option shall have been so exercised shall be registered in the name of the
Optionee or his designee and shall be delivered to or upon the written order of
the Optionee. If applicable, the Company shall be entitled to place the
following legend (or a legend which is substantially similar to the following
legend) upon, and to issue appropriate stop transfer instructions with respect
to, the certificate or certificates representing the shares issued upon exercise
of the Option:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS (THE "STATE LAWS"), AND SUCH SHARES MAY
NOT BE TRANSFERRED UNLESS (A) A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND APPLICABLE STATE LAWS COVERING SUCH TRANSFER IS THEN IN EFFECT; OR
(B) AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER, HAS BEEN FURNISHED
STATING THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND APPLICABLE STATE LAWS."
All shares of Stock issued as provided herein shall be duly and validly issued,
fully paid and non-assessable.
12. Securities Law Restrictions. The Company shall not be obligated to
issue any shares purchased upon exercise of an Option until, in the opinion of
the Company and its counsel, such issuance will not involve any violation of
applicable federal and state securities laws, the rules and regulations
promulgated thereunder and the requirements of any stock exchange upon which the
Stock may then be listed. Acceptance of an Option by an Optionee shall
constitute the Optionee's agreement that any shares of Stock purchased upon the
exercise of the Option shall be acquired for the Optionee's own account and not
with a view to distribution and that each notice of the exercise of any portion
of the Option shall be accompanied by a written representation and covenant
signed by the Optionee, in such form as may be specified by the Company,
confirming such agreement and containing such other provisions as may be
prescribed by the Company. The Company may, at its election, release an Optionee
from the Optionee's agreement to take for the Optionee's own account and not
with a view to distribution of the shares of Stock purchased upon exercise of
the Option, if in the opinion of the Company such covenant ceases to be
necessary for compliance with the applicable federal and state securities laws
(including the rules and regulations promulgated thereunder) and the
requirements of any stock exchange upon which the Stock may be then listed.
13. Listing or Registration of Stock. Each Option granted pursuant to the
Plan is subject to the requirement that, if at any time the Board shall
determine, in its discretion, that the listing, registration or qualification of
the shares of Stock subject to the Option upon any securities exchange or
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under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting or exercise of the Option or the issue or purchase of shares
under the Option, the Option may not be exercised in whole or in part until such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board. The
Company shall be under no obligation to effect or obtain any such listing,
registration, qualification, consent or approval if the Board shall determine,
in its discretion, that such action would not be in the best interests of the
Company. The Company shall not be liable for damages due to a delay in the
delivery or issuance of any stock certificates for any reason whatsoever,
including, but not limited to, a delay caused by listing, registration or
qualification of the shares of Stock subject to an Option upon any securities
exchange or under any federal or state law or the effecting or obtaining of any
consent or approval of any governmental body with respect to the granting or
exercise of the Option or the issue or purchase of shares under the Option.
14. Modification of Options. At any time and from time to time the Plan
Administrator may execute an instrument providing for modification, extension,
or renewal of any outstanding Option, provided that no such modification,
extension or renewal shall (i) impair the Option in any respect without the
consent of the holder of the Option or (ii) conflict with the provisions of Rule
16b-3.
15. Amendment and Termination of the Plan. The Board may alter, suspend or
discontinue the Plan, except that no action of the Board may increase the
benefits accruing to Employees under the Plan, increase (other than as provided
in Section 9) the maximum number of shares permitted to be issued upon the
exercise of Options granted pursuant to the Plan or materially modify the
requirements as to eligibility for participation in the Plan unless such action
of the Board shall be subject to approval by the shareholders of the Company.
16. Shareholder Rights. The holder of an Option shall have none of the
rights of a shareholder with respect to the shares of Stock subject to the
Option until such shares shall have been issued to him upon the due exercise of
the Option.
17. Withholding of Taxes. The Plan Administrator may make such provisions
and take such -steps as it may deem necessary or appropriate for the withholding
of any taxes which the Company or any Subsidiary is required by any law or
regulation of any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Option, including, but
not limited to, the withholding of the issuance of all or any portion of the
shares of Stock subject to the Option until the Optionee reimburses the Company
or the applicable Subsidiary for the amount the Company or the applicable
Subsidiary is required to withhold with respect to such taxes, canceling any
portion of the issuance in an amount sufficient to reimburse the Company or the
applicable Subsidiary for the amount it is required to so withhold, or taking
any other action reasonably required to satisfy the withholding obligation of
the Company or the applicable Subsidiary.
18. Restrictions on Stock. The Plan Administrator may impose such
restrictions on the ownership and transfer of shares of Stock issued upon
exercise of Options granted pursuant to the Plan as it deems desirable and any
such restrictions shall be set forth in the Option Agreement evidencing the
Options; provided, however, that any such restrictions shall not be materially
more burdensome than the restrictions imposed upon the other outstanding,
unregistered shares of Stock.
19. Reservation of Stock. The Company during the term of the Plan will
reserve and keep available such number of shares of Stock as shall be sufficient
to satisfy the requirements of the Plan.
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20. Continued Employment Not Presumed. Nothing in the Plan or any
document describing it nor the grant of an Option shall give an Optionee the
right to continue in employment with the Company or any of its Subsidiaries or
affect the right of the Company or a Subsidiary to terminate the employment of
any Optionee with or without cause.
AMENDED AND RESTATED as of November 18, 1998. The new provisions
incorporated in this Plan by virtue of this amendment and restatement shall
apply to Options outstanding on the date hereof, as well as Options hereinafter
granted under this Plan.
CUSTOMTRACKS CORPORATION
By: /s/ Ronald A. Woessner
-----------------------------
Ronald A. Woessner
Secretary
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