Exhibit 10.17
1999 NONQUALIFIED STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
OF
LOISLAW.COM, INC.
Section 1. Purpose. It is the purpose of the Plan to promote the
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interests of Loislaw.com, Inc., a Delaware corporation (the "Company"), and its
stockholders by attracting and retaining qualified Nonemployee Directors by
giving them the opportunity to acquire a proprietary interest in the Company and
an increased personal interest in its continued success and progress. The
Options granted under the Plan shall not be qualified as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
Section 2. Definitions. As used herein the following terms have the
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following meanings:
(a) "Affiliate" means any parent or subsidiary corporation of the
Company within the meaning of Rule 12b-2 under the Securities Exchange Act
of 1934, as amended; provided, however, that an entity shall not be deemed
a parent of the Company unless such entity owns at least 50% of the
outstanding voting securities of the Company.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Nonemployee Directors Stock Option
Committee described in Section 4 hereof.
(d) "Common Stock" means the Common Stock, par value $0.01 per
share, of the Company.
(e) "Fair Market Value" means, unless the Committee determines
otherwise in good faith, the closing sale price of the Common Stock on the
last market trading day preceding the date in question as reported on the
Nasdaq National Market or any national stock exchange or other stock market
on which the Common Stock is then traded, or if the Common Stock is not
listed or admitted to trading on the Nasdaq National Market or any national
stock exchange but is quoted as an over-the-counter security on Nasdaq or
any similar system then in use, "Fair Market Value" shall mean the average
of the closing high bid and low asked quotations on such system for the
Common Stock on the last market trading day preceding the date in question.
(f) "Nonemployee Director" means an individual who (i) is now, or
hereafter becomes, a member of the Board of Directors of the Company, and
(ii) is neither an employee nor an officer of the Company or of an
Affiliate of the Company. For purposes
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of this Plan, "employee" shall mean an individual whose wages are subject
to the withholding of federal income tax under Section 3401 of the Code,
and "officer" shall mean an individual elected or appointed by the Board of
Directors or chosen in such other manner as may be prescribed in the Bylaws
of the Company or an Affiliate to serve as such.
(g) "Option" means any option to purchase shares of Common Stock
granted pursuant to the provisions of the Plan.
(h) "Optionee" means a Nonemployee Director who has been granted an
Option under the Plan.
(i) "Plan" means this 1999 Nonqualified Stock Option Plan for
Nonemployee Directors of Loislaw.com, Inc.
Section 3. Number of Shares. Options may be granted by the Company from
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time to time under the Plan to purchase an aggregate of 320,000 shares of
Common Stock. If an Option expires or terminates for any reason without having
been exercised in full, the unpurchased shares subject to such expired or
terminated Option shall again be available for purposes of the Plan. The shares
may be authorized but unissued or reacquired shares of Common Stock.
Section 4. Administration of the Plan. The Plan shall be administered by
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a Nonemployee Directors Stock Option Committee which shall consist of two or
more members of the Board, a majority of which shall not be Nonemployee
Directors. Each member of the Committee shall be appointed by and shall serve
at the pleasure of the Board. The Board shall have the sole continuing
authority to appoint members of the Committee both in substitution for members
previously appointed and to fill vacancies however caused. The following
provisions shall apply to the administration of the Plan:
(a) The Committee shall designate one of its members as Chairman and
shall hold meetings at such times and places as it may determine. Each
member of the Committee shall be notified in writing of the time and place
of any meeting of the Committee at least two days prior to such meeting,
provided that such notice may be waived by a Committee member. A majority
of the members of the Committee shall constitute a quorum and any action
taken by a majority of the members of the Committee present at any duly
called meeting at which a quorum is present (as well as any action
unanimously approved in writing) shall constitute action by the Committee.
(b) The Committee may appoint a Secretary (who need not be a member
of the Committee) who shall keep minutes of its meetings. The Committee may
make such rules and regulations for the conduct of its business as it may
determine.
(c) The Committee shall have full authority subject to the express
provisions of the Plan to interpret the Plan and any Option granted
hereunder, to provide, modify and
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rescind rules and regulations relating to the Plan, to determine the terms
and provisions of each Option and the form of each option agreement
evidencing an Option granted under the Plan and to make all other
determinations and perform such actions as the Committee deems necessary or
advisable to administer the Plan. In addition, the Committee shall have
full authority, subject to the express provisions of the Plan, to determine
the Nonemployee Directors to whom Options shall be granted, the time or
date of grant of each such Option, the number of shares subject thereto,
and the price at which such shares may be purchased, and the nature and
extent of restrictions, if any, on such shares. In making such
determinations, the Committee may take into account such facts as the
Committee in its discretion shall deem appropriate to carry out the
purposes of the Plan.
(d) No member of the Committee or the Board shall be liable for any
action taken or determination made in good faith with respect to the Plan
or any Option granted hereunder.
Section 5. Grant of Options. At any time and from time to time during the
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term of the Plan and subject to the express provisions hereof, Options may be
granted by the Committee to any Nonemployee Director for such number of shares
of Common Stock as the Committee in its discretion shall deem to be in the best
interest of the Company and which will serve to further the purposes of the
Plan.
Section 6. Option Price and Payment. The purchase price per share of
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Common Stock under each Option shall be determined by the Committee in its
discretion, but in no event shall such price be less than 100% of the Fair
Market Value per share of Common Stock on the date the Option is granted. Upon
exercise of an Option, the purchase price shall be paid in full in cash or by
such of the following methods as the Committee may specify at the time of grant
and as shall be included in the option agreement: (i) by personal check of the
Optionee; (ii) by the delivery of shares of Common Stock having an aggregate
Fair Market Value on the date of exercise equal to the aggregate exercise price
of the shares as to which the Option is being exercised; (iii) by means of a
broker-assisted exercise whereby the Optionee delivers to the Company, together
with a properly executed exercise notice, such other documentation as the
Committee and the broker assisting in the transaction shall require to effect an
exercise of the Option, a sale of the shares of Common Stock acquired upon
exercise and the delivery to the Company of the proceeds of such sale in full
payment of the exercise price; or (iv) any combination of the foregoing methods
of payment. The proceeds of a sale of Common Stock upon exercise of an Option
shall constitute general funds of the Company. Upon exercise of an Option, the
Optionee will be required to pay to the Company the amount of federal, state or
local taxes, if any, required by law to be withheld in connection with such
exercise.
Section 7. Option Period and Terms of Exercise of Options. Each Option
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granted under the Plan shall vest and become exercisable on such date or dates
(each, a "Vesting Date") as the Committee shall determine. Except as otherwise
provided herein, each Option granted under the Plan shall be exercisable during
such period commencing on the Vesting Date(s) of such Option as the Committee
shall determine; provided, however, that the otherwise unexpired portion of any
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Option shall expire and become null and void upon the expiration of five years
from the date such Option was granted. Anything herein to the contrary
notwithstanding, the otherwise unexpired portion of any Option granted hereunder
shall expire and become null and void immediately upon an Optionee's termination
of service as a director of the Company by reason of such Optionee's fraud,
dishonesty or performance of other acts detrimental to the Company or an
Affiliate (as determined by the Committee in its sole discretion). The unvested
portion of any Option shall expire and become null and void upon the termination
of the Optionee's service as a director of the Company for any reason (including
without limitation a failure by the Board of Directors to nominate, or by the
stockholders to re-elect, the Optionee as a director). Under the provisions of
any option agreement evidencing an Option, the Committee may limit the number of
shares purchasable thereunder in any period or periods of time during which the
Option is exercisable and may impose such other terms and conditions upon the
exercise of an Option as are not inconsistent with the terms of the Plan;
provided, however, that the Committee, in its discretion, may accelerate the
exercise date of any such Option consistent with the terms of the Plan.
Section 8. Limited Transferability of Options. An Option granted under
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the Plan shall be exercisable only by the Optionee or by a person or entity to
which the Optionee is permitted to transfer the Option in accordance with this
Section 8. An Option granted under the Plan shall be transferrable by the
Optionee only as follows:
(a) By will or the laws of descent and distribution upon the death
of the Optionee;
(b) By gift or a domestic relations order to a "family member" of
the Optionee, as such term is defined in the instructions to Form S-8 under
the Securities Act of 1933, as amended, including without limitation trusts
in which family members of the Optionee have more than 50% of the
beneficial interest, foundations in which such family members control the
management of assets, and any other entity in which such family members or
the Optionee own more than 50% of the voting interests; or
(c) To an entity in which more than 50% of the voting interests are
owned by the Optionee or the Optionee's family members in exchange for an
interest or interests in that entity.
As a condition to any such transfer, each permitted transferee shall execute an
agreement satisfactory to the Company agreeing to be bound by the terms and
provisions of this Plan and the Optionee's original option agreement relating to
the Option.
Section 9. Agreement to Continue in Service. Each Optionee shall agree to
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remain in the service of the Company, at the pleasure of the Company's
stockholders, for a continuous period of at least four years after the date of
the grant to such Optionee of any Option, at the retainer rate and fee schedule,
if any, then in effect or at such changed rate or schedule as the Company from
time to time may establish.
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Section 10. Adjustments Upon Changes in Common Stock. In the event the
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Company shall effect a split of the Common Stock or dividend payable in Common
Stock, or in the event the outstanding Common Stock shall be combined into a
smaller number of shares, the maximum number of shares as to which Options may
be granted under the Plan shall be decreased or increased proportionately. In
the event that before delivery by the Company of all of the shares of Common
Stock for which any Option has been granted under the Plan, the Company shall
have effected such a split, dividend or combination, the shares still subject to
such Option shall be increased or decreased proportionately and the purchase
price per share shall be decreased or increased proportionately so that the
aggregate purchase price for all of the shares then subject to such Option shall
remain the same as immediately prior to such split, dividend or combination.
In the event of a reclassification of Common Stock not covered by the
foregoing, or in the event of a liquidation or reorganization (including a
merger, consolidation, spinoff or sale of assets) of the Company, including a
transaction in which the Company is not the survivor, the Board shall make such
adjustments, if any, as it may deem appropriate in the number, purchase price
and kind of shares covered by the unexercised portions of Options theretofore
granted under the Plan. The provisions of this Section shall only be applicable
if, and only to the extent that, the application thereof does not conflict with
any valid governmental statute, regulation or rule.
Section 11. Amendment and Termination of the Plan. Subject to the right
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of the Board to terminate the Plan prior thereto, the Plan shall terminate at
the expiration of ten years from July 22, 1999, the date of adoption of the Plan
by the Board. No Options may be granted after termination of the Plan. The
Board may alter or amend the Plan in any respect, except that no termination or
amendment of the Plan shall adversely affect the rights of an Optionee under a
previously granted Option, except with the consent of such Optionee.
Section 12. Modification of Options. Subject to the terms and conditions
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of and within the limitations of the Plan, the Committee may modify, extend or
renew outstanding Options granted under the Plan, or accept the surrender of
Options outstanding hereunder (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor. Notwithstanding
the foregoing, no modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option theretofore
granted to such Optionee.
Section 13. Requirements of Law. The granting of Options and the issuance
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of Common Stock upon the exercise of an Option shall be subject to all
applicable laws, rules and regulations and to such approval by governmental
agencies as may be required.
Section 14. Investment Letter. If the Company so elects, the Company's
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obligation to deliver Common Stock with respect to an Option shall be
conditioned upon its receipt from the Optionee to whom such Common Stock is to
be delivered of an executed investment letter containing such representations
and agreements as the Committee may determine to be necessary or advisable in
order to enable the Company to issue and deliver such Common Stock to such
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Optionee in compliance with the Securities Act of 1933 and other applicable
federal, state or local securities laws or regulations.
Section 15. Effective Date of the Plan. The Plan shall be effective as of
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the date of its adoption by the Board.
IN WITNESS WHEREOF, this Plan has been executed at Van Buren, Arkansas on,
and is effective as of, this 22nd day of July, 1999.
LOISLAW.COM, INC.
By: /s/ Kyle D. Parker
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Kyle D. Parker, Chairman
of the Board and Chief
Executive Officer
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