Exhibit 4(a)
CAPITA RESEARCH GROUP, INC.
1999 STOCK OPTION PLAN
1. PURPOSES OF PLAN. The purposes of this Plan, which shall be known as the
Capita Research Group, Inc. 1999 Stock Option Plan and is hereinafter referred
to as the "Plan," are (i) to provide incentives for key employees, directors,
consultants and other individuals providing services to CAPITA RESEARCH GROUP,
INC., (the "Company") and its subsidiary or parent corporations (within the
respective meanings of Section 424(f) and 424(e) of the Internal Revenue Code of
1986, as amended (the "Code"), and referred to herein as "Subsidiary" and
"Parent," respectively, and such Parent and each Subsidiary are referred to
herein individually as an "Affiliate" and collectively as "Affiliates") by
encouraging their ownership of the common stock, $.001 par value, of the Company
(the "Stock") and (ii) to aid the Company in retaining such key employees,
directors, consultants and other individuals upon whose efforts the Company's
success and future growth depends and in attracting other such employees,
directors, consultants and individuals.
2. ADMINSTRATION. The Plan shall be administered by the Compensation Committee
of the Board of Directors or a subcommittee of the Compensation Committee
appointed by the Compensation Committee as hereinafter provided (the committee
or subcommittee administering the Plan is hereinafter referred to as the
"Committee"). For purposes of administration, the Committee, subject to the
terms of the Plan, shall have plenary authority to establish such rules and
regulations, to make such determinations and interpretations, and to take such
other administrative actions as it deems necessary or advisable. All
determinations and interpretations made by the Committee shall be final,
conclusive and binding on all persons, including Optionees (as hereinafter
defined) and their legal representatives and beneficiaries.
The Committee shall consist of not fewer than two members of
the Board of Directors. Unless otherwise determined by the Board of Directors,
all members of the Board of Directors who serve on the Committee shall be
"Non-Employee Directors" (as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended and "outside directors" as defined in Treasury
Regulation ss.1.162-27(e)(3). The Compensation Committee shall designate one of
the members of the Committee as its Chairman. The Committee shall hold its
meetings at such times and places as it may determine. A majority of its members
shall constitute a quorum. All determinations of the committee shall be made by
a majority of its members. Any decision or determination reduced to writing and
signed by all members shall be as effective as if it had been made by a majority
vote at a meeting duly called and held. The Committee may appoint a secretary
(who need not be a member of the Committee). No member of the Committee shall be
liable for any act or omission with respect to his service on the Committee if
he acts in good faith and in a manner he reasonably believes to be in or not
opposed to the best interests of the Company.
3. STOCK AVAILABLE FOR OPTIONS. There shall be available for options under the
Plan a total of 2,500,000 shares of Stock, subject to any adjustments which may
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be made pursuant to Section 5(f0 hereof. Shares of Stock used for purposes of
the Plan may be either authorized and unissued shares, or previously issued
shares held in the treasury of the Company, or both. Shares of Stock covered by
options, which have terminated or expired prior to exercise, shall be available
for further options hereunder. The maximum number of options which may be
granted to any person under the Plan during any fiscal year of the Company shall
not exceed 1,000,000 shares.
4. ELIGIBILITY. Options under the Plan may be granted to key employees of the
Company or any Affiliate, including officers or directors of the Company or any
Affiliate, and to consultants and other individuals providing services to the
Company or any Affiliate (each such grantee, an "Optionee"). Options may be
granted to eligible individuals whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed by the
Company. In selecting individuals for options, the committee may take into
consideration any factors it may deem relevant, including its estimate of the
individual's present and potential contributions to the success of the Company
and its Affiliates. Service as an employee, director, officer or consultant of
or to the Company or any Affiliate shall be considered employment for purposes
of the Plan (and the period of such service shall be considered the period of
employment for purposes of Section 5(d) of this Plan); provided, however, that
incentive stock options may be granted under the plan only to an individual who
is an "employee" (as such term is used in Section 422 of the Code) of the
Company or any Affiliate.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall, in its
discretion, prescribe the terms and conditions of the options to be granted
hereunder, which terms and conditions need not be the same in each case, subject
to the following:
(a) Option Price. The price at which each share of Stock covered by an
option granted under the Plan may be purchased shall not be less than
the Market Value (as defined in Section 5(c) hereof) per share of Stock
on the date of grant of the option. The date of the grant of an option
shall be the date specified by the Committee in its grant of the
option.
(b) Option Period. The period for exercise of an option shall in no event
be more than ten years from the date of grant, or in the case of any
option intended to be an incentive stock option granted to an
individual owning, on the date of grant, stock possessing more than 10%
of the total combined voting power of all classes of stock of the
Company of any Parent or Subsidiary, more than five years from the date
of grant. Options may, in the discretion of the Committee, be made
exercisable in installments during the option period. Any shares not
purchased on any applicable installment date may be purchased
thereafter at any time before the expiration of the option period.
(c) Exercise of Options. In order to exercise an option, the Optionee shall
deliver to the Company written notice specifying the number of shares
of Stock to be purchased, together with cash or a certified or bank
cashier's check payable to the order of the Company in the full amount
of the purchase price therefor; provided that, for the purpose of
assisting an Optionee to exercise an option, the Company may make loans
to the Optionee or guarantee loans made by third parties to the
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Optionee, on such terms and conditions as the Board of Directors may
authorize; and provided further that such purchase price may be paid in
shares of Stock owned by the Optionee having an aggregate Market Value
of the date of exercise equal to the aggregate purchase price, or in a
combination of cash and Stock. For purposes of the Plan, the Market
Value per share of Stock shall be the last sale price regular way on
the date of reference, or, in case no sale takes place on such date,
the average of the closing high bid and low asked prices regular way,
in either case on the principal national securities exchange on which
the Stock is listed or admitted to trading, or if the Stock is not
listed or admitted to trading on any national securities exchange, the
last sale price reported on the National Market System of the National
Association of Securities Dealers Automated Quotation System ("NASDAQ")
on such date, or the last sale price reported on the NASDAQ Small Cap
Market on such date, or the average of the closing high bid and low
asked prices in the over-the-counter market on such date, whichever is
applicable, or if there are no such prices reported on NASDAQ or in the
over-the-counter market on such date, as furnished to the Committee by
any New York Stock Exchange member selected from time to time by the
Committee for such purpose. If there is no bid or asked price reported
on any such date, the Market Value shall be determined by the Committee
in accordance with the regulations promulgated under Section 2031 of
the Code, or by any other appropriate method selected by the Committee.
If the Optionee so requests, shares of Stock purchased upon exercise of
an option may be issued in the name of the Optionee or another person.
An Optionee shall have none of the rights of a stockholder until the
shares of Stock are issued to him.
(d) Effect of Termination of Employment. An option may not be exercised
after the Optionee has ceased to be in the employ of the Company or any
Affiliate, except in the following circumstances:
(i) If the Optionee's employment is terminated by action of the
Company or an Affiliate, or by reason of disability or
retirement under any retirement plan maintained by the Company
of any Affiliate, the option may be exercised by the Optionee
within three months after such termination, but only as to any
shares exercisable on the date of Optionee's employment so
terminates;
(ii) In the event of the death of the Optionee during the three
month period after termination of employment covered covered
by (i) above, the person or persons to whom his rights are
transferred by will or the laws of descent and distribution
shall have a period of one year from the date of his death to
exercise any options which were exercisable by the Optionee at
the time of his death; and
(iii) In the event of the death of the Optionee while employed, the
option shall thereupon become exercisable in full, and the
person or persons to whom the Optionee's rights are
transferred by will or the laws of descent and distribution
shall have a period of one year from the date of the
Optionee's death to exercise such option. The provisions of
the foregoing sentence shall apply to any outstanding options
which are incentive stock options to the extent permitted by
Section 422(d) of the Code and such outstanding options in
excess thereof shall, immediately upon the occurrence of the
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event described in the preceding sentence, be treated for all
purposes of the Plan as nonstatutory stock options and shall
be immediately exercisable as such as provided in the
foregoing sentence. In no event shall any option be
exercisable more than ten years from the date of grant
thereof. Nothing in the Plan or in any option granted pursuant
to the Plan (in the absence of an express provision to the
contrary) shall confer on any individual any right to continue
in the employ of the Company or any Affiliate or interfere in
any way with the right of the Company or any Affiliate to
terminate his employment at any time.
(e) Limitation on Transferability of Options. Except as provided in the
Section 5(e), during the lifetime of an Optionee, options held by such
Optionee shall be exercisable only by him and no option shall be
transferable other than by will or the laws of descent and
distribution. The Committee may, in its discretion, provide that during
the lifetime of an Optionee, options held by such Optionee may be
transferred to or for the benefit of a member of his immediate family
or to a charitable organization exempt from income tax under Section
501(c)(3) of the code. For purposes hereof, the term "immediate family"
of an Optionee shall mean such Optionee's spouse and children (both
natural and adoptive), and the direct lineal descendants of his
children.
(f) Adjustments for Change in Stock Subject to Plan. In the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or any
other change in the corporate structure of shares of the Company, the
Committee shall make such adjustments, if any, as it deems appropriate
in the number and kind of shares subject to the Plan, in the number and
kind of shares covered by outstanding options, or in the option price
per share, or both, and, in the case of a merger, consolidation or
other transaction pursuant to which the Company is not the surviving
corporation or pursuant to which the holders of outstanding Stock shall
receive in exchange therefor shares of capital stock of the surviving
corporation or another corporation, the Committee may require an
Optionee to exchange options granted under the Plan for options issued
by the surviving corporation or such other corporation.
(g) Acceleration of Exercisability of Options Upon Occurrence of Certain
Events. The Committee may, in its discretion provide in the case of any
option granted under the Plan that, in connection with any merger or
consolidation which results in the holders of the outstanding voting
securities of the company (determined immediately prior to such merger
or consolidation) owning less than a majority of the outstanding voting
securities of the surviving corporation (determined immediately
following such merger or consolidation), or any sale or transfer by the
Company of all or substantially all its or any tender offer or exchange
offer for or the acquisition, directly or indirectly, by any person or
group of all or a majority of the then outstanding voting securities of
the Company, such option shall become exercisable in full or part,
notwithstanding any other provision of the Plan or of any outstanding
options granted thereunder, on and after (i) the fifteenth day prior to
the effective date of such merger, consolidation, sale, transfer or
acquisition or (ii) the date of commencement of such tender offer or
exchange offer, as the case may be. The provisions of the foregoing
sentence shall apply to any outstanding options which are incentive
stock options to the extent permitted by Section 422(d) of the Code and
such outstanding options in excess thereof shall immediately upon the
occurrence of the event described in clause (i) or (ii) of the
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foregoing sentence, be treated for all purposes of the plan as
nonstatutory stock options and shall be immediately exercisable as such
as provided in the foregoing sentence. Notwithstanding the foregoing,
in no event shall any option be exercisable after the date of
termination of the exercise period of such option specified in Sections
5(b) and 5(d).
(h) Registration, Listing and Qualification of Shares of Stock. Each option
shall be subject to the requirement that if at any time the Board of
Directors shall determine that the registration, listing or
qualification of the shares of Stock covered thereby upon any
securities exchange or under any federal or state law, or the consent
or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the granting of
such option or the purchase of shares of Stock thereunder, no such
option may be exercised unless and until such registration, listing,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board of Directors. The
Company may require that any person exercising an option shall make
such representations and agreements and furnish such information as it
deems appropriate to assure compliance with the foregoing or any other
applicable legal requirement.
(i) Other Terms and Conditions. The Committee may impose such other terms
and conditions, not inconsistent with the terms hereof, on the grant or
exercise of options, as it deems advisable.
6. Additional Provisions Applicable to Incentive Stock Options. The Committee
may, in its discretion, grant options under the Plan to eligible employees which
constitute "incentive stock options" within the meaning of Section 422 of the
Code; provided, however, that (a) the aggregate Market Value of the Stock with
respect to which incentive stock options are exercisable for the first time by
the Optionee during any calendar year shall not exceed the limitation set forth
in Section 422(d) of the Code; (b) if the Optionee owns on the date of grant
securities possessing more than 10% of the total combined voting power of all
classes of securities of the Company or of any Affiliate, the price per share
shall not be less than 110% of the Market Value per share on the date of grant
and (c) Section 5(d)(ii) hereof shall not apply to any incentive stock option.
7. Amendment and Termination. Unless the Plan shall theretofore have been
terminated as hereinafter provided, the Plan shall terminate on, and no option
shall be granted hereunder after December 31, 2009; provided, however, that the
Board of Directors may at any time prior to that date terminate the Plan. The
Board of Directors may at any time amend the Plan or any outstanding options. No
termination or amendment of the Plan may, without the consent of an Optionee,
adversely affect the rights of such Optionee under any option held by such
Optionee.
8. Stockholder Approval of Plan. The establishment of the Plan shall be subject
to approval by a majority of the votes cast thereon by the stockholders of the
Company at a meeting of stockholders duly called and held for such purpose or by
a method and in a degree that would be treated as adequate under the applicable
law of the Company's state of incorporation, and no option granted hereunder
shall be exercisable prior to such approval.
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9. Withholding. It shall be a condition to the obligation of the Company to
issue shares of Stock upon exercise of an option, that the Optionee (or any
beneficiary, transferee or person entitled to act under Sections 5(d) or 5(e)
hereof) pay to the Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying any liability to withhold federal,
state or local income or other taxes. If the amount requested is not paid, the
Company may refuse to issue such shares of Stock.
10. Issuance of Certification; Legends. The Company may endorse such legend or
legends upon the certificates for shares of Stock issued upon the exercise of an
option granted hereunder and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as, in its absolute discretion, it
determines to be necessary or appropriate.
11. Other Actions. Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including
but not by way of limitation, the right of the Company to grant or assume
options for proper corporate purposes other than under the Plan with respect to
any employee or other person, firm, corporation or association.
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