EXHIBIT 10.3
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SOFTSENSE COMPUTER PRODUCTS, INC.
1995 INCENTIVE STOCK OPTION PLAN
1. PURPOSE
The purpose of Softsense Computer Products, Inc.'s 1995 Incentive Stock
Option Plan (the "Plan") is to encourage and enable eligible directors, officers
and employees of Softsense Computer Products, Inc. (the "Company") and its
subsidiaries to acquire proprietary interests in the Company through the
ownership of Common Stock of the Company. The Company believes that directors,
officers and key employees who participate in the Plan will have a closer
identification with the Company by virtue of their ability as shareholders to
participate in the Company's growth and earnings. The Plan also is designed to
provide motivation for participating directors, officers and key employees to
remain in the employ of and to give greater effort on behalf of the Company. It
is the intention of the Company to have the Plan qualify as an "incentive stock
option plan" under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations promulgated thereunder. Accordingly, the
provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean an incentive stock option agreement between the
Company and an Eligible Employee pursuant to the terms of this Plan.
(b) "Average Market Price" shall mean the mean between the high "bid" and
low "ask" prices as of the close of business for the Company's shares of Common
Stock in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System (or other national quotation
service). If the Company's Common Stock is not regularly traded in the over-the-
counter market but is registered on a national securities exchange, "Average
Market Price" shall mean the closing price of the Company's Common Stock on such
national securities exchange.
(c) "Board of Directors" shall mean the Board of Directors of the Company
or the Executive Committee of such Board.
(d) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan.
(e) "Common Stock" shall mean the no par value Common Stock of the
Company.
(f) "Company" shall mean Softsense Computer Products, Inc., a Georgia
corporation.
(g) "Current Value" shall mean the value of each Share as determined in
accordance with Section 9(c).
(h) "Disposition" shall mean any sale, gift, or other transfer, whether
outright or as security, inter vivos or at death, with or without consideration,
voluntary or involuntary, of all or any part of any right, title, or interest
(including but not limited to voting rights) in or to any Shares other than a
Permitted Disposition.
(i) "Eligible Employee(s)" shall mean a person or persons regularly
employed by the Company or a Subsidiary.
(j) "Optionee" shall mean an Eligible Employee having a right to purchase
Common Stock under an Agreement.
(k) "Option(s)" shall mean the right or rights granted to Eligible
Employees to purchase Common Stock under the Plan.
(l) "Permitted Disposition" shall mean any transfer of the Shares of
Optionee upon Optionee's death, to an heir or legatee; provided, however, that
such heir or legatee acknowledges in writing that he, she or it will be bound
by, and the Shares transferred will be subject to, the Plan; and further
provided that, the Company has not elected to repurchase the Shares pursuant to
Section 9(b) hereof.
(m) "Plan" shall mean this Softsense Computer Products, Inc. 1995
Incentive Stock Option Plan.
(n) "Shares," "Stock" or "Common Stock" shall mean shares of the no par
value Common Stock of the Company.
(o) "Subsidiary" shall mean any corporation, if the Company owns or
controls, directly or indirectly, a majority of the voting stock of such
corporation.
(p) "Ten Percent Owner" shall mean an individual who, at the time an
Option is granted, owns directly or indirectly more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company.
3. EFFECTIVE DATE
The effective date of the Plan (the "Effective Date") shall be the date the
Plan is adopted by the Board of Directors or the date the Plan is approved by
the shareholders of the Company, whichever is earlier. The Plan must be approved
by the affirmative vote of not less than a majority of the votes entitled to be
cast thereon, which shareholder vote must be taken within twelve (12) months
after the date the Plan is adopted by the Board of Directors. Such shareholder
vote shall not alter the Effective Date of the Plan. In the event shareholder
approval of the adoption of the Plan is not obtained within the aforesaid twelve
(12) month period, then any options granted in the intervening period shall be
void.
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4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold to Eligible Employees
under the Plan may at the election of the Board of Directors be either treasury
shares or shares originally issued for such purpose. The maximum number of
shares which shall be reserved and made available for sale under the Plan shall
be 2,500,000. Any shares subject to an Option which for any reason expires or is
terminated unexercised may again be subject to an Option under the Plan.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company or
the Committee. The Committee shall be comprised of not less than two (2) members
appointed by the Board of Directors of the Company from among its members. No
member of the Board of Directors shall be appointed or serve as a member of the
Committee, and any such appointment or service immediately and automatically
shall terminate, in the event that such person is not a disinterested person. As
used herein, the term "disinterested person" means a director who is not, during
the one year prior to service as an administrator of the Plan, or during such
service, granted or awarded equity securities pursuant to the Plan or any other
plan of the Company or any of its affiliates (as such term is defined in the
General Rules and Regulations of the Securities Exchange Act of 1934, as
amended).
Within the limitations described herein, the Board of Directors of the
Company or the Committee shall administer the Plan, select the Eligible
Employees to whom Options will be granted, determine the number of shares to be
optioned to each Eligible Employee and interpret, construe and implement the
provisions of the Plan. Board of Directors and Committee members shall be
reimbursed for out-of-pocket expenses reasonably incurred in the administration
of the Plan.
If the Plan is administered by the Board of Directors, a majority of the
members of the Board of Directors shall constitute a quorum, and the act of a
majority of the members of the Board of Directors present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
members of the Board of Directors shall be the acts of the Board of Directors.
If the Plan is administered by the Committee, the Committee shall select one of
its members as Chairman and shall hold its meetings at such times and places,
and pursuant to such rules consistent with the Plan, as it may determine. A
majority of the members of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the members of the
Committee shall be the acts of the Committee.
6. ELIGIBILITY
Options may be granted only to Eligible Employees.
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7. DURATION OF THE PLAN
The Plan shall remain in effect until all shares subject to or which may
become subject to the Plan shall have been purchased pursuant to Options granted
under the Plan; provided that Options under the Plan must be granted within ten
(10) years from the Effective Date.
8. QUALIFIED INCENTIVE OPTIONS
It is intended that Options granted under the Plan shall be qualified
incentive stock options under the provisions of Section 422 of the Code and the
regulations thereunder or corresponding provisions of subsequent revenue laws
and regulations in effect at the time such Options are granted. Such Options
shall be evidenced by stock option agreements in such form and not inconsistent
with this Plan as the Committee shall approve from time to time, which
agreements shall contain in substance the following terms and conditions:
(a) Price. The purchase price for shares purchased upon exercise will be
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the Average Market Price on the day the Option is granted, as determined by the
Board of Directors or the Committee, or, if the Stock is not traded in the
organized markets, then the price shall be the fair market value of the Stock as
determined in good faith by the Board of Directors or the Committee, but in no
case less than the par value of such stock; provided further that the purchase
price of stock deliverable upon the exercise of a qualified incentive option
granted to a Ten Percent Owner shall be not less than one hundred ten percent
(110%) of the Average Market Price or fair market value on the day the Option is
granted, as determined by the Board of Directors or the Committee, but in no
case less than the par value of such stock.
(b) Number of Shares. The Agreement shall specify the number of shares
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which the Optionee may purchase under such Option.
(c) Exercise of Options. The shares subject to the Option may be
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purchased in whole or in part by the Optionee in accordance with the terms of
the Agreement, from time to time after shareholder approval of the Plan, but in
no event later than ten (10) years from the date of grant of the Option.
Notwithstanding the foregoing, shares subject to an Option granted to a Ten
Percent Owner shall be exercisable no later than five (5) years from the date of
grant of the Option.
(d) Medium and Time of Payment. Stock purchased pursuant to an Agreement
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shall be paid for in full at the time of purchase. Payment of the purchase
price shall be in cash or shares of the Common Stock of the Company, or a
combination of cash and shares of the Common Stock of the Company. Upon receipt
of payment, the Company shall, without transfer or issue tax, deliver to the
Optionee (or other person entitled to exercise the Option) a certificate or
certificates for such shares.
(e) Rights as a Shareholder. An Optionee shall have no rights as a
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shareholder with respect to any shares covered by an Option until the date of
issuance of the stock certificate to the Optionee for such shares. Except as
otherwise expressly provided in the Plan, no adjustments shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
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(f) Nonassignability of Option. No Option shall be assignable or
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transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by him or her.
(g) Effect of Termination of Employment or Death. In the event that an
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Optionee during his or her lifetime ceases to be an employee of the Company or
of any subsidiary of the Company for any reason (including retirement) other
than death or permanent and total disability, any Option or unexercised portion
thereof which was otherwise exercisable on the date of termination of employment
shall expire unless exercised within a period of three (3) months from the date
on which the Optionee ceased to be an employee, but in no event after the term
provided in the Optionee's Agreement. In the event that an Optionee ceases to
be an employee of the Company or of any subsidiary of the Company for any reason
(including retirement) prior to the time that an Option is exercisable, his or
her Option shall terminate and be null and void.
In the event that an Optionee during his or her lifetime ceases to be an
employee of the Company or any subsidiary of the Company by reason of death or
permanent and total disability, any Option or unexercised portion thereof which
was otherwise exercisable on the date such Optionee ceased employment shall
expire unless exercised within a period of one (1) year from the date on which
the Optionee ceased to be an employee, but in no event after the term provided
in the Optionee's Agreement. Permanent and total disability as used herein is as
defined in Section 22(e)(3) of the Code.
In the event of the death of an Optionee, the Option shall be exercisable
by his or her personal representatives, heirs or legatees, as provided herein.
(h) Recapitalization. In the event that dividends are payable in Common
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Stock of the Company or in the event there are splits, subdivisions or
combinations of shares of Common Stock of the Company, the number of Shares
available under the Plan shall be increased or decreased proportionately, as the
case may be, and the number of Shares deliverable upon the exercise thereafter
of any Option theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price.
(i) Reorganization. In case the Company is merged or consolidated with
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another corporation and the Company is not the surviving corporation, or in case
the property or stock of the Company is acquired by another corporation, or in
case of a separation, reorganization, recapitalization or liquidation of the
Company, the Board of Directors of the Company, or the Board of Directors of any
corporation assuming the obligations of the Company hereunder, shall either (i)
make appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to option immediately before such substitution over the purchase price
thereof, or (ii) upon written notice to the Optionee provide that the Option
(including the shares not then exercisable) must be exercised within sixty (60)
days of the date of such notice or it will be terminated.
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(j) General Restriction. Each Option shall be subject to the requirement
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that if at any time the Board of Directors shall determine, in its discretion,
that the listing, registration or qualification of the Shares subject to such
Option upon any securities exchange or 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 of such Option or the
issue or purchase of Shares thereunder, such Option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors.
9. RESTRICTIONS UPON THE TRANSFER OF SHARES
Optionees shall not make any Disposition of Shares, other than a Permitted
Disposition, except as provided in this Section 9. Any purported transfer in
violation of any provision of this Section 9 shall be null and void and shall
not operate to transfer any interest or title to the purported transferee.
(a) Right of First Refusal.
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(i) Condition to Transfer. If Optionee desires to make a
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Disposition of any Shares, he shall first offer such Shares to the Company by
giving it notice of his intention to dispose of the Shares. Such notice shall
name the type of Disposition, the proposed transferee, the number of shares to
be transferred, the price per share, and the terms of payment. Following receipt
of such notice by the Company, the Company may exercise an option in the manner
provided by subsection 9(a)(ii) to purchase all, but not less than all, of the
offered Shares, at a price equal to the price specified in the notice.
(ii) Exercise of Option. The Company may exercise its option by
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giving written notice, which must state the number of shares the Company elects
to purchase, and the price and terms of purchase, to Optionee within 10 days
after its receipt of Optionee's notice. The Company may purchase all of the
offered Shares but may not purchase less than all of the offered Shares. If the
Company elects to purchase all the offered Shares, it shall state in its notice
of exercise the date for the closing of the purchase, which shall not be less
than 45 nor more than 60 days after its receipt of notice from the Optionee.
(iii) Failure to Exercise. If the right of first refusal provided
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above is not exercised as to all of the offered Shares, if the exercise by the
Company is not made within the time specified in subsection 9(a)(ii), or if the
purchase by the Company is not consummated within the time specified in
subsection 9(a)(ii) through no fault of the Optionee, the Optionee may transfer
the offered Shares to the proposed purchaser, at the price and on the terms and
conditions set forth in the notice of intention sent by the Optionee. As a
condition to such transfer, the Optionee shall obtain the written
acknowledgement of the transferee that the transferee will be bound by, and the
Shares transferred will be subject to, the terms of such Optionee's Agreement.
If the transfer of Shares by the Optionee to the proposed purchaser named in the
notice of intention is not made within 30 days after the date the Optionee
became free to transfer, the right to transfer in accordance with the notice
shall expire. In such event the provisions of this Section 9 shall remain in
full force and effect as to the offered Shares.
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(iv) Assignment of Option by Company. The Company may assign its
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rights under subsection 9(a)(ii) hereof to any of the then current shareholders
of the Company other than the Optionee, such that such shareholder shall have
the right to purchase the Shares of the Optionee, or such portion of the Shares
of the Optionee as shall be mutually agreed between the Company and such
shareholder, so long as, in the aggregate, the Company and such shareholder
purchase all of the Shares of the Optionee.
(v) Closing. At the closing the Company shall deliver the required
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consideration, and the Optionee shall deliver the offered Shares, duly endorsed
for transfer and with any and all required revenue stamps attached.
(b) Company's Right of Repurchase Upon Termination of Employment or Death.
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(i) Optional Repurchase by the Company. The Company shall have the
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right, but not the obligation, to purchase all (but not less than all) of the
Shares of Optionee in the event he ceases to be an employee of the Company or
any subsidiary of the Company for any reason (including retirement) or in the
event of his death (a "Termination Event"), at a price equal to its Current
Value, at any time following the Termination Event. The right of the Company set
forth in this subsection 9(b)(i) may be exercised by written notice from the
Company to the Optionee or the estate of the Optionee, as the case may be,
specifying the amount of the Current Value and the time (which shall be not more
than ten business days following the date of giving such written notice) and
place for closing the Company's purchase of such shares. The Company's purchase
of such Shares shall take place in accordance with, and at the time and place
specified in, such notice.
(ii) Assignment of Option to Repurchase by Company. The Company may
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assign its rights under subsection 9(b)(i) hereof to any of the then current
shareholders of the Company other than the Optionee or the estate of the
Optionee, as the case may be, such that such shareholder shall have the right to
purchase the Shares of the Optionee, or such portion of the Shares of the
Optionee as shall be mutually agreed between the Company and such shareholder,
so long as, in the aggregate, the Company and such shareholder purchase all of
the Shares of the Optionee.
(iii) Installment Payment of Purchase Price Upon Death. Any payment
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of the purchase price for the Shares of an Optionee may be made in cash or in an
initial installment, payable at the closing, of 20% of the total price, with the
balance to be paid in 4 equal annual installments of principal and interest
beginning on the first day of the thirteenth month following the date of the
closing. The obligation to pay the balance of the purchase price shall be
evidenced by a promissory note bearing interest at the rate of 9% per annum.
Such note shall provide for acceleration upon the default in any installment
payment which is not cured within thirty (30) days after written notice and
shall give the purchaser of the Shares the option of prepayment without premium
or penalty in whole at any time and in part from time to time after the calendar
year of sale. The purchaser shall pledge the purchased Shares to secure payment
of the note, pursuant to a stock pledge agreement.
(c) Determination of Current Value. The Current Value of each Share of
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the Company shall be the Average Market Price on the date of the Termination
Event, as determined by the Board of Directors, or, if the Shares are not traded
in the organized markets, then the price shall be the fair
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market value of the Shares determined in good faith by the Board of Directors,
but in no case less than the par value of such stock.
(d) Termination of Restrictions on Shares. The restrictions imposed by
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and the rights in favor of the Company set forth in Section 9 shall terminate in
full at such time as the Company's Common Stock is publicly traded on a national
securities exchange or on The Nasdaq Stock Market.
10. AMENDMENT OF THE PLAN
The Plan may at any time or from time to time be terminated, modified or
amended by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon by the Company's shareholders. The Board of
Directors may at any time and from time to time modify or amend the Plan in any
respect, except that without shareholder approval the Board of Directors may not
(1) increase the maximum number of shares for which Options may be granted under
the Plan either in the aggregate or to any Eligible Employee (other than
increases due to changes in capitalization as referred to in Section 8(h)
hereof), or (2) reduce the option price or waiting period (except as otherwise
expressly provided in the Plan in the case of a reorganization of the Company as
referred to in Section 8(i) hereof), or (3) extend the period during which
Options may be granted or exercised, or (4) change the class of employees
eligible for incentive stock options under Section 6 hereof, or (5) to otherwise
materially modify (within the meaning of Rule 16b-3 of the Securities Exchange
Act of 1934, as amended) the requirements as to eligibility for participation in
the Plan, or (6) to otherwise materially increase (within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, as amended) the benefits accruing
to participants under the Plan. The termination or any modification or amendment
of the Plan shall not, without the written consent of an Optionee, affect his or
her rights under an Option or right previously granted to him or her. With the
written consent of the Optionee affected, the Board of Directors or the
Committee may amend outstanding option agreements in a manner not inconsistent
with the Plan. Without employee consent, the Board of Directors may at any time
and from time to time modify or amend outstanding option agreements in such
respects as it shall deem necessary in order that Options granted hereunder
shall comply with the appropriate provisions of the Code and regulations
thereunder which are in effect from time to time respecting "Qualified Incentive
Options."
11. LIMITATION ON NUMBER OF SHARES THAT MAY BE PURCHASED
The aggregate fair market value (determined at the time the Option is
granted) of the shares with respect to which incentive stock options are
exercisable for the first time by an Optionee during any calendar year (under
all incentive stock option plans of the Company) shall not exceed $100,000.
12. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company, all Eligible Employees participating
in the Plan, and on all persons eligible or who become eligible to participate
in the Plan.
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