INTERNET FINANCIAL SERVICES INC.
AMENDED AND RESTATED 1998 STOCK OPTION PLAN
SECTION 1. Establishment. There is hereby established the
Amended and Restated INTERNET FINANCIAL SERVICES INC. 1998 Stock Option Plan
("Plan"), pursuant to which employees (including officers), directors,
consultants and other persons who perform substantial services for or on behalf
of INTERNET FINANCIAL SERVICES INC. and/or its subsidiaries (the "Company") may
be granted options to purchase shares of common stock of the Company, par value
$.001 per share ("Common Stock"), and thereby share in the future growth of the
business. The subsidiaries of the Company included in this Plan (the
"Subsidiaries") shall be any subsidiary of the Company as defined in Section 424
of the Internal Revenue Code of 1986, as amended (the "Code").
SECTION 2. Status of Options. The options which may be granted
pursuant to this Plan will constitute either incentive stock options within the
meaning of Section 422 of the Code ("Incentive Stock Options") or options which
are not Incentive Stock Options ("Non-incentive Stock Options"). Incentive Stock
Options and Non-incentive Stock Options shall be collectively referred to herein
as "Options".
SECTION 3. Eligibility. All employees (including officers,
whether or not they are members of the Board of Directors) of the Company or any
of its Subsidiaries who are
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employed at the time of the adoption of this Plan or thereafter, any directors
of the Company, and any consultants and other persons who perform substantial
services for or on behalf of the Company, any of its Subsidiaries or affiliates,
or any entity in which the Company has an interest (collectively, the
"Grantees") shall be eligible to be granted Non-incentive Stock Options under
this Plan. All employees (including officers, whether or not they are members of
the Board of Directors) of the Company or any of its Subsidiaries who are
employed at the time of adoption of this Plan or thereafter shall be eligible to
be granted Incentive Stock Options under this Plan.
SECTION 4. Number of Shares Covered by Options; No Preemptive
Rights. The total number of shares which may be issued and sold pursuant to
Options granted under this Plan shall be 600,000 shares of Common Stock (or the
number and kind of shares of stock or other securities which, in accordance with
Section 9 of this Plan, shall be substituted for such shares of Common Stock or
to which said shares shall be adjusted; hereinafter, all references to shares of
Common Stock are deemed to be references to said shares or shares so adjusted.)
The issuance of shares upon exercise of an Option shall be free from any
preemptive or preferential right of subscription or purchase on the part of any
shareholder. If any outstanding Option granted under this Plan expires or is
terminated, for any reason, the shares of Common Stock subject to the
unexercised portion of the Option will again be available for Options issued
under this Plan.
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SECTION 5. Administration.
(a) This Plan shall be administered by the Board of Directors
of the Company (the "Board"). Subject to the express provisions of this Plan,
the Board shall have complete authority, in its discretion, to interpret this
Plan, to prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective option agreements (which
need not be identical), to determine the Grantees to whom, and the times and the
prices at which, Options shall be granted, the option periods, the number of
shares of the Common Stock to be subject to each Option and, as limited by
Section 3 hereof, whether each Option shall be an Incentive Stock Option or a
Non-incentive Stock Option, and to make all other determinations necessary or
advisable for the administration of the Plan. Each Option shall be clearly
identified at the time of grant as to its status. In making such determinations,
the Board may take into account the nature of the services rendered by the
respective Grantees, their present and potential contributions to the success of
the Company and such other factors as the Board, in its discretion, shall deem
relevant. Nothing contained in this Plan shall be deemed to give any Grantee any
right to be granted an Option to purchase shares of Common Stock except to the
extent and upon such terms and conditions as may be determined by the Board. The
Board's determination on all of the matters referred to in this Section 5 shall
be conclusive.
(b) The Board may at its election provide in any option
agreement covering the grant of Options under this Plan that, upon the exercise
of such Options, the Company will loan to the holder thereof such amount as
shall equal the purchase price of the shares of Common Stock issuable upon such
exercise, such loan to be on terms and conditions deemed appropriate by the
Board.
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(c) Notwithstanding any provision hereof to the contrary, the
Board shall have sole and exclusive authority with respect to the grant of
Options to directors.
SECTION 6. Terms of Incentive Stock Options. Each Incentive
Stock Option granted under this Plan shall be evidenced by an Incentive Stock
Option Agreement which shall be executed by the Company and by the person to
whom such Incentive Stock Option is granted, and shall be subject to the
following terms and conditions:
(a) The price at which shares of Common Stock covered by each
Incentive Stock Option may be purchased pursuant thereto shall be determined in
each case on the date of grant by the Board, but shall be an amount not less
than the par value of such shares and not less than the fair market value of
such shares on the date of grant. For purposes of this Section and Section 7,
the fair market value of shares of Common Stock on any day shall be (i) in the
event the Common Stock is not publicly traded, the fair market value on such day
as determined in good faith by the Board or (ii) in the event the Common Stock
is publicly traded, the last sale price of a share of Common Stock as reported
by the principal quotation service on which the Common Stock is listed, if
available, or, if last sale prices are not reported with respect to the Common
Stock, the mean of the high bid and low asked prices of a share of Common Stock
as reported by such principal quotation service, or, if there is no such report
by such quotation service for such day, such fair market value shall be the
average of (i) the last sale price (or, if last sale prices are
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not reported with respect to the Common Stock, the mean of the high bid and low
asked prices) on the day next preceding such day for which there was a report
and (ii) the last sale price (or, if last sale prices are not reported with
respect to the Common Stock, the mean of the high bid and low asked prices) on
the day next succeeding such day for which there was a report, or as otherwise
determined by the Board in its discretion pursuant to any reasonable method
contemplated by Section 422 of the Code and any regulations issued pursuant to
that Section.
(b) The price of the shares to be purchased pursuant to each
Incentive Stock Option shall be paid in full in cash, or by delivery (i.e.,
surrender) of shares of Common Stock of the Company then owned by the Grantee,
at the time of the exercise of the Incentive Stock Option. Shares of Common
Stock so delivered will be valued on the day of delivery for the purpose of
determining the extent to which the option price has been paid thereby, in the
same manner as provided for the purchase price of Incentive Stock Options as set
forth in paragraph (a) of this Section, or as otherwise determined by the Board,
in its discretion, pursuant to any reasonable method contemplated by Section 422
of the Code and any regulations issued pursuant to that Section.
(c) Each Incentive Stock Option Agreement shall provide that
such Incentive Stock Option may be exercised by the Grantee, in such parts and
at such times as may be specified in such Agreement, within a period not
exceeding ten years after the date on which the Incentive Stock Option is
granted (hereinafter called the "Incentive Stock Option Period") and, in any
event, only during the continuance of the employee's employment by the Company
or any of its
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Subsidiaries or during the period of three months after the termination of such
employment to the extent that the right to exercise such Incentive Stock Option
had accrued at the date of such termination; provided, however, that if
Incentive Stock Options as to 100 or more shares are held by a Grantee, then
such Incentive Stock Options may not be exercised for less than 100 shares at
any one time, and if Incentive Stock Options for less than 100 shares are held
by a Grantee, then Incentive Stock Options for all such shares must be exercised
at one time; and provided, further, that if the Grantee, while still employed by
the Company or any of its Subsidiaries, shall die or become disabled (within the
meaning of Section 22(e)(3) of the Code) within the Incentive Stock Option
Period, the Incentive Stock Option may be exercised, to the extent specified in
the Incentive Stock Option Agreement, and as herein provided, but only prior to
the first to occur of:
(i) the expiration of the period of one year after the
date of the Grantee's death or disability, or
(ii) the expiration of the Incentive Stock Option
Period,
by the person or persons entitled to do so under the Grantee's will, or, if the
Grantee shall fail to make testamentary disposition of said Incentive Stock
Option, or shall die intestate, by the Grantee's legal representative or
representatives.
(d) Each Incentive Stock Option granted under this Plan shall by
its terms be non-transferable by the Grantee except by will or by the laws of
descent and distribution, and each
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Incentive Stock Option shall by its terms be exercisable during the Grantee's
lifetime only by him.
(e) Notwithstanding the foregoing, if an Incentive Stock Option
is granted to a person at any time when such person owns, within the meaning of
Section 424(d) of the Code, more than 10% of the total combined voting power of
all classes of stock of the employer corporation (or a parent or subsidiary of
such corporation within the meaning of Section 424 of the Code), the price at
which each share of Common Stock covered by such Incentive Stock Option may be
purchased pursuant to such Incentive Stock Option shall not be less than 110% of
the fair market value (determined as in paragraph (a) of this Section) of the
shares of Common Stock at the time the Incentive Stock Option is granted, and
such Incentive Stock Option must be exercised within a period specified in the
Incentive Stock Option Agreement which does not exceed five years after the date
on which such Incentive Stock Option is granted.
(f) The Incentive Stock Option Agreement entered into pursuant
hereto may contain such other terms, provisions and conditions not inconsistent
herewith as shall be determined by the Board including, without limitation,
provisions (i) requiring the giving of satisfactory assurances by the Grantee
that the shares are purchased for investment and not with a view to resale in
connection with a distribution of such shares, and will not be transferred in
violation of applicable securities laws, (ii) restricting the transferability of
such shares during a specified period and (iii) requiring the resale of such
shares to the Company at the option price if the employment of the employee
terminates prior to a specified time. In addition, the Board, in its discretion,
may afford to holders of Incentive Stock Options granted under this Plan the
right to
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require the Company to cause to be registered under the Securities Act of 1933,
as amended, for public sale by the holders thereof, shares of Common Stock
subject to such Incentive Stock Options upon such terms and subject to such
conditions as the Board may determine to be appropriate.
(g) In the discretion of the Board, a single Stock Option
Agreement may include both Incentive Stock Options and Non-incentive Stock
Options, or those options may be included in separate stock option agreements.
SECTION 7. Terms of Non-incentive Stock Options. Each
Non-incentive Stock Option granted under this Plan shall be evidenced by a
Non-incentive Stock Option Agreement which shall be executed by the Company and
by the person to whom such Non-incentive Stock Option is granted, and shall be
subject to the following terms and conditions:
(a) The price at which shares of Common Stock covered by each
Non-incentive Stock Option may be purchased pursuant thereto shall be an amount
not less than the par value of such shares and not less than the fair market
value of such shares on the date of grant.
(b) Each Non-incentive Stock Option Agreement shall provide that
such Non-incentive Stock Option may be exercised by the Grantee, in such parts
and at such times as may be specified in such Agreement, within a period up to
and including ten years after the date on which the Non-incentive Stock Option
is granted.
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(c) Each Non-incentive Stock Option granted under this Plan
shall by its terms be non-transferable by the optionee except by will or by the
laws of descent and distribution, and each Non-incentive Stock Option shall by
its terms be exercisable during the Grantee's lifetime only by him.
(d) The Non-incentive Stock Option Agreement entered into
pursuant hereto may contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Board, in its sole
discretion, including without limitation the terms, provisions and conditions
set forth in Section 6(f) with respect to Incentive Stock Option Agreements.
SECTION 8. Limit on Option Amount.
(a) Notwithstanding any provision contained herein, the
aggregate fair market value (determined under Section 6(a) as of the time
Incentive Stock Options are granted) of the shares of Common Stock with respect
to which Incentive Stock Options are first exercisable by any employee during
any calendar year (under all stock option plans of the employee's employer
corporation and its parent and subsidiary corporation within the meaning of
Section 424 of the Code) shall not exceed $100,000. If an Incentive Stock Option
exceeds this $100,000 limitation, the portion of such Option which is
exercisable for shares of Common Stock in excess of the $100,000 limitation
shall be treated as a Non-incentive Stock Option. The limit in this paragraph
shall not apply to Options which are designated as Non-incentive Stock Options,
and, except as otherwise provided herein, there shall be no limit on the amount
of such Options which may be first exercisable in any year.
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(b) Notwithstanding any provision contained herein, grants of
options under this Plan to any one optionee who is an employee of the Company
shall be limited to Options to purchase no more than 150,000 shares of Common
Stock per calendar year (subject to adjustment in the event of a stock split).
SECTION 9. Adjustment of Number of Shares.
(a) In the event that a dividend shall be declared upon the
shares of Common Stock payable in shares of Common Stock, the number of shares
of Common Stock then subject to any Option granted hereunder, and the number of
shares reserved for issuance pursuant to this Plan but not yet covered by an
Option, shall be adjusted by adding to each of such shares the number of shares
which would be distributable thereon if such share had been outstanding on the
date fixed for determining the shareholders entitled to receive such stock
dividend. In the event that the outstanding shares of Common Stock shall be
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation, whether through
reorganization, recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share of Common Stock
subject to any such Option and for each share of Common Stock reserved for
issuance pursuant to the Plan but not yet covered by an Option, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share shall be
exchanged; provided, however, that in the event that such change or exchange
results from a merger or consolidation, and in the judgment of the Board such
substitution cannot be effected or would be inappropriate, or if the Company
shall sell all or substantially all of its assets,
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the Company shall use reasonable efforts to effect some other adjustment of each
then outstanding Option which the Board, in its sole discretion, shall deem
equitable. In the event that there shall be any change, other than as specified
above in this Section 9(a), in the number or kind of outstanding shares of
Common Stock or of any stock or other securities into which such shares of
Common Stock shall have been changed or for which they shall have been
exchanged, then, if the Board shall determine that such change equitably
requires an adjustment in the number or kind of shares theretofore reserved for
issuance pursuant to the Plan but not yet covered by an Option and of the shares
then subject to an Option or Options, such adjustment shall be made by the Board
and shall be effective and binding for all purposes of this Plan and of each
stock option agreement. Notwithstanding the foregoing, if any adjustment in the
number of shares which may be issued and sold pursuant to Options is required by
the Code or regulations issued pursuant thereto to be approved by the
stockholders in order to enable the Company to issue Incentive Stock Options
pursuant to this Plan, then no such adjustment shall be made without the
approval of the stockholders. In the case of any such substitution or adjustment
as provided for in this Section 9(a), the option price in each stock option
agreement for each share covered thereby prior to such substitution or
adjustment will be the total option price for all shares of stock or other
securities which shall have been substituted for each such share or to which
such share shall have been adjusted pursuant to this Section 9. No adjustment or
substitution provided for in this Section 9 shall require the Company, in any
stock option agreement, to sell a fractional share, and the total substitution
or adjustment with respect to each stock option agreement shall be limited
accordingly. Notwithstanding the foregoing, in the case of Incentive Stock
Options, if the effect of the adjustments or substitution is to cause the
Incentive Stock Option to fail to continue to
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qualify as an Incentive Stock Option or to cause a modification, extension or
renewal of such Incentive Stock Option within the meaning of Section 424 of the
Code, the Board of Directors shall use reasonable efforts to effect such other
adjustment of each then outstanding option as the Board of Directors, in its
sole discretion, shall deem equitable.
(b) In the event that the Company shall effect a distribution,
other than a normal and customary cash dividend, upon shares of Common Stock,
the Board may, in order to prevent significant diminution in the value of
Options as a result of any such distribution, take such measures as it deems
fair and equitable, including, without limitation, the adjustment of the option
price per share for shares not issued and sold hereunder prior to the record
date for said distribution.
SECTION 10. Amendments. This Plan may be terminated or amended
from time to time by vote of the Board; provided, however, that no such
termination or amendment shall materially adversely affect or impair any then
outstanding Option without the consent of the Grantee thereof and no amendment
which shall (i) change the total number of shares which may be issued and sold
pursuant to Options granted under this Plan, or (ii) change the designation or
class of employees or other persons eligible to receive Incentive Options or
Non-incentive Options, shall be effective without the approval of the
stockholders. Notwithstanding the foregoing, the Plan may be amended by the
Board to incorporate any amendments made to the Code or regulations promulgated
thereunder which the Board deems to be necessary or desirable to preserve (i)
incentive stock option status for outstanding Incentive Stock Options and the
ability
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to issue Incentive Stock Options pursuant to the Plan, and (ii) the
deductibility by the Company pursuant to Section 162(m) of the Code of amounts
taxed to Plan participants as ordinary compensation income.
SECTION 11. Effective Date and Termination. The Plan shall
become effective on the date hereof, subject to timely adoption and approval by
the stockholders of the Company. Except to the extent necessary to govern
outstanding Options, this Plan shall terminate on, and no additional Options
shall be granted after, ten years from the date of first adoption of the Plan
and approval by the stockholders. (March 16, 1998)
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