ISPSOFT INC.
2000 STOCK PLAN
Section 1. Establishment And Purpose.
ISPSoft Inc. (the "Company") depends on the initiative, effort and
judgment of its Employees, Consultants and Outside Directors for the successful
conduct of its business. The purpose of the Plan is to provide long-term
incentive compensation to attract, retain and reward individuals who can and do
make a substantial contribution to the long-term growth and prosperity of the
Company by offering selected individuals an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, by
purchasing Shares of the Company's Stock. The Plan provides both for the direct
award or sale of Shares and for the grant of Options to purchase Shares. Options
granted under the Plan may include Nonstatutory Options as well as ISOs intended
to qualify under Section 422 of the Code.
Capitalized terms are defined in Section 12.
Section 2. Administration.
(a) Committees of the Board of Directors. The Plan may be
administered by one or more Committees. Each Committee shall consist of
one or more members of the Board of Directors who have been appointed by
the Board of Directors. Each Committee shall have such authority and be
responsible for such functions as the Board of Directors has assigned to
it. If no Committee has been appointed, the entire Board of Directors
shall administer the Plan. Any reference to the Board of Directors in
the Plan shall be construed as a reference to the Committee (if any) to
whom the Board of Directors has assigned a particular function.
(b) Authority of the Board of Directors. Subject to the
provisions of the Plan, the Board of Directors shall have full authority
and discretion to take any actions it deems necessary or advisable for
the administration of the Plan. All decisions, interpretations and other
actions of the Board of Directors shall be final and binding on all
Purchasers, all Optionees and all persons deriving their rights from a
Purchaser or Optionee.
Section 3. Eligibility.
(a) General Rule. Only Employees, Outside Directors and
Consultants shall be eligible for the grant of Options or the direct
award or sale of Shares. Only Employees shall be eligible for the grant
of ISOs.
(b) Ten-Percent Stockholders. An individual who owns more than
ten percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, its Parent or any of its Subsidiaries
shall not be eligible for the grant of an ISO unless (i) the Exercise
Price is at least one hundred ten percent (110%) of the Fair Market
Value of a Share on the date of grant and (ii) such ISO by its terms is
not exercisable after the expiration of
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five (5) years from the date of grant. For purposes of this Subsection
(b), in determining stock ownership, the attribution rules of Section
424(d) of the Code shall be applied.
Section 4. Stock Subject To Plan.
(a) Basic Limitation. Shares offered under the Plan may be
authorized but unissued Shares or treasury Shares. The aggregate number
of Shares that may be issued under the Plan (upon exercise of Options or
other rights to acquire Shares) shall not exceed 5,000,000 shares,
subject to adjustment pursuant to Section 8. The number of Shares that
are subject to Options or other rights outstanding at any time under the
Plan shall not exceed the number of Shares that then remain available
for issuance under the Plan. The Company, during the term of the Plan,
shall at all times reserve and keep available sufficient Shares to
satisfy the requirements of the Plan.
(b) Additional Shares. In the event that any outstanding Option
or other right for any reason expires or is canceled or otherwise
terminated, the Shares allocable to the unexercised portion of such
Option or other right shall again be available for the purposes of the
Plan. In the event that Shares issued under the Plan are reacquired by
the Company pursuant to any forfeiture provision, right of repurchase or
right of first refusal, such Shares shall again be available for the
purposes of the Plan, except that the aggregate number of Shares which
may be issued upon the exercise of ISOs shall in no event exceed
5,000,000 Shares (subject to adjustment pursuant to Section 8).
Section 5. Terms and Conditions of Awards or Sales.
(a) Stock Purchase Agreement. Each award or sale of Shares under
the Plan (other than upon exercise of an Option) shall be evidenced by a
Stock Purchase Agreement between the Purchaser and the Company. Such
award or sale shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are
not inconsistent with the Plan and which the Board of Directors deems
appropriate for inclusion in a Stock Purchase Agreement. The provisions
of the various Stock Purchase Agreements entered into under the Plan
need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any
right to acquire Shares under the Plan (other than an Option) shall
automatically expire if not exercised by the Purchaser within thirty
(30) days after the grant of such right was communicated to the
Purchaser by the Company. Such right shall not be transferable and shall
be exercisable only by the Purchaser to whom such right was granted.
(c) Purchase Price. The Purchase Price of Shares to be offered
under the Plan, if newly issued, shall not be less than the par value,
if any, of such Shares. Subject to the preceding sentence, the Purchase
Price shall be determined by the Board of Directors at its sole
discretion. The Purchase Price shall be payable in a form described in
Section 7.
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(d) Withholding Taxes. As a condition to the purchase of Shares,
the Purchaser shall make such arrangements as the Board of Directors may
require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such
purchase.
(e) Restrictions on Transfer of Shares. Any Shares awarded or
sold under the Plan shall be subject to such special forfeiture
conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such
restrictions shall be set forth in the applicable Stock Purchase
Agreement and shall apply in addition to any restrictions that may apply
to holders of Shares generally.
Section 6. Terms And Conditions Of Options.
(a) Stock Option Agreement. Each grant of an Option under the
Plan shall be evidenced by a Stock Option Agreement between the Optionee
and the Company. Such Option shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and
conditions which are not inconsistent with the Plan and which the Board
of Directors deems appropriate for inclusion in a Stock Option
Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify
the number of Shares that are subject to the Option and shall provide
for the adjustment of such number in accordance with Section 8. The
Stock Option Agreement shall also specify whether the Option is an ISO
or a Nonstatutory Option.
(c) Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date
of grant, and a higher percentage may be required by Section 3(b). The
Exercise Price of a Nonstatutory Option to purchase newly issued Shares
shall not be less than the par value, if any, of such Shares. Subject to
the preceding two sentences, the Exercise Price under an Option shall be
determined by the Board of Directors at its sole discretion. The
Exercise Price shall be payable in a form described in Section 7.
(d) Withholding Taxes. As a condition to the exercise of an
Option, the Optionee shall make such arrangements as the Board of
Directors may require for the satisfaction of any federal, state, local
or foreign withholding tax obligations that may arise in connection with
such exercise. The Optionee shall also make such arrangements as the
Board of Directors may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an
Option.
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(e) Exercisability. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable.
The exercisability provisions of a Stock Option Agreement shall be
determined by the Board of Directors at its sole discretion.
(f) Basic Term. The Stock Option Agreement shall specify the term
of the Option. The term shall not exceed ten (10) years from the date of
grant, and in the case of an ISO a shorter term may be required by
Section 3(b). Subject to the preceding sentence, the Board of Directors
at its sole discretion shall determine when an Option is to expire. A
Stock Option Agreement may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's Service or
death.
(g) Nontransferability. No Option shall be transferable by the
Optionee other than by beneficiary designation, will or the laws of
descent and distribution. An Option may be exercised during the lifetime
of the Optionee only by the Optionee or by the Optionee's guardian or
legal representative. No Option or interest therein may be transferred,
assigned, pledged or hypothecated by the Optionee during the Optionee's
lifetime, whether by operation of law or otherwise, or be made subject
to execution, attachment or similar process.
(h) No Rights as a Stockholder. An Optionee, or a transferee of
an Optionee, shall have no rights as a stockholder with respect to any
Shares covered by the Optionee's Option until such person becomes
entitled to receive such Shares by filing a notice of exercise and
paying the Exercise Price pursuant to the terms of such Option and a
stock certificate is issued to that person for such Shares.
(i) Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Board of Directors may modify, extend or
assume outstanding Options or may accept the cancellation of outstanding
Options (whether granted by the Company or another issuer) in return for
the grant of new Options for the same or a different number of Shares
and at the same or a different Exercise Price. The foregoing
notwithstanding, no modification of an Option shall, without the consent
of the Optionee, impair the Optionee's rights or increase the Optionee's
obligations under such Option.
(j) Restrictions on Transfer of Shares. Any Shares issued upon
exercise of an Option shall be subject to such special forfeiture
conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such
restrictions shall be set forth in the applicable Stock Option Agreement
and shall apply in addition to any restrictions that may apply to
holders of Shares generally.
(k) Accelerated Vesting. Unless the applicable Stock Option
Agreement provides otherwise, any right to repurchase an Optionee's
Shares at the original Exercise Price upon termination of the Optionee's
Service shall lapse and all of such Shares shall become vested if:
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(i) The Company is subject to a Change in Control before the
Optionee's Service terminates; and
(ii) The repurchase right is not assigned by the Company to
the entity that employs the Optionee immediately after the
Change in Control or to its parent or subsidiary.
Section 7. Payment For Shares.
(a) General Rule. The entire Purchase Price or Exercise Price of
Shares issued under the Plan shall be payable in United States dollars
by bank or cashiers check at the time when such Shares are purchased,
except as otherwise provided in this Section 7.
(b) Surrender of Stock. To the extent that a Stock Option
Agreement so provides, all or any part of the Exercise Price may be paid
by surrendering, or attesting to the ownership of, Shares that are
already owned by the Optionee. Such Shares shall be surrendered to the
Company in good form for transfer and shall be valued at their Fair
Market Value on the date when the Option is exercised. The Optionee
shall not surrender, or attest to the ownership of, Shares in payment of
the Exercise Price if such action would cause the Company to recognize
compensation expense (or additional compensation expense) with respect
to the Option for financial reporting purposes.
(c) Services Rendered. At the discretion of the Board of
Directors, Shares may be awarded under the Plan in consideration of
services rendered to the Company, a Parent or a Subsidiary prior to the
award. At the discretion of the Board of Directors, Shares may also be
awarded under the Plan in consideration of services to be rendered to
the Company, a Parent or a Subsidiary after the award, except that the
par value, if any, of such Shares, if newly issued, shall be paid in
cash or cash equivalents.
(d) Promissory Note. To the extent that a Stock Option Agreement
or Stock Purchase Agreement so provides, all or a portion of the
Exercise Price or Purchase Price (as the case may be) of Shares issued
under the Plan may be paid with a full-recourse promissory note.
However, the par value, if any, of the Shares, if newly issued, shall be
paid in cash or cash equivalents. The Shares shall be pledged as
security for payment of the principal amount of the promissory note and
interest thereon. The interest rate payable under the terms of the
promissory note shall not be less than the minimum rate (if any)
required to avoid the imputation of additional interest under the Code.
Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization
requirements (if any) and other provisions of such note.
(e) Exercise/Sale. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in
part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the
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Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise
Price and any withholding taxes.
(f) Exercise/Pledge. To the extent that a Stock Option Agreement
so provides, and if Stock is publicly traded, payment may be made all or
in part by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of
the Exercise Price and any withholding taxes.
Section 8. Adjustment Of Shares.
(a) General. In the event of a subdivision of the outstanding
Stock, a declaration of a dividend payable in Shares, a declaration of
an extraordinary dividend payable in a form other than Shares in an
amount that has a material effect on the Fair Market Value of the Stock,
a combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a spin-off, a reclassification or
a similar occurrence, the Board of Directors shall make appropriate
adjustments in one or more of (i) the number of Shares available for
future grants under Section 4, (ii) the number of Shares covered by each
outstanding Option or (iii) the Exercise Price under each outstanding
Option.
(b) Mergers and Consolidations. In the event that the Company is
a party to a merger or consolidation, outstanding Options shall be
subject to the agreement of merger or consolidation. Such agreement,
without the Optionees' consent, may provide for:
(i) The continuation of such outstanding Options by the Company
(if the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options by
the surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its
parent of options with substantially the same terms for such
outstanding Options; or
(iv) The cancellation of such outstanding Options without
payment of any consideration.
(c) Reservation of Rights. Except as provided in this Section 8,
an Optionee or Purchaser shall have no rights by reason of (i) any
subdivision or consolidation of shares of stock of any class, (ii) the
payment of any dividend or (iii) any other increase or decrease in the
number of shares of stock of any class. Any issuance by the Company of
shares of stock of any class, or securities convertible into shares of
stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of
Shares subject to an Option. The grant of an Option pursuant to the Plan
shall not affect in
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any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate,
sell or transfer all or any part of its business or assets.
Section 9. Securities Law Requirements.
Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange or other
securities market on which the Company's securities may then be traded.
Section 10. No Retention Rights.
Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Purchaser or Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Company (or any Parent or Subsidiary employing or
retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason, with or without cause.
Section 11. Duration and Amendments.
(a) Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject
to the approval of the Company's stockholders. In the event that the
stockholders fail to approve the Plan within twelve (12) months after
its adoption by the Board of Directors, any grants of Options or sales
or awards of Shares that have already occurred shall be rescinded, and
no additional grants, sales or awards shall be made thereafter under the
Plan.
(b) Right to Amend or Terminate the Plan. The Board of Directors
may amend, suspend or terminate the Plan at any time and for any reason;
provided, however, that any amendment of the Plan which increases the
number of Shares available for issuance under the Plan (except as
provided in Section 8), or which materially changes the class of persons
who are eligible for the grant of ISOs, shall be subject to the approval
of the Company's stockholders. Stockholder approval shall not be
required for any other amendment of the Plan.
(c) Effect of Amendment or Termination. No Shares shall be issued
or sold under the Plan after the termination thereof, except upon
exercise of an Option granted prior to such termination. The termination
of the Plan, or any amendment thereof, shall not affect any Share
previously issued or any Option previously granted under the Plan.
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Section 12. Definitions.
As used in the Plan the following terms have the meanings stated
in this Section 12. The singular includes the plural, and the masculine
gender includes the feminine and neuter genders, and vice versa, as the
context requires. The word "person" includes any natural person and any
corporation, firm, partnership or other form of association.
(a) "Board of Directors" shall mean the Board of Directors of
the Company, as constituted from time to time.
(b) "Change in Control" shall mean:
(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if more than fifty percent (50%) of the combined
voting power of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other
reorganization; or
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Committee" shall mean a committee of the Board of Directors,
as described in Section 2(a).
(e) "Company" shall mean ISPSoft Inc., a New Jersey corporation.
(f) "Consultant" shall mean a person who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or
advisor, excluding Employees and Outside Directors.
(g) "Employee" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.
(h) "Exercise Price" shall mean the amount for which one Share
may be purchased upon exercise of an Option, as specified by the Board
of Directors in the applicable Stock Option Agreement.
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(i) "Fair Market Value" shall mean the fair market value of a
Share, determined as follows:
(i) If the Stock is principally traded on an exchange or
market in which prices are reported on a bid and asked basis, the mean
between the bid and the asked price for the Stock at the close of
trading on the applicable valuation date;
(ii) If the Stock is principally traded on a national
securities exchange or automated quotation system, the closing price
of the Stock on the applicable valuation date; and
(iii) If the Stock is neither traded on the over-the-counter
market nor listed on a national securities exchange or automated
quotation system, such value as the Board of Directors, in good faith,
shall determine. Such determination shall be conclusive and binding on
all persons.
(j) "ISO" shall mean an employee incentive stock option described
in Section 422(b) of the Code.
(k) "Nonstatutory Option" shall mean a stock option not described
in Sections 422(b) or 423(b) of the Code.
(l) "Option" shall mean an ISO or Nonstatutory Option granted
under the Plan and entitling the holder to purchase Shares.
(m) "Optionee" shall mean an individual who holds an Option.
(n) "Outside Director" shall mean a member of the Board of
Directors who is not an Employee.
(o) "Parent" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of
the corporations other than the Company owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain. A corporation
that attains the status of a Parent on a date after the adoption of the
Plan shall be considered a Parent commencing as of such date.
(p) "Plan" shall mean this ISPSoft Inc. 2000 Stock Plan.
(q) "Purchase Price" shall mean the consideration for which one
Share may be acquired under the Plan (other than upon exercise of an
Option), as specified by the Board of Directors.
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(r) "Purchaser" shall mean an individual to whom the Board of
Directors has offered the right to acquire Shares under the Plan (other
than upon exercise of an Option).
(s) "Service" shall mean service as an Employee, Outside Director
or Consultant.
(t) "Share" shall mean one share of Stock, as adjusted in
accordance with Section 8 (if applicable).
(u) "Stock" shall mean the Common Stock of the Company, without
par value.
(v) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee that contains the terms, conditions and
restrictions pertaining to the Optionee's Option.
(w) "Stock Purchase Agreement" shall mean the agreement between
the Company and a Purchaser who acquires Shares under the Plan, which
contains the terms, conditions and restrictions pertaining to the
acquisition of such Shares.
(x) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company, if each
of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a
Subsidiary on a date after the adoption of the Plan shall be considered
a Subsidiary commencing as of such date.
Section 13. Execution.
To record the adoption of the Plan by the Board of Directors, the
Company has caused its authorized officer to execute the same.
ISPSOFT INC.
By: /s/ Binay Sugla
--------------------------------
Binay Sugla, President and CEO
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