EXHIBIT 10.1
TELECOM COMMUNICATIONS, INC.
2002 STOCK OPTION PLAN
AS AMENDED
TELECOM COMMUNICATIONS, INC.
2002 STOCK OPTION PLAN
DATE OF ADOPTION: DECEMBER 18, 2002
AMENDED: JANUARY 29, 2004
APPROVED BY BOARD OF DIRECTORS ON DECEMBER 18, 2002
AMENDED: JANUARY 29, 2004
TELECOM COMMUNICATIONS, INC.
2002 STOCK OPTION PLAN
1. SECTION PURPOSE; DEFINITIONS.
-----------------------------
1.1 PURPOSE. The purpose of the Telecom Communications, Inc. 2002 Stock
Option Plan is to enable the Company to offer to its employees, officers,
directors and consultants whose past, present and/or potential contributions to
the Company and its Subsidiaries have been, are or will be important to the
success of the Company, an opportunity to acquire a proprietary interest in the
Company. The various types of long-term incentive awards that may be provided
under the Plan will enable the Company to respond to changes in compensation
practices, tax laws, accounting regulations and the size and diversity of its
businesses.
1.2 DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Agreement" means the agreement between the Company and the Holder
setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(d) "Committee" means the Stock Option Committee of the Board or any
other committee of the Board that the Board may designate to administer the Plan
or any portion thereof. If no Committee is so designated, then all references in
this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, $.001 par
value per share.
(f) "Company" means Telecom Communications, Inc., a corporation
organized under the laws of the State of Indiana.
(g) "Deferred Stock" means Common Stock to be received, under an award
made pursuant to Section 8, below, at the end of a specified deferral period.
(h) "Disability" means physical or mental impairment as determined
under procedures established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section 12.1, below.
(j) "Fair Market Value", unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder, means, as of any
given date: (i) if the Common Stock is listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the last sale
price of the Common Stock in the principal trading market for the Common Stock
on such date, as reported by the exchange or Nasdaq, as the case may be; (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on such
date, as reported by the OTC Bulletin Board or the National Quotation Bureau,
Incorporated or similar publisher of such quotations; and (iii) if the fair
market value of the Common Stock cannot be determined pursuant to clause (i) or
(ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under the Plan.
(l) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment with
the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 9, below,
that is valued in whole or in part by reference to, or is otherwise based upon,
Common Stock.
(p) "Parent" means any present or future "parent corporation" of the
Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the Telecom Communications, Inc. 2002 Stock Option
Plan, as amended on January 29, 2004, and as hereinafter amended from time to
time.
(r) "Repurchase Value" shall mean the Fair Market Value in the event
the award to be repurchased under Section 10.2 is comprised of shares of Common
Stock and the difference between Fair Market Value and the Exercise Price (if
lower than Fair Market Value) in the event the award is a Stock Option or Stock
Appreciation Right; in each case, multiplied by the number of shares subject to
the award.
(s) "Restricted Stock" means Common Stock, received under an award
made pursuant to Section 7, below, that is subject to restrictions under said
Section 7.
(t) "SAR Value" means the excess of the Fair Market Value (on the
exercise date) over the exercise price that the participant would have otherwise
had to pay to exercise the related Stock Option, multiplied by the number of
shares for which the Stock Appreciation Right is exercised.
(u) "Stock Appreciation Right" means the right to receive from the
Company, on surrender of all or part of the related Stock Option, without a cash
payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the Fair Market Value (on the exercise date).
(v) "Stock Option" or "Option" means any option to purchase shares of
Common Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under Section 5.3
of the Plan.
(x) "Subsidiary" means any present or future "subsidiary corporation"
of the Company, as such term is defined in Section 424(f) of the Code.
2. SECTION ADMINISTRATION.
-----------------------
2.1 COMMITTEE MEMBERSHIP. The Plan shall be administered by the Board or a
Committee. Committee members shall serve for such term as the Board may in each
case determine, and shall be subject to removal at any time by the Board. The
Committee members, to the extent possible and deemed to be appropriate by the
Board, shall be "non-employee directors" as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
"outside directors" within the meaning of Section 162(m) of the Code.
2.2 POWERS OF COMMITTEE. The Committee shall have full authority to award,
pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation
Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock Reload Options
and/or (vi) Other Stock-Based Awards. For purposes of illustration and not of
limitation, the Committee shall have the authority (subject to the express
provisions of this Plan):
2
(a) to select the officers, employees, directors and consultants
of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock
Options and/or Other Stock-Based Awards may from time to time be
awarded hereunder.
(b) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but
not limited to, number of shares, share exercise price or types of
consideration paid upon exercise of such options, such as other
securities of the Company or other property, any restrictions or
limitations, and any vesting, exchange, surrender, cancellation,
acceleration, termination, exercise or forfeiture provisions, as the
Committee shall determine);
(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an
award granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in
conjunction with or apart from other equity awarded under this Plan
and cash awards made by the Company or any Subsidiary outside of this
Plan;
(e) to permit a Holder to elect to defer a payment under the Plan
under such rules and procedures as the Committee may establish,
including the crediting of interest on deferred amounts denominated in
cash and of dividend equivalents on deferred amounts denominated in
Common Stock;
(f) to determine the extent and circumstances under which Common
Stock and other amounts payable with respect to an award hereunder
shall be deferred that may be either automatic or at the election of
the Holder; and
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher
option exercise prices and/or contain other less favorable terms, and
(ii) new awards of any other type for previously granted awards of the
same type, which previously granted awards are upon less favorable
terms.
2.3 INTERPRETATION OF PLAN.
-----------------------
(a) COMMITTEE AUTHORITY. Subject to Section 11, below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as
it shall, from time to time, deem advisable, to interpret the terms
and provisions of the Plan and any award issued under the Plan (and to
determine the form and substance of all Agreements relating thereto),
and to otherwise supervise the administration of the Plan. Subject to
Section 11, below, all decisions made by the Committee pursuant to the
provisions of the Plan shall be made in the Committee's sole
discretion and shall be final and binding upon all persons, including
the Company, its Subsidiaries and Holders.
(b) INCENTIVE STOCK OPTIONS. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to
Incentive Stock Options (including but limited to Stock Reload Options
or Stock Appreciation rights granted in conjunction with an Incentive
Stock Option) or any Agreement providing for Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to disqualify
the Plan under Section 422 of the Code, or, without the consent of the
Holder(s) affected, to disqualify any Incentive Stock Option under
such Section 422.
3
3. SECTION STOCK SUBJECT TO PLAN.
-----------------------------
3.1 NUMBER OF SHARES. The total number of shares of Common Stock reserved
and available for issuance under the Plan shall be 5,500,000 shares. Shares of
Common Stock under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Common Stock that have been
granted pursuant to a Stock Option cease to be subject to a Stock Option, or if
any shares of Common Stock that are subject to any Stock Appreciation Right,
Restricted Stock, Deferred Stock award, Reload Stock Option or Other Stock-Based
Award granted hereunder are forfeited or any such award otherwise terminates
without a payment being made to the Holder in the form of Common Stock, such
shares shall again be available for distribution in connection with future
grants and awards under the Plan. If a Holder pays the exercise price of a Stock
Option by surrendering any previously owned shares and/or arranges to have the
appropriate number of shares otherwise issuable upon exercise withheld to cover
the withholding tax liability associated with the Stock Option exercise, then
the number of shares available under the Plan shall be increased by the lesser
of (i) the number of such surrendered shares and shares used to pay taxes; and
(ii) the number of shares purchased under such Stock Option.
3.2 ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any
merger, reorganization, consolidation, dividend (other than a cash dividend)
payable on shares of Common Stock, stock split, reverse stock split, combination
or exchange of shares, or other extraordinary or unusual event occurring after
the grant of an award which results in a change in the shares of Common Stock of
the Company as a whole, the Committee shall determine, in its sole discretion,
whether such change equitably requires an adjustment in the terms of any award
or the aggregate number of shares reserved for issuance under the Plan. Any such
adjustments will be made by the Committee, whose determination will be final,
binding and conclusive.
4. SECTION ELIGIBILITY.
-------------------
Awards may be made or granted to employees, officers, directors and
consultants who are deemed to have rendered or to be able to render significant
services to the Company or its Subsidiaries and who are deemed to have
contributed or to have the potential to contribute to the success of the
Company. No Incentive Stock Option shall be granted to any person who is not an
employee of the Company or a Subsidiary at the time of grant.
5. SECTION STOCK OPTIONS.
---------------------
5.1 GRANT AND EXERCISE. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
Committee shall have the authority to grant Incentive Stock Options or
Non-Qualified Stock Options, or both types of Stock Options which may be granted
alone or in addition to other awards granted under the Plan. To the extent that
any Stock Option intended to qualify as an Incentive Stock Option does not so
qualify, it shall constitute a separate Nonqualified Stock Option.
5.2 TERMS AND CONDITIONS. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
(a) OPTION TERM. The term of each Stock Option shall be fixed by
the Committee; provided, however, that an Incentive Stock Option may
be granted only within the ten-year period commencing from the
Effective Date and may only be exercised within ten years of the date
of grant (or five years in the case of an Incentive Stock Option
granted to an optionee who, at the time of grant, owns Common Stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company ("10% Stockholder").
(b) EXERCISE PRICE. The exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant and, in the case of an Incentive Stock Option,
may not be less than 100% of the Fair Market Value on the day of
grant; provided, however, that the exercise price of an Incentive
Stock Option granted to a 10% Stockholder shall not be less than 110%
of the Fair Market Value on the date of grant.
4
(c) EXERCISABILITY. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee and as set forth in Section 10, below. If
the Committee provides, in its discretion, that any Stock Option is
exercisable only in installments, i.e., that it vests over time, the
Committee may waive such installment exercise provisions at any time
at or after the time of grant in whole or in part, based upon such
factors as the Committee shall determine.
(D) METHOD OF EXERCISE. Subject to whatever installment, exercise
and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during
the term of the Option, by giving written notice of exercise to the
Company specifying the number of shares of Common Stock to be
purchased. Such notice shall be accompanied by payment in full of the
purchase price, which shall be in cash or, if provided in the
Agreement, either in shares of Common Stock (including Restricted
Stock and other contingent awards under this Plan) or partly in cash
and partly in such Common Stock, or such other means which the
Committee determines are consistent with the Plan's purpose and
applicable law. Cash payments shall be made by wire transfer,
certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be
required to deliver certificates for shares of Common Stock with
respect to which an Option is exercised until the Company has
confirmed the receipt of good and available funds in payment of the
purchase price thereof. Payments in the form of Common Stock shall be
valued at the Fair Market Value on the date prior to the date of
exercise. Such payments shall be made by delivery of stock
certificates in negotiable form that are effective to transfer good
and valid title thereto to the Company, free of any liens or
encumbrances. Subject to the terms of the Agreement, the Committee
may, in its sole discretion, at the request of the Holder, deliver
upon the exercise of a Nonqualified Stock Option a combination of
shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provisions of Section 8 of the Plan, such Deferred
Stock shall be fully vested and not subject to forfeiture. A Holder
shall have none of the rights of a stockholder with respect to the
shares subject to the Option until such shares shall be transferred to
the Holder upon the exercise of the Option.
(e) TRANSFERABILITY. Except as may be set forth in the Agreement,
no Stock Option shall be transferable by the Holder other than by will
or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the Holder's lifetime, only by the Holder
(or, to the extent of legal incapacity or incompetency, the Holder's
guardian or legal representative).
(F) TERMINATION BY REASON OF DEATH. If a Holder's employment by
the Company or a Subsidiary terminates by reason of death, any Stock
Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall
thereupon automatically terminate, except that the portion of such
Stock Option that has vested on the date of death may thereafter be
exercised by the legal representative of the estate or by the legatee
of the Holder under the will of the Holder, for a period of one year
(or such other greater or lesser period as the Committee may specify
at grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) TERMINATION BY REASON OF DISABILITY. If a Holder's employment
by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by
the Committee at the time of grant and set forth in the Agreement,
shall thereupon automatically terminate, except that the portion of
such Stock Option that has vested on the date of termination may
thereafter be exercised by the Holder for a period of one year (or
such other greater or lesser period as the Committee may specify at
the time of grant) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(h) OTHER TERMINATION. Subject to the provisions of Section 13.3,
below, and unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, if a Holder is an employee of
the Company or a Subsidiary at the time of grant and if such Holder's
5
employment by the Company or any Subsidiary terminates for any reason
other than death or Disability, the Stock Option shall thereupon
automatically terminate, except that if the Holder's employment is
terminated by the Company or a Subsidiary without cause or due to
Normal Retirement, then the portion of such Stock Option that has
vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the
balance of such Stock Option's term.
(i) ADDITIONAL INCENTIVE STOCK OPTION LIMITATION. In the case of
an Incentive Stock Option, the aggregate Fair Market Value (on the
date of grant of the Option) with respect to which Incentive Stock
Options become exercisable for the first time by a Holder during any
calendar year (under all such plans of the Company and its Parent and
Subsidiary) shall not exceed $100,000.
(j) BUYOUT AND SETTLEMENT PROVISIONS. The Committee may at any
time, in its sole discretion, offer to repurchase a Stock Option
previously granted, based upon such terms and conditions as the
Committee shall establish and communicate to the Holder at the time
that such offer is made.
5.3 STOCK RELOAD OPTION. If a Holder tenders shares of Common Stock to pay
the exercise price of a Stock Option ("Underlying Option"), and/or arranges to
have a portion of the shares otherwise issuable upon exercise withheld to pay
the applicable withholding taxes, the Holder may receive, at the discretion of
the Committee, a new Stock Reload Option to purchase that number of shares of
Common Stock equal to the number of shares tendered to pay the exercise price
and the withholding taxes ( but only if such shares were held by the Holder for
at least six months). Stock Reload Options may be any type of option permitted
under the Code and will be granted subject to such terms, conditions,
restrictions and limitations as may be determined by the Committee, from time to
time. Such Stock Reload Option shall have an exercise price equal to the Fair
Market Value as of the date of exercise of the Underlying Option. Unless the
Committee determines otherwise, a Stock Reload Option may be exercised
commencing one year after it is granted and shall expire on the date of
expiration of the Underlying Option to which the Reload Option is related.
6. SECTION STOCK APPRECIATION RIGHTS.
---------------------------------
6.1 GRANT AND EXERCISE. The Committee may grant Stock Appreciation Rights
to participants who have been, or are being granted, Stock Options under the
Plan as a means of allowing such participants to exercise their Stock Options
without the need to pay the exercise price in cash. In the case of a
Nonqualified Stock Option, a Stock Appreciation Right may be granted either at
or after the time of the grant of such Nonqualified Stock Option. In the case of
an Incentive Stock Option, a Stock Appreciation Right may be granted only at the
time of the grant of such Incentive Stock Option.
6.2 TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to the
following terms and conditions:
(a) EXERCISABILITY. Stock Appreciation Rights shall be
exercisable as shall be determined by the Committee and set forth in
the Agreement, subject to the limitations, if any, imposed by the
Code, with respect to related Incentive Stock Options.
(b) TERMINATION. A Stock Appreciation Right shall terminate and
shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by
the Committee and set forth in the Agreement and by surrendering the
applicable portion of the related Stock Option. Upon such exercise and
surrender, the Holder shall be entitled to receive a number of shares
of Common Stock equal to the SAR Value divided by the Fair Market
Value on the date the Stock Appreciation Right is exercised.
6
(d) SHARES AFFECTED UPON PLAN. The granting of a Stock
Appreciation Right shall not affect the number of shares of Common
Stock available under for awards under the Plan. The number of shares
available for awards under the Plan will, however, be reduced by the
number of shares of Common Stock acquirable upon exercise of the Stock
Option to which such Stock Appreciation Right relates.
7. SECTION RESTRICTED STOCK.
------------------------
7.1 GRANT. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture ("Restriction Period"), the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
awards.
7.2 TERMS AND CONDITIONS. Each Restricted Stock award shall be subject to
the following terms and conditions:
(a) CERTIFICATES. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the
name of the Holder to whom such Restricted Stock shall have been
awarded. During the Restriction Period, certificates representing the
Restricted Stock and any securities constituting Retained
Distributions (as defined below) shall bear a legend to the effect
that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto,
are subject to the restrictions, terms and conditions provided in the
Plan and the Agreement. Such certificates shall be deposited by the
Holder with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which will permit
transfer to the Company of all or any portion of the Restricted Stock
and any securities constituting Retained Distributions that shall be
forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) RIGHTS OF HOLDER. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The
Holder will have the right to vote such Restricted Stock, to receive
and retain all regular cash dividends and other cash equivalent
distributions as the Board may in its sole discretion designate, pay
or distribute on such Restricted Stock and to exercise all other
rights, powers and privileges of a holder of Common Stock with respect
to such Restricted Stock, with the exceptions that (i) the Holder will
not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall
have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled; (ii) the Company will retain
custody of the stock certificate or certificates representing the
Restricted Stock during the Restriction Period; (iii) other than
regular cash dividends and other cash equivalent distributions as the
Board may in its sole discretion designate, pay or distribute, the
Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock
(and such Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the Restricted
Stock) until such time, if ever, as the Restricted Stock with respect
to which such Retained Distributions shall have been made, paid or
declared shall have become vested and with respect to which the
Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the
Agreement or otherwise established by the Committee with respect to
any Restricted Stock or Retained Distributions will cause a forfeiture
of such Restricted Stock and any Retained Distributions with respect
thereto.
(c) VESTING; FORFEITURE. Upon the expiration of the Restriction
Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and
conditions (i) all or part of such Restricted Stock shall become
vested in accordance with the terms of the Agreement, subject to
Section 10, below, and (ii) any Retained Distributions with respect to
such Restricted Stock shall become vested to the extent that the
Restricted Stock related thereto shall have become vested, subject to
Section 10, below. Any such Restricted Stock and Retained
7
Distributions that do not vest shall be forfeited to the Company and
the Holder shall not thereafter have any rights with respect to such
Restricted Stock and Retained Distributions that shall have been so
forfeited.
8. SECTION DEFERRED STOCK.
----------------------
8.1 GRANt. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock will be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period ("Deferral Period") during which, and the
conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
8.2 TERMS AND CONDITIONs. Each Deferred Stock award shall be subject to the
following terms and conditions:
(a) CERTIFICATES. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 8.2 (d) below,
where applicable), share certificates shall be issued and delivered to
the Holder, or his legal representative, representing the number equal
to the shares covered by the Deferred Stock award.
(b) RIGHTS OF HOLDER. A person entitled to receive Deferred Stock
shall not have any rights of a Stockholder by virtue of such award
until the expiration of the applicable Deferral Period and the
issuance and delivery of the certificates representing such Common
Stock. The shares of Common Stock issuable upon expiration of the
Deferral Period shall not be deemed outstanding by the Company until
the expiration of such Deferral Period and the issuance and delivery
of such Common Stock to the Holder.
(c) VESTING; FORFEITURE. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the
satisfaction of any other applicable restrictions, terms and
conditions all or part of such Deferred Stock shall become vested in
accordance with the terms of the Agreement, subject to Section 10,
below. Any such Deferred Stock that does not vest shall be forfeited
to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) ADDITIONAL DEFERRAL PERIOD. A Holder may request to, and the
Committee may at any time, defer the receipt of an award (or an
installment of an award) for an additional specified period or until a
specified event ("Additional Deferral Period"). Subject to any
exceptions adopted by the Committee, such request must generally be
made at least one year prior to expiration of the Deferral Period for
such Deferred Stock award (or such installment).
9. SECTION OTHER STOCK-BASED AWARDS.
--------------------------------
Other Stock-Based Awards may be awarded, subject to limitations under
applicable law, that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, shares of Common Stock,
as deemed by the Committee to be consistent with the purposes of the Plan,
including, without limitation, purchase rights, shares of Common Stock awarded
which are not subject to any restrictions or conditions, convertible or
exchangeable debentures, or other rights convertible into shares of Common Stock
and awards valued by reference to the value of securities of or the performance
of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone
or in addition to or in tandem with any other awards under this Plan or any
other plan of the Company. Each other Stock-Based Award shall be subject to such
terms and conditions as may be determined by the Committee.
8
10. SECTION ACCELERATED VESTING AND EXERCISABILITY.
----------------------------------------------
10.1 NON-APPROVED TRANSACTIONS. If any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act of 1934, as amended ("Exchange
Act")), is or becomes the "beneficial owner" (as referred in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's then
outstanding securities in one or more transactions, and the Board does not
authorize or otherwise approve such acquisition, then the vesting periods of any
and all Stock Options and other awards granted and outstanding under the Plan
shall be accelerated and all such Stock Options and awards will immediately and
entirely vest, and the respective holders thereof will have the immediate right
to purchase and/or receive any and all Common Stock subject to such Stock
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Stock Options and awards.
10.2 APPROVED TRANSACTIONS. The Committee may, in the event of an
acquisition of substantially all of the Company's assets or at least 50% of the
combined voting power of the Company's then outstanding securities in one or
more transactions (including by way of merger or reorganization) which has been
approved by the Company's Board of Directors, (i) accelerate the vesting of any
and all Stock Options and other awards granted and outstanding under the Plan,
and (ii) require a Holder of any award granted under this Plan to relinquish
such award to the Company upon the tender by the Company to Holder of cash in an
amount equal to the Repurchase Value of such award.
11. SECTION AMENDMENT AND TERMINATION.
---------------------------------
The Board may at any time, and from time to time, amend alter, suspend or
discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made that would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.
12. SECTION TERM OF PLAN.
--------------------
12.1 EFFECTIVE DATE. The Plan was initially effective as of December 18,
2002, and materially amended on January 29, 2004. Unless the Plan is approved by
the Company's stockholders within one year of the Effective Date, all Incentive
Stock Options shall automatically be converted into Non-Qualified Stock Options.
12.2 TERMINATION DATE. Unless terminated by the Board, this Plan shall
continue to remain effective until such time as no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may be made only during the
ten-year period following the Effective Date.
13. SECTION GENERAL PROVISIONS.
--------------------------
13.1 WRITTEN AGREEMENTS. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms, of the Agreement executed by
the Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
13.2 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
13.3 EMPLOYEES.
---------
(a) ENGAGING IN COMPETITION WITH THE COMPANY; DISCLOSURE OF
CONFIDENTIAL INFORMATION. If a Holder's employment with the Company or
a Subsidiary is terminated for any reason whatsoever, and within three
months after the date thereof such Holder either (i) accepts
employment with any competitor of, or otherwise engages in competition
with, the Company or (ii) discloses to anyone outside the Company or
uses any confidential information or material of the Company in
violation of the Company's policies or any agreement between the
Holder and the Company, the Committee, in its sole discretion, may
9
terminate any outstanding Stock Option and may require such Holder to
return to the Company the economic value of any award that was
realized or obtained by such Holder at any time during the period
beginning on that date that is six months prior to the date such
Holder's employment with the Company is terminated.
(b) TERMINATION FOR CAUSE. The Committee may, if a Holder's
employment with the Company or a Subsidiary is terminated for cause,
annul any award granted under this Plan to such employee and, in such
event, the Committee, in its sole discretion, may require such Holder
to return to the Company the economic value of any award that was
realized or obtained by such Holder at any time during the period
beginning on that date that is six months prior to the date such
Holder's employment with the Company is terminated.
(c) NO RIGHT OF EMPLOYMENT. Nothing contained in the Plan or in
any award hereunder shall be deemed to confer upon any Holder who is
an employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, nor shall it interfere
in any way with the right of the Company or any Subsidiary to
terminate the employment of any Holder who is an employee at any time.
13.4 INVESTMENT REPRESENTATIONS; COMPANY POLICY. The Committee may require
each person acquiring shares of Common Stock pursuant to a Stock Option or other
award under the Plan to represent to and agree with the Company in writing that
the Holder is acquiring the shares for investment without a view to distribution
thereof. Each person acquiring shares of Common Stock pursuant to a Stock Option
or other award under the Plan shall be required to abide by all policies of the
Company in effect at the time of such acquisition and thereafter with respect to
the ownership and trading of the Company's securities.
13.5 ADDITIONAL INCENTIVE ARRANGEMENTS. Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements
as it may deem desirable, including, but not limited to, the granting of Stock
Options and the awarding of Common Stock and cash otherwise than under the Plan;
and such arrangements may be either generally applicable or applicable only in
specific cases.
13.6 WITHHOLDING TAXES. Not later than the date as of which an amount must
first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.
13.7 GOVERNING LAW. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Florida. All matters relating to or involving corporate law shall be
governed by the laws of the State of Indiana.
13.8 OTHER BENEFIT PLANS. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
13.9 NON-TRANSFERABILITY. Except as otherwise expressly provided in the
Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
10
13.10 APPLICABLE LAWS. The obligations of the Company with respect to all
Stock Options and awards under the Plan shall be subject to (i) all applicable
laws, rules and regulations and such approvals by any governmental agencies as
may be required, including, without limitation, the Securities Act of 1933, as
amended, and (ii) the rules and regulations of any securities exchange on which
the Common Stock may be listed.
13.11 CONFLICTS. If any of the terms or provisions of the Plan or an
Agreement conflict with the requirements of Section 422 of the Code as they
apply to Incentive Stock Options, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with such requirements. Additionally,
if this Plan or any Agreement does not contain any provision required to be
included herein under Section 422 of the Code, such provision shall be deemed to
be incorporated herein and therein with the same force and effect as if such
provision had been set out at length herein and therein. If any of the terms or
provisions of any Agreement conflict with any terms or provisions of the Plan,
then such terms or provisions shall be deemed inoperative to the extent they so
conflict with the requirements of the Plan. Additionally, if any Agreement does
not contain any provision required to be included therein under the Plan, such
provision shall be deemed to be incorporated therein with the same force and
effect as if such provision had been set out at length therein.
13.12 NON-REGISTERED STOCK. The shares of Common Stock to be distributed
under this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Common Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Common Stock on a national securities
exchange or any other trading or quotation system, including the Nasdaq National
Market and Nasdaq SmallCap Market.
TELECOM COMMUNICATIONS, INC.
By:__________________________________
Fred Chiyuan Deng, President
PLAN AMENDMENTS
DATE APPROVED
DATE APPROVED BY STOCKHOLDERS, IF DESCRIPTION OF
BY BOARD NECESSARY SECTIONS AMENDED AMENDMENTS
January 29, 2004 January 29, 2004 1.2(q), 3.1, 5.2(b), Increase to 5,500,000 shares
12.1, 13.3(a) and technical
amendments