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EXHIBIT 10.1
LONG DISTANCE DIRECT HOLDINGS, INC.
1998 EQUITY INCENTIVE PLAN
ARTICLE I
PURPOSE OF PLAN
The Company has adopted this Plan to promote the interests of the Company
and its stockholders by using common stock of the Company to attract, retain and
motivate its management and other persons, to encourage and reward their
contributions to the performance of the Company, and to align their interests
with the interests of the Company's stockholders. Capitalized terms not
otherwise defined herein have the meanings ascribed to them in Article VII.
ARTICLE II
EFFECTIVE DATE AND TERM OF PLAN
2.1 Term of Plan. This Plan became effective as of the Effective Date and
will continue in effect until the Expiration Date, at which time this Plan will
automatically terminate.
2.2 Effect on Awards. Awards may be granted only during the Plan Term, but
each Award granted during the Plan Term will remain in effect after the
Expiration Date until such Award has been exercised, terminated or expired in
accordance with its terms and the terms of this Plan.
ARTICLE III
SHARES SUBJECT TO PLAN
3.1 Number of Shares. The maximum number of shares of Common Stock that
may be issued pursuant to Awards under this Plan is 2,000,000, subject to
adjustment as set forth in Section 3.4.
3.2 Source of Shares. The Common Stock to be issued under this Plan will
be made available from authorized but unissued shares of Common Stock.
3.3 Availability of Unused Shares. Shares of Common Stock subject to
unexercised portions of any Award that expire, terminate or are canceled will
again become available for the grant of further Awards under this Plan as part
of the shares available under Section 3.1.
3.4 Adjustment Provisions.
(a) Adjustments. If the Company consummates any Reorganization in
which holders of shares of Common Stock are entitled to receive in respect of
such shares any additional shares or new or different shares or securities, cash
or other consideration (including, without limitation, a different number of
shares of Common Stock), or if the outstanding shares of Common
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Stock are increased, decreased or exchanged for a different number or kind of
shares or other securities through merger, consolidation, sale or exchange of
assets of the Company, reorganization, recapitalization, reclassification,
combination, stock dividend, stock split, reverse stock split, spin-off, or
similar transaction, then an appropriate and proportionate adjustment shall be
made by the Administrator in its discretion in: (1) the maximum number and kind
of shares subject to this Plan as provided in Section 3.1; (2) the number and
kind of shares or other securities subject to then outstanding Awards; and/or
(3) the price for each share or other unit of any other securities subject to,
or measurement criteria applicable to, then outstanding Awards.
(b) No Fractional Interests. No fractional interests will be issued
under the Plan resulting from any adjustments.
(c) Adjustments Related to Company Stock. To the extent any
adjustments relate to stock or securities of the Company, such adjustments will
be made by the Administrator, whose determination in that respect will be final,
binding and conclusive.
(d) Right to Make Adjustment. The grant of an Award will not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
3.5 Reservation of Shares. The Company will at all times reserve and keep
available shares of Common Stock equaling at least the total number of shares of
Common Stock issuable pursuant to all outstanding Awards.
ARTICLE IV
ADMINISTRATION OF PLAN
4.1 Administrator.
(a) Plan Administration. This Plan will be administered by the Board
and may also be administered by a Committee of the Board appointed pursuant to
Section 4. 1(b).
(b) Administration by Committee. The Board in its sole discretion
may from time to time appoint a Committee of not less than two (2) Board members
with authority to administer this Plan in whole or part and, subject to
applicable law, to exercise any or all of the powers, authority and discretion
of the Board under this Plan. The Board may from time to time increase or
decrease (but not below two (2)) the number of members of the Committee, remove
from membership on the Committee all or any portion of its members, and/or
appoint such person or persons as it desires to fill any vacancy existing on the
Committee, whether caused by removal, resignation or otherwise. The Board may
disband the Committee at any time.
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4.2 Authority of Administrator.
(a) Authority to Interpret Plan. Subject to the express provisions
of this Plan, the Administrator will have the power to implement, interpret and
construe this Plan and any Awards and Award Documents or other documents
defining the rights and obligations of the Company and Recipients hereunder and
thereunder, to determine all questions arising hereunder and thereunder, and to
adopt and amend such rules and regulations for the administration hereof and
thereof as it may deem desirable. The interpretation and construction by the
Administrator of any provisions of this Plan or of any Award or Award Document,
and any action taken by, or inaction of, the Administrator relating to this Plan
or any Award or Award Document, will be within the discretion of the
Administrator and will be conclusive and binding upon all persons. Subject only
to compliance with the express provisions hereof, the Administrator may act in
its discretion in matters related to this Plan and any and all Awards and Award
Documents.
(b) Authority to Grant Awards. Subject to the express provisions of
this Plan, the Administrator may from time to time in its discretion select the
Eligible Persons to whom, and the time or times at which, Awards will be granted
or sold, the nature of each Award, the number of shares of Common Stock or the
number of rights that make up or underlie each Award, the exercise price and
period (if applicable) for the exercise of each Award, and such other terms and
conditions applicable to each individual Award as the Administrator may
determine. Any and all terms and conditions of Awards may be established by the
Administrator without regard to existing Awards or other grants and without
incurring any obligation of the Company in respect of subsequent Awards. The
Administrator may grant at any time new Awards to an Eligible Person who has
previously received Awards or other grants (including other stock options)
regardless of the status of such other Awards or grants. The Administrator may
grant Awards singly or in combination or in tandem with other Awards as it
determines in its discretion.
(c) Procedures. Subject to the Company's charter or bylaws or any
Board resolution conferring authority on the Committee, any action of the
Administrator with respect to the administration of this Plan must be taken
pursuant to a majority vote of the authorized number of members of the
Administrator or by the unanimous written consent of its members; provided,
however, that (i) if the Administrator is the Committee and consists of two (2)
members, then actions of the Administrator must be unanimous, and (ii) actions
taken by the Board will be valid if approved in accordance with applicable law.
4.3 No Liability. No member of the Board or the Committee or any designee
thereof will be liable for any action or inaction with respect to this Plan or
any Award or any transaction arising under this Plan or any Award except in
circumstances constituting bad faith of such member.
4.4 Amendments.
(a) Plan Amendments. The Administrator may at any time and from time
to time in its discretion, insofar as permitted by applicable law, rule or
regulation and subject to Section
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4.4(c), suspend or discontinue this Plan or revise or amend it in any respect
whatsoever, and this Plan as so revised or amended will govern all Awards,
including those granted before such revision or amendment. Without limiting the
generality of the foregoing, the Administrator is authorized to amend this Plan
to comply with or take advantage of amendments to applicable. laws, rules or
regulations, including the Securities Act, the Exchange Act, the IRC, or the
rules of any exchange or market system upon which the Common Stock is listed or
trades, or any rules or regulations promulgated thereunder. No stockholder
approval of any amendment or revision will be required unless such approval is
required by applicable law, rule or regulation.
(b) Award Amendments. The Administrator may at any time and from
time to time in its discretion, subject to Section 4.4(c) and compliance with
applicable statutory or administrative requirements, accelerate or extend the
vesting or exercise period of any Award as a whole or in part, and make such
other modifications in the terms and conditions of an Award as it deems
advisable.
(c) Limitation. Except as otherwise provided in this Plan or in the
applicable Award Document, no amendment, revision, suspension or termination of
this Plan or an outstanding Award that would alter, impair or diminish in any
material respect any rights or obligations under any Award theretofore granted
under this Plan may be effected without the written consent of the Recipient to
whom such Award was granted.
4.5 Other Compensation Plans. The adoption of this Plan will not affect
any other stock option, incentive or other compensation plans in effect from
time to time for the Company, and this Plan will not preclude the Company from
establishing any other forms of incentive or other compensation for employees,
directors, advisors or consultants of the Company, whether or not approved by
stockholders.
4.6 Plan Binding on Successors. This Plan will be binding upon the
successors and assigns of the Company.
4.7 References to Successor Statutes, Regulations and Rules. Any reference
in this Plan to a particular statute, regulation or rule will also refer to any
successor provision of such statute, regulation or rule.
4.8 Invalid Provisions. In the event that any provision of this Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability is not to be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions are to be given full force and effect to the same extent as though
the invalid and unenforceable provision were not contained herein.
4.9 Interpretation. Headings herein are for convenience of reference only,
do not constitute a part of this Plan, and will not affect the meaning or
interpretation of this Plan. References herein to Sections or Articles are
references to the referenced Section or Article hereof,
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unless otherwise specified.
ARTICLE V
GENERAL AWARD PROVISIONS
5.1 Eligibility to Receive Awards. A person is eligible to receive grants
of Awards if, at the time of the grant of the Award, such person is an Eligible
Person or has received an offer of employment from the Company, provided that
Awards granted to a person who has received an offer of employment will
terminate and be forfeited without consideration if the employment offer is not
accepted within such time as may be specified by the Company. Status as an
Eligible Person will not be construed as a commitment that any Award will be
granted under this Plan to an Eligible Person or to Eligible Persons generally.
5.2 Award Documents. Each Award must be evidenced by an agreement duly
executed on behalf of the Company and by the Recipient or, in the
Administrator's discretion, a confirming memorandum issued by the Company to the
Recipient, setting forth such terms and conditions applicable to the Award as
the Administrator may in its discretion determine. Awards will not be deemed
made or binding upon the Company, and Recipients will have no rights thereto,
until such an agreement is entered into between the Company and the Recipient or
such a memorandum is delivered by the Company to the Recipient, but an Award may
have an effective date prior to the date of such an agreement or memorandum.
Award Documents may be (but need not be) identical and must comply with and be
subject to the terms and conditions of this Plan, a copy of which will be
provided to each Recipient and incorporated by reference into each Award
Document. Any Award Document may contain such other terms, provisions and
conditions not inconsistent with this Plan as may be determined by the
Administrator. In case of any conflict between this Plan and any Award Document,
this Plan shall control.
5.3 Payment For Awards.
(a) Payment of Exercise Price. The exercise price or other payment
for an Award is payable upon the exercise of a Stock Option or upon other
purchase of shares pursuant to an Award granted hereunder by delivery of legal
tender of the United States or payment of such other consideration as the
Administrator may from time to time deem acceptable in any particular instance;
provided, however, that the Administrator may, in the exercise of its'
discretion, allow exercise of an Award in a broker-assisted or similar
transaction in which the exercise price is not received by the Company until
promptly after exercise.
(b) Company Assistance. The Company may assist any person to whom an
Award is granted (including, without limitation, any officer or director of the
Company) in the payment of the purchase price or other amounts payable in
connection with the receipt or exercise of that Award, by lending such amounts
to such person on such terms and at such rates of interest and upon such
security (if any) as may be consistent with applicable law and approved by the
Administrator. In case of such a loan, the Administrator may require that the
exercise be followed
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by a prompt sale of some or all of the underlying shares and that a portion of
the sale proceeds be dedicated to full payment of the exercise price and amounts
required pursuant to Section 5.1 0.
(c) Cashless Exercise. If permitted in any case by the Administrator
in its discretion, the exercise price for Awards may be paid by capital stock of
the Company delivered and transferred to the Company by or on behalf of the
person exercising the Award and duly endorsed in blank or accompanied by stock
powers duly endorsed in blank, with signatures guaranteed if required by the
Administrator; or retained by the Company from the stock otherwise issuable upon
exercise or surrender of vested and/or exercisable Awards or other equity awards
previously granted to the Recipient and being exercised (if applicable) (in
either case valued at Fair Market Value as of the exercise date); or such other
consideration as the Administrator may from time to time in the exercise of its
discretion deem acceptable in any particular instance.
(d) No Precedent. Recipients will have no rights to the assistance
described in Section 5.3(b) or the exercise techniques described in Section
5.3(c), and the Company may offer or permit such assistance or techniques on an
ad hoc basis to any Recipient without incurring any obligation to offer or
permit such assistance or techniques on other occasions or to other Recipients.
5.4 No Employment Rights. Nothing contained in this Plan (or in Award
Documents or in any other documents related to this Plan or to Awards) will
confer upon any Eligible Person or Recipient any right to continue in the employ
of or engagement by the Company or any Affiliated Entity or constitute any
contract or agreement of employment or engagement, or interfere in any way with
the right of the Company or any Affiliated Entity to reduce such person's
compensation or other benefits or to terminate the employment or engagement of
such Eligible Person or Recipient, with or without cause. Except as expressly
provided in this Plan or in any statement evidencing the grant of an Award, the
Company has the right to deal with each Recipient in the same manner as if this
Plan and any such statement evidencing the grant of an Award did not exist,
including, without limitation, with respect to all matters related to the
hiring, discharge, compensation and conditions of the employment or engagement
of the Recipient. Unless otherwise set forth in a written agreement binding upon
the Company or an Affiliated Entity, all employees of the Company or an
Affiliated Entity are "at will" employees whose employment may be terminated by
the Company or the Affiliated Entity at any time for any reason or no reason,
without payment or penalty of any kind. Any question(s) as to whether and when
there has been a termination of a Recipient's employment or engagement, the
reason (if any) for such termination, and/or the consequences thereof under the
terms of this Plan or any statement evidencing the grant of an Award pursuant to
this Plan will be determined by the Administrator and the Administrator's
determination thereof will be final and binding.
5.5 Restrictions Under Applicable Laws and Regulations.
(a) Government Approvals. All Awards will be subject to the
requirement that, if at any time the Company determines, in its discretion, that
the listing, registration or qualification of the securities subject to Awards
granted under this Plan upon any securities exchange or
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interdealer quotation system or under any federal, state or foreign law, or the
consent or approval of any government or regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such an
Award or the issuance, if any, or purchase of shares in connection therewith,
such Award may not be exercised as a whole or in part unless and until such
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Company. During the term
of this Plan, the Company will use its reasonable efforts to seek to obtain from
the appropriate governmental and regulatory agencies any requisite
qualifications, consents, approvals or authorizations in order to issue and sell
such number of shares of its Common Stock as is sufficient to satisfy the
requirements of this Plan. The inability of the Company to obtain any such
qualifications, consents, approvals or authorizations will relieve the Company
of any liability in respect of the nonissuance or sale of such stock as to which
such qualifications, consents, approvals or authorizations pertain.
(b) No Registration Obligation: Recipient Representations. The
Company will be under no obligation to register or qualify the issuance of
Awards or underlying securities under the Securities Act or applicable state
securities laws. Unless the issuance of Awards and underlying securities have
been registered under the Securities Act and qualified or registered under
applicable state securities laws, the Company shall be under no obligation to
issue any Awards or underlying securities unless the Awards and underlying
securities may be issued pursuant to applicable exemptions from such
registration or qualification requirements. In connection with any such exempt
issuance, the Administrator may require the Recipient to provide a written
representation and undertaking to the Company, satisfactory in form and scope to
the Company, that such Recipient is acquiring such Awards and underlying
securities for such Recipient's own account as an investment and not with a view
to, or for sale in connection with, the distribution of any such securities, and
that such person will make no transfer of the same except in compliance with any
rules and regulations in force at the time of such transfer under the Securities
Act and other applicable law, and that if securities are issued without
registration, a legend to this effect (together with any other legends deemed
appropriate by the Administrator) may be endorsed upon the securities so issued,
and to the effect of any additional representations that are appropriate in
light of applicable securities laws and rules. The Company may also order its
transfer agent to stop transfers of such shares. The Administrator may also
require the Recipient to provide the Company such information and other
documents as the Administrator may request in order to satisfy the Administrator
as to the investment sophistication and experience of the Recipient and as to
any other conditions for compliance with any such exemptions from registration
or qualification.
5.6 Agreement with Company and Additional Conditions. Unless otherwise
determined by the Company in any particular case, each Award consisting of
equity securities or securities convertible or exercisable for equity securities
shall be contingent upon the Recipient thereof, as a condition (which may be
waived in any case by the Company) to the Company's issuance of equity
securities to the Recipient pursuant to the Award, entering into a written
agreement with the Company in a form specified by the Administrator. Any Award
may also be subject to such other provisions (whether or not applicable to any
other Award or Recipient) as the Administrator deems appropriate, including
without limitation provisions for the forfeiture of or
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restrictions on resale or other disposition of securities of the Company
acquired under this Plan, provisions giving the Company the right to repurchase
securities of the Company acquired under this Plan in the event the Recipient
leaves the Company for any reason or elects to effect any disposition thereof,
and provisions to comply with federal and state securities laws.
5.7 No Privileges re Stock Ownership or Specific Assets. Except as
otherwise set forth herein, a Recipient or a permitted transferee of an Award
will have no rights as a shareholder with respect to any shares issuable or
issued in connection with the Award until the Recipient has delivered to the
Company all amounts payable and performed all obligations required to be
performed in connection with exercise of the Award and the Company has issued
such shares. No person will have any right, title or interest in any fund or in
any specific asset (including shares of capital stock) of the Company by reason
of any Award granted hereunder. Neither this Plan (or any documents related
hereto) nor any action taken pursuant hereto is to be construed to create a
trust of any kind or a fiduciary relationship between the Company and any
person. To the extent that any person acquires a right to receive an Award
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.
5.8 Nonassignability. No Award is assignable or transferable except: (a)
by will or by the laws of descent and distribution; or (b) upon dissolution of
marriage pursuant to a qualified domestic relations order. During the lifetime
of a Recipient, an Award granted to such person will be exercisable only by the
Recipient (or the Recipient's permitted transferee) or such person's guardian or
legal representative.
5.9 Information To Recipients. The Administrator in its sole discretion
may determine what, if any, financial and other information is to be provided to
Recipients and when such financial and other information is to be provided after
giving consideration to applicable federal and state laws, rules and
regulations, including, without limitation, applicable federal and state
securities laws, rules and regulations.
5.10 Withholding Taxes. Whenever the granting, vesting or exercise of any
Award, or the issuance of any securities upon exercise of any Award or transfer
thereof, gives rise to tax or tax withholding liabilities or obligations, the
Administrator will have the right as a condition thereto to require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements arising in connection therewith.
The Administrator may, in the exercise of its discretion, allow satisfaction of
tax withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable in connection with an
Award, in each case valued at Fair Market Value as of the date of such delivery
or withholding, as the case may be.
5.11 Legends on Awards and Stock Certificates. Each Award Document and
each certificate representing securities acquired upon vesting or exercise of an
Award must be endorsed with all legends, if any, required by applicable federal
and state securities and other laws to be placed on the Award Document and/or
the certificate. The Award Documents and share certificates may
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also contain legends reflecting the restrictions and rights contained in any
written agreement between the Recipient and the Company as long as such
restrictions and rights are applicable. The determination of which legends, if
any, will be placed upon Award Documents or the certificates will be made by the
Administrator in its discretion and such decision will be final and binding.
5.12 Effect of Termination of Employment on Awards.
(a) Termination of Vesting. Notwithstanding anything to the contrary
herein, but subject to Section 4.4(b), Awards will be exercisable by a Recipient
(or the Recipient's successor in interest) following such Recipient's
termination of employment only to the extent that installments thereof had
become exercisable on or prior to the date of such termination.
(b) Leave of Absence. In the case of any employee on an approved
leave of absence, the Administrator may make such provision respecting
continuance of Awards granted to such employee as the Administrator in its
discretion deems appropriate, except that in no event will an Award be
exercisable after the date such Award would expire in accordance with its terms
had the Recipient remained continuously employed.
5.13 Restrictions on Common Stock and Other Securities. Common Stock or
other securities of the Company issued or issuable in connection with any Award
will be subject to all of the restrictions imposed under this Plan upon Common
Stock issuable or issued upon exercise of Stock Options, except as otherwise
determined by the Administrator.
ARTICLE VI
AWARDS
6.1 Stock Options.
(a) Nature of Stock Options. All Stock Options granted hereunder
shall be Nonqualified Stock Options.
(b) Option Exercise Price. The exercise price for each Stock Option
will be determined by the Administrator as of the date such Stock Option is
granted. Subject to Section 4.4(b), the exercise price may be greater than or
less than the Fair Market Value of the Common Stock subject to the Stock Option
as of the date of grant, provided that in no event may the exercise price per
share be less than the par value, if any, per share of the Common Stock subject
to the Stock Option.
(c) Option Period and Vesting. Stock Options granted hereunder will
vest and may be exercised as determined by the Administrator. Each Stock Option
granted hereunder and all rights or obligations thereunder shall expire on such
date as may be determined by the Administrator, but not later than ten (10)
years after the date the Stock Option is granted and may
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be subject to earlier termination as provided herein or in the Award Document.
Except as otherwise provided herein, a Stock Option will become exercisable, as
a whole or in part, on the date or dates specified by the Administrator and
thereafter will remain exercisable until the exercise, expiration or earlier
termination of the Stock Option.
(d) Exercise of Stock Options. The exercise price for Stock Options
will be paid as set forth in Section 5.3. No Stock Option will be exercisable
except in respect of whole shares, and fractional share interests shall be
disregarded. Not fewer than 100 shares of Common Stock may be purchased at one
time and Stock Options must be exercised in multiples of 100 unless the number
purchased is the total number of shares for which the Stock Option is
exercisable at the time of exercise. A Stock Option will be deemed to be
exercised when the Secretary or other designated official of the Company
receives written notice of such exercise from the Recipient in a form specified
by the Administrator, together with payment of the exercise price in accordance
with Section 5.3 and any amounts required under Section 5.10 or, with permission
of the Administrator, arrangement for such payment. Notwithstanding any other
provision of this Plan, the Administrator may impose, by rule and/or in Award
Documents, such conditions upon the exercise of Stock Options (including,
without limitation, conditions limiting the time of exercise to specified
periods) as may be required to satisfy applicable regulatory requirements,
including, without limitation, Rule 16b-3 and Rule 10b-5 under the Exchange Act,
and any amounts required under Section 5.10, or any applicable section of or
regulation under the IRC.
(e) Termination of Employment.
(i) Termination for Just Cause. Subject to Section 4.4(b) and
except as otherwise provided in a written agreement between the Company or an
Affiliated Entity and the Recipient, which may be entered into at any time
before or after termination of employment, in the event of a Just Cause
Dismissal of a Recipient all of the Recipient's unexercised Stock Options,
whether or not vested, will expire and become unexercisable as of the date of
such Just Cause Dismissal.
(ii) Termination Other Than for Just Cause. Subject to Section
4.4(b) and except as otherwise provided in a written agreement between the
Company or an Affiliated Entity and the Recipient, which may be entered into at
any time before or after termination of employment, if a Recipient's employment
with the Company or any Affiliated Entity terminates for:
(A) any reason other than for Just Cause Dismissal,
death, Permanent Disability or Retirement, all of the Recipient's unexercised
Stock Options, whether or not vested, will expire and become unexercisable as of
the earlier of (A) the date such Stock Options would expire in accordance with
their terms had the Recipient remained employed; and (B) 180 days after the date
of employment termination.
(B) death or Permanent Disability or Retirement, all of
the Recipient's unexercised Stock Options, whether or not vested, will expire
and become unexercisable
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as of the earlier of (A) the date such Stock Options would expire in accordance
with their terms had the Recipient remained employed; and (B) 365 days after the
date of employment termination.
6.2 Stock Bonuses. The Administrator may issue Stock Bonuses to Eligible
Persons on such terms and conditions as the Administrator may determine.
6.3 Stock Sales. The Administrator may sell to Eligible Persons shares of
Common Stock on such terms and conditions and for any valid consideration under
applicable law, including services rendered to the Company or an Affiliated
Entity, as the Administrator may determine.
ARTICLE VII
DEFINITIONS
Capitalized terms used in this Plan and not otherwise defined have the
meanings set forth below:
"Administrator" means the Board as long as no Committee has been appointed
and is in effect and also means the Committee to the extent that the Board has
delegated authority thereto.
"Affiliated Entity" means any Parent Corporation of the Company or
Subsidiary Corporation of the Company or any other entity controlling,
controlled by, or under common stock with the Company.
"Award" means any Stock Option, Stock Bonus or Stock Sale granted or sold
to an Eligible Person under this Plan.
"Award Document" means the agreement or confirming memorandum setting
forth the terms and conditions of an Award.
"Board" means the Board of Directors of the Company.
"Committee" means any committee appointed by the Board to administer this
Plan pursuant to Section 4. 1.
"Common Stock" means the common stock of the Company, as constituted on
the Effective Date, and as thereafter adjusted under Section 3.4.
"Company" means Long Distance Direct Holdings, Inc., a Nevada corporation.
"Effective Date" means July 10, 1998, which is the date this Plan was
adopted by the Board.
"Eligible Person" includes directors, officers, employees, consultants and
advisors of the
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Company or of any Affiliated Entity.
"Expiration Date" means the tenth (10th) anniversary of the Effective
Date.
"Fair Market Value" of a share of the Company's capital stock as of a
particular date means: (i) if the stock is listed on an established stock
exchange or exchanges (including for this purpose, the Nasdaq National Market),
the mean of the highest and lowest sale prices of the stock on the date in
question on the primary exchange upon which the stock trades, as published in
The Wall Street Journal, or, if no sale price was quoted for such date, then as
of the next preceding date on which such a sale price was quoted; or (ii) if the
stock is not then listed on an exchange or the Nasdaq National Market, the
average of the closing bid and asked prices per share for the stock in the
over-the-counter market on the date in question; or (iii) if the stock is not
then listed on an exchange or quoted in the over-the-counter market, an amount
determined in good faith by the Administrator. The Fair Market Value of rights
or property other than capital stock of the Company means the fair market value
thereof as determined by the Administrator on the basis of such factors as it
may deem appropriate.
"Incentive Stock Option" means a Stock Option that qualifies as an
incentive stock option under Section 422 of the IRC.
"IRC" means the Internal Revenue Code of 1986, as amended.
"Just Cause Dismissal" means a termination of a Recipient's employment by
and/or service to the Company (or if the Recipient is a director, removal of the
Recipient from the Board by action of the stockholders or, if permitted by
applicable law and the by-laws of the Company, the other directors), in
connection with the good faith determination of the Company's board of directors
(or of the Company's stockholders if the Recipient is a director and the removal
of the Recipient from the Board is by action of the stockholders, but in either
case excluding the vote of the Recipient if he or she is a director or a
stockholder) that the Recipient has engaged in any acts involving dishonesty or
moral turpitude or in any acts that materially and adversely affect the
business, affairs or reputation of the Company or its subsidiaries; provided,
however, that if a Recipient is party to an employment agreement with the
Company or any Affiliated Entity providing for just cause dismissal (or some
comparable concept) of Recipient from Recipient's employment with the Company or
any Affiliated Entity, "Just Cause Dismissal" for purposes of this Plan will
have the same meaning as ascribed thereto or to such comparable concept in such
employment agreement.
"Nonqualified Stock Option" means a Stock Option that is not an Incentive
Stock Option.
"Parent Corporation" means any Parent Corporation as defined in Section
424(e) of the IRC.
"Permanent Disability" means that the Recipient becomes physically or
mentally incapacitated or disabled so that the Recipient is unable to perform
substantially the same services
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as the Recipient performed prior to incurring such incapacity or disability (the
Company, at its option and expense, being entitled to retain a physician to
confirm the existence of such incapacity or disability, and the determination of
such physician to be binding upon the Company and the Recipient), and such
incapacity or disability continues for a period of three (3) consecutive months
or six (6) months in any 12-month period or such other period(s) as may be
determined by the Administrator with respect to any Award.
"Person" means any person, entity or group, within the meaning of Section
13(d) or 14(d) of the Exchange Act, but excluding (i) the Company and its
subsidiaries, (ii) any employee stock ownership or other employee benefit plan
maintained by the Company and (iii) an underwriter or underwriting syndicate
that has acquired the Company's securities solely in connection with a public
offering thereof.
"Plan" means this 1998 Equity Incentive Plan of the Company.
"Plan Term" means the period during which this Plan remains in effect
(commencing the Effective Date and ending on the Expiration Date).
"Recipient" means a person who has received an Award.
"Reorganization" means any merger, consolidation or other reorganization.
"Retirement" of a Recipient means the Recipient's resignation from the
Company or any Affiliated Entity after reaching age 60 and at least five years
of full-time employment by the Company or any Affiliated Entity without any
circumstances that would justify a Just Cause Dismissal of the Recipient.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Bonus" means an issuance or delivery of shares of Common Stock
under Section 6.2 as a bonus for services rendered or for any other valid
consideration under applicable law.
"Stock Option" means a right to purchase stock of the Company granted
under Section 6.1 of this Plan.
"Stock Sale" means a sale of Common Stock to an Eligible Person under
Section 6.3.
"Subsidiary Corporation" means any Subsidiary Corporation as defined in
Section 424(f) of the IRC.
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