EXHIBIT 10.4
BINDVIEW DEVELOPMENT CORPORATION
1998 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN
(AS AMENDED THROUGH SEPTEMBER 2, 2003 AND
APPROVED BY THE SHAREHOLDERS ON MAY 27, 2004)
BINDVIEW DEVELOPMENT CORPORATION
1998 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN
TABLE OF CONTENTS
Page
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1. PURPOSE ............................................................................................ 1
2. EFFECTIVE DATE OF PLAN ............................................................................. 1
3. ADMINISTRATION ..................................................................................... 1
4. DEDICATED SHARES ................................................................................... 1
5. GRANT OF OPTIONS ................................................................................... 1
6. ELIGIBILITY ........................................................................................ 1
7. OPTION GRANT SIZE AND GRANT DATES .................................................................. 2
8. OPTION PRICE; FAIR MARKET VALUE .................................................................... 2
9. DURATION OF OPTIONS ................................................................................ 2
10. AMOUNT EXERCISABLE ................................................................................. 2
11. EXERCISE OF OPTIONS ................................................................................ 4
12. NON-TRANSFERABILITY OF OPTIONS ..................................................................... 5
13. TERMINATION OF DIRECTORSHIP OF OPTIONEE ............................................................ 5
14. REQUIREMENTS OF LAW ................................................................................ 5
15. NO RIGHTS AS STOCKHOLDER ........................................................................... 6
16. NO OBLIGATION TO RETAIN OPTIONEE ................................................................... 6
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE ......................................................... 6
18. TERMINATION AND AMENDMENT OF PLAN .................................................................. 8
19. WRITTEN AGREEMENT .................................................................................. 9
20. INDEMNIFICATION OF BOARD ........................................................................... 9
21. FORFEITURES ........................................................................................ 9
22. RESTRICTED STOCK AWARDS ............................................................................ 9
23. GENDER ............................................................................................. 12
24. HEADINGS ........................................................................................... 12
25. GOVERNING LAW ...................................................................................... 12
BINDVIEW DEVELOPMENT CORPORATION
1998 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN
1. PURPOSE. The BindView Development Corporation 1998 Non-Employee
Director Incentive Plan (the "Plan") of BindView Development Corporation (the
"Company") is for the benefit of members of the Board of Directors of the
Company who, at the time of their service, are not employees of the Company or
any of its affiliates, by providing them an opportunity to become owners of the
Common Stock, no par value, of the Company (the "Stock"), thereby advancing the
best interests of the Company by increasing their proprietary interest in the
success of the Company and encouraging them to continue in their present
capacity.
2. EFFECTIVE DATE OF PLAN. The Plan is effective January 5, 1998, if
within one year of that date it shall have been approved by the holders of at
least a majority of the outstanding shares of voting stock of the Company voting
in person or by proxy at a duly held shareholders' meeting, or if the provisions
of the corporate charter, bylaws or applicable state law prescribes a greater
degree of shareholder approval for this action, the approval by the holders of
that percentage, at a duly held meeting of shareholders, or in either case by a
consent in lieu of a meeting if permitted by the corporate charter, bylaws and
applicable law.
3. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). Subject to the terms of the Plan, the
Board shall have the power to construe the provisions of the Plan, Options,
Restricted Stock (as defined in Paragraph 22 below), and Stock issued hereunder,
to determine all questions arising hereunder, and to adopt and amend such rules
and regulations for administering the Plan as the Board deems desirable.
4. DEDICATED SHARES. Effective upon shareholder approval at the Company's
2004 annual meeting, the total number of shares of Stock with respect to which
Initial Grants or Annual Grants (collectively, the "Options") may be granted
under this Plan shall not exceed, in the aggregate one million (1,000,000)
shares; provided, that the class and aggregate number of shares of Stock which
may be granted hereunder shall be subject to adjustment in accordance with the
provisions of Paragraph 17. The shares of Stock may be treasury shares or
authorized but unissued shares of Stock. In the event that any outstanding
Option shall expire or is terminated or canceled for any reason, the shares of
Stock allocable to the unexercised portion of that Option may again be subject
to an Option or Options under the Plan.
5. GRANT OF OPTIONS. All Options granted under the Plan shall be
Nonqualified Options which are not intended to satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). No
options shall be granted under the Plan subsequent to January 4, 2008.
6. ELIGIBILITY. The individuals who shall be eligible to receive Options
under the Plan shall be each member of the Board who is not an employee of the
Company or any affiliate of the Company ("Eligible Director").
7. OPTION GRANT SIZE AND GRANT DATES. On the day the Eligible Director is
first elected or appointed to be a director (whichever is applicable), the
Eligible Director shall be granted an Option to purchase up to 100,000 shares of
Stock on the terms and conditions set forth herein (an "Initial Grant").
In each calendar year, on or after the annual meeting of the
Company's shareholders, each Eligible Director who was a director at the time
of, and continues to serve as a director after, such annual meeting, may be
granted an Option to purchase up to 25,000 shares of Stock on the terms and
conditions set forth herein (an "Annual Grant").
Subject only to any applicable limitations set out in this Plan, the
number of shares of Stock to be covered by any Option granted to an Eligible
Director shall be as determined by the Board. Notwithstanding the provisions of
Section 17, the number of shares of Stock which may subsequently be awarded
pursuant to this Section 7 shall not increase but may be decreased if
appropriate under Section 17. If service of an Eligible Director who previously
received an Initial Grant terminates and the Director is subsequently elected or
appointed to the Board, that Director shall not be eligible to receive a second
Initial Grant.
If the General Counsel of the Company determines, in his sole
discretion, that the Company is in possession of material, nonpublic information
about the Company or any of its subsidiaries, he may suspend granting of the
Initial Grant or Annual Grant to each Eligible Director until the second trading
day after public dissemination of that information, and the determination by the
General Counsel that issuance of the Options is then appropriate.
8. OPTION PRICE; FAIR MARKET VALUE. The price at which shares of Stock may
be purchased by each Eligible Director (the "Optionee") pursuant to his Initial
Grant or Annual Grant, shall be 100% of the "Fair Market Value" of the shares of
Stock on the date of grant of the Initial Grant or Annual Grant, as applicable.
For all purposes of this Plan, the "Fair Market Value" of the Stock
as of any date means (a) the average of the high and low sale prices of the
Stock on that date on the principal securities exchange on which the Stock is
listed; or (b) if the Stock is not listed on a securities exchange, the average
of the high and low sale prices of the Stock on that date as reported on the
NASDAQ National Market System; or (c) if the Stock is not listed on the NASDAQ
National Market System, the average of the high and low bid quotations for the
Stock on that date as reported by the National Quotation Bureau Incorporated;
(d) for any Options issued prior to the initial public offering of the Stock,
the initial public offering price; or (e) if none of the foregoing is
applicable, the average between the closing bid and ask prices per share of
stock on the last preceding date on which those prices were reported or that
amount as determined by the Board.
9. DURATION OF OPTIONS. The term of each Option shall be ten years from
the date of grant. No Option shall be exercisable after the expiration of ten
years from the date the Option is granted.
10. AMOUNT EXERCISABLE. (a) Each Option hereunder shall become exercisable
on a cumulative basis over three years as follows: (1) one-third (33%) on the
first annual anniversary of the grant of the Option, and (2) an
additional one-twelfth (8.33%) each three months after such first annual
anniversary. (b) The Board may in its discretion partially or fully accelerate
the exercisability of any outstanding Option in connection with the Optionee's
resignation from the Board. (c) Upon a Change of Control, each Option shall
become immediately exercisable. For this purpose, a "Change in Control" shall
have occurred if, after the Effective Date of the Plan:
(i) a report on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form or report) shall be filed with the Commission pursuant to
the Exchange Act and that report discloses that any person (within the
meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other
than the Company (or one of its subsidiaries) or any employee benefit plan
sponsored by the Company (or one of its subsidiaries), is the beneficial
owner (as that term is defined in Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act), directly or indirectly, of
20 percent or more of the outstanding Voting Stock;
(ii) any person (within the meaning of Section 13(d) or Section
14(d)(2) of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company (or
one of its subsidiaries), shall purchase securities pursuant to a tender
offer or exchange offer to acquire any Voting Stock (or any securities
convertible into Voting Stock) and, immediately after consummation of that
purchase, that person is the beneficial owner (as that term is defined in
Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act), directly or indirectly, of 20 percent or more of the
outstanding Voting Stock (such person's beneficial ownership to be
determined, in the case of rights to acquire Voting Stock, pursuant to
paragraph (d) of Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act);
(iii) the consummation of:
(x) a merger, consolidation or reorganization of the
Company with or into any other person if (a) the Company is not the
surviving entity or (b) as a result of such merger, consolidation or
reorganization, 50 percent or less of the combined voting power of the
then-outstanding securities of such other person immediately after such
merger, consolidation or reorganization are held in the aggregate by the
holders of Voting Stock immediately prior to such merger, consolidation or
reorganization;
(y) any sale, lease, exchange or other transfer of all
or substantially all the assets of the Company and its consolidated
subsidiaries to any other person if as a result of such sale, lease,
exchange or other transfer, 50 percent or less of the combined voting
power of the then-outstanding securities of such other person immediately
after such sale, lease, exchange or other transfer are held in the
aggregate by the holders of Voting Stock immediately prior to such sale,
lease, exchange or other transfer; or
(z) a transaction immediately after the consummation of
which any person (within the meaning of Section 13(d) or Section 14(d)(2)
of the Exchange Act) would be
the beneficial owner (as that term is defined in Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act), directly
or indirectly, of more than 50 percent of the outstanding Voting Stock;
(iv) the stockholders of the Company approve the dissolution of the
Company; or
(v) during any period of 12 consecutive months, the individuals who
at the beginning of that period constituted the Board of Directors shall
cease to constitute a majority of the Board of Directors, unless the
election, or the nomination for election by the Company's stockholders, of
each director of the Company first elected during such period was approved
by a vote of at least a two-thirds of the directors of the Company then
still in office who were directors of the Company at the beginning of any
such period.
"Voting Stock" means shares of the capital stock of the Company the
holders of which are entitled to vote for the election of directors, but
excluding shares entitled to so vote only upon the occurrence of a contingency
unless that contingency shall have occurred.
11. EXERCISE OF OPTIONS. Each Option shall be exercised by the delivery of
written notice to the Committee setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with: (a) cash,
certified check, bank draft, or postal or express money order payable to the
order of the Company for an amount equal to the option price of the shares, (b)
Mature Shares at their Fair Market Value on the date of exercise, (c) payment to
the Company, through a broker-assisted exercise that is approved by the
Committee, for an amount equal to the option price of the shares, (d) any
combination of (a), (b), or (c), and/or (e) any other form of payment which is
acceptable to the Committee, and specifying the address to which the
certificates for the shares are to be mailed.
As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Eligible Director certificates for the
number of shares with respect to which the Option has been exercised, issued in
the Eligible Director's name.
Whenever an Option is exercised by exchanging Mature Shares owned by
the Optionee, the Optionee shall deliver to the Company certificates registered
in the name of the Optionee representing a number of Mature Shares legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition.
If Mature Shares are used in payment, the aggregate Fair Market
Value of the Mature Shares tendered must be equal to or less than the aggregate
exercise price of the shares being purchased upon exercise of
the Option, and any difference must be paid by cash, certified check, bank
draft, or postal or express money order payable to the order of the Company.
Delivery of the shares shall be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Eligible Director, at the address specified
by the Eligible Director.
Notwithstanding any other provision of the Plan, the Committee shall
have the authority to cause an Optionee to utilize a different method of
exercise if the method selected by the Optionee could result in adverse
accounting treatment for the Company.
"Mature Shares" means shares of Stock that have been legally and
beneficially owned by the Optionee for at least six months.
12. NON-TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the Optionee other than by will or under the laws of descent and distribution,
and shall be exercisable, during the Optionee's lifetime, only by him.
Notwithstanding any provision in this Plan to the contrary, an Eligible Director
may transfer an Option to an Immediate Family Member or an entity controlled by
an Eligible Director or an Immediate Family Member, provided, however, no
further transfer shall be made except by operation of law or a transfer back to
such Eligible Director or such other transfer which may be approved by the
Board. For this purpose, "Immediate Family Member" means an Eligible Director's
children, grandchildren or spouse, or a trust for the benefit of such Immediate
Family Members.
13. TERMINATION OF DIRECTORSHIP OF OPTIONEE. If, before the date of
expiration of the Option, the Optionee shall cease to be a director of the
Company, the Option shall terminate on the earlier of the date of expiration or
90 days after the date of ceasing to serve as a director. In this event, the
Optionee shall have the right, prior to the termination of the Option, to
exercise the Option if he was entitled to exercise immediately prior to ceasing
to serve as a director.
Upon the death or disability of the Optionee while serving as a
director, his options shall become fully vested and, in the case of death his
executors, administrators, or any person or persons to whom his Option may be
transferred by will or by the laws of descent and distribution, shall have the
right, at any time prior to the earlier of the date of expiration of the Option
or 12 months following the date of his death, to exercise the Option, in whole
or in part.
14. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option, the Company shall not
be required to issue any Stock unless the Company has received evidence
satisfactory to it to the effect that the holder of that Option will not
transfer the Stock except in accordance with applicable law, including receipt
of an opinion of counsel satisfactory to the Company to the effect that any
proposed transfer complies with applicable law. The determination by the Company
on this matter shall be final, binding and conclusive. The Company may, but
shall in no event be obligated to, register any Stock covered by this Plan
pursuant to applicable securities laws of
any country or any political subdivision. In the event the Stock issuable on
exercise of an Option is not registered, the Company may imprint on the
certificate evidencing the Stock any legend that counsel for the Company
considers necessary or advisable to comply with applicable law. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option, or the issuance of shares under it, to comply with
any law or regulation of any governmental authority.
15. NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as a
stockholder with respect to Stock covered by any Option until the date a stock
certificate is issued for the Stock, and, except as otherwise provided in
Paragraph 17 hereof, no adjustment for dividends, or otherwise, shall be made if
the record date thereof is prior to the date of issuance of such certificate.
16. NO OBLIGATION TO RETAIN OPTIONEE. The granting of any Option shall not
impose upon the Company or its stockholders any obligation to retain or continue
to retain any Optionee or nominate any Optionee for election to continue in his
capacity as a director of the Company. The right of the Company, the Board of
Directors, and the Stockholders to terminate the service of any Optionee as a
director shall not be diminished or affected by reason of the fact that one or
more Options have been or would be granted to him.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation of shares
or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Stock outstanding, without
receiving compensation for it in money, services or property, then (a) the
number, class, and per share price of shares of Stock subject to outstanding
Options under this Plan shall be appropriately adjusted in such a manner as to
entitle an Optionee to receive upon exercise of an Option, for the same
aggregate cash consideration, the equivalent total number and class of shares he
would have received had he exercised his Option in full immediately prior to the
event requiring the adjustment; and (b) the number and class of shares of Stock
with respect to which Options may be granted under the Plan shall be adjusted by
substituting for the total number and class of shares of Stock then available
for grant, that number and class of shares of Stock that would have been
received by the owner of an equal number of outstanding shares of each class of
Stock as the result of the event requiring the adjustment.
If while unexercised Options remain outstanding under the Plan (i)
the Company shall not be the surviving entity in any merger, consolidation or
other reorganization (or survives only as a subsidiary of an entity other than
an entity that was wholly-owned by the Company immediately prior to such merger,
consolidation or other reorganization), (ii) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity (other than an entity wholly-owned by the
Company), (iii) the Company is to be dissolved, or (iv) the Company is a party
to any other corporate transaction (as defined under Section 424(a) of the Code
and applicable Treasury Regulations) that is not described in clauses (i), (ii)
or (iii) of
this sentence (each such event is referred to herein as a "Corporate Change"),
then (x) except as otherwise provided in an Option Agreement or as a result of
the Board's effectuation of one or more of the alternatives described below,
there shall be no acceleration of the time at which any Option then outstanding
may be exercised, and (y) no later than ten (10) days after the approval by the
stockholders of the Company of such Corporate Change, the Board, acting in its
sole and absolute discretion without the consent or approval of any Optionee,
shall act to effect one or more of the following alternatives, which may vary
among individual Optionees and which may vary among Options held by any
individual Optionee:
(1) accelerate the time at which some or all of the Options then
outstanding may be exercised so that such Options may be exercised in full
for a limited period of time on or before a specified date (before or
after such Corporate Change) fixed by the Board, after which specified
date all such Options that remain unexercised and all rights of Optionees
thereunder shall terminate,
(2) require the mandatory surrender to the Company by all or
selected Optionees of some or all of the then outstanding Options held by
such Optionees (irrespective of whether such Options are then exercisable
under the provisions of this Plan or the Option Agreements evidencing such
Options) as of a date, before or after such Corporate Change, specified by
the Board, in which event the Board shall thereupon cancel such Options
and the Company shall pay to each such Optionee an amount of cash per
share equal to the excess, if any, of the per share price offered to
stockholders of the Company in connection with such Corporate Change over
the exercise price(s) under such Options for such shares,
(3) with respect to all or selected Optionees, have some or all of
their then outstanding Options (whether vested or unvested) assumed or
have a new Option substituted for some or all of their then outstanding
Options (whether vested or unvested) by an entity which is a party to the
transaction resulting in such Corporate Change and which is then employing
him, or a parent or subsidiary of such entity, provided that (A) such
assumption or substitution is on a basis where the excess of the aggregate
fair market value of the shares subject to the Option immediately after
the assumption or substitution over the aggregate exercise price of such
shares is equal to the excess of the aggregate fair market value of all
shares subject to the Option immediately before such assumption or
substitution over the aggregate exercise price of such shares, and (B) the
assumed rights under such existing Option or the substituted rights under
such new Option as the case may be will have the same terms and conditions
as the rights under the existing Option assumed or substituted for, as the
case may be,
(4) provide that the number and class of shares of Stock covered by
an Option (whether vested or unvested) theretofore granted shall be
adjusted so that such Option when exercised shall thereafter cover the
number and class of shares of stock or other securities or property
(including, without limitation, cash) to which the Optionee would have
been entitled pursuant to the terms of the agreement and/or plan relating
to such Corporate Change if, immediately prior to such Corporate Change,
the Optionee had been the holder of record of the number of shares of
Stock then covered by such Option, or
(5) make such adjustments to Options then outstanding as the Board
deems appropriate to reflect such Corporate Change (provided, however,
that the Board may determine in its sole and absolute discretion that no
such adjustment is necessary).
In effecting one or more of alternatives (3), (4) or (5) above, and
except as otherwise may be provided in an Option Agreement, the Board, in its
sole and absolute discretion and without the consent or approval of any
Optionee, may accelerate the time at which some or all Options then outstanding
may be exercised.
In the event of changes in the outstanding Stock by reason of
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Option and not otherwise provided for by this Section 4.5,
any outstanding Options and any agreements evidencing such Options shall be
subject to adjustment by the Board in its sole and absolute discretion as to the
number and price of shares of stock or other consideration subject to such
Options. In the event of any such change in the outstanding Stock, the aggregate
number of shares available under this Plan may be appropriately adjusted by the
Board, whose determination shall be conclusive.
The issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.
18. TERMINATION AND AMENDMENT OF PLAN.
(a) The Board may amend, terminate or suspend the Plan at any time and
from time to time, in its sole and absolute discretion, in whole or in part;
provided, however, that any amendment which must be approved by the shareholders
of the Company in order to comply with applicable law or the rules of the
principal national securities exchange upon which the shares of Stock are traded
or quoted, shall not be effective unless and until such approval has been
obtained. Presentation of this Plan or any amendment hereof for shareholder
approval shall not be construed to limit the Company's authority to offer
similar or dissimilar benefits under other plans without shareholder approval.
(b) The Board shall not, without the further approval of the shareholders
of the Company, authorize the amendment of any outstanding Option to reduce the
option price. Furthermore, no Option shall be canceled and replaced with awards
having a lower option price without further approval of the shareholders of the
Company. This Section is intended to prohibit the unlimited repricing of
"underwater" Options without the further approval of the shareholders of the
Company and shall not be construed to prohibit the adjustments provided for in
Section 17 of this Plan.
19. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied in
a written agreement, which shall be subject to the terms and conditions of this
Plan and shall be signed by the Optionee and by the
Chairman of the Board, the Vice Chairman, the President or any Vice President of
the Company for and in the name and on behalf of the Company.
20. INDEMNIFICATION OF BOARD. With respect to administration of the Plan,
the Company shall indemnify each present and future member of the Board of
Directors against, and each member of the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including the amount of judgments and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid
to the Company itself) reasonably incurred by him in connection with or arising
out of any action, suit, or proceeding in which he may be involved by reason of
his being or having been a member of the Board of Directors, whether or not he
continues to be a member of the Board of Directors at the time of incurring the
expenses. However, this indemnity shall not include any expenses incurred by any
member of the Board of Directors (a) in respect of matters as to which he shall
be finally adjudged in any action, suit or proceeding to have been guilty of
gross negligence or willful misconduct in the performance of his duty as a
member of the Board of Directors, or (b) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel. In addition, no right of
indemnification under this Plan shall be available to or enforceable by any
member of the Board of Directors unless, within 60 days after institution of any
action, suit or proceeding, he shall have offered the Company, in writing, the
opportunity to handle and defend same at its own expense. This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Board of Directors and shall be in addition
to all other rights to which a member of the Board of Directors may be entitled
as a matter of law, contract, or otherwise.
21. FORFEITURES. Notwithstanding any other provision of this Plan, if,
before or after termination of the Optionee's capacity as a director of the
Company, there is an adjudication by a court of competent jurisdiction that the
Optionee committed fraud, embezzlement, theft, commission of felony, or proven
dishonesty in the course of his advisory relationship to the Company and its
affiliates which conduct materially damaged the Company or its affiliates, or
disclosed trade secrets of the Company or its affiliates, then any outstanding
options which have not been exercised by Optionee shall be forfeited. In order
to provide the Company with an opportunity to enforce this Section, an Option
may not be exercised if a lawsuit alleging that an action described in the
preceding sentence has taken place until a final resolution of the lawsuit
favorable to the Optionee.
22. RESTRICTED STOCK AWARDS. Subject to the provisions of this Plan, the
Board may issue, to any Eligible Director, shares of "Restricted Stock" (which
may be referred to as "Restricted Shares"), namely shares of Stock subject to
restrictions to be set out in an agreement between the Company and the Eligible
Director entered into pursuant to this Plan ("Restricted Stock Agreement"). The
terms and conditions of the Restricted Stock Agreement shall be determined by
the Board consistent with the terms of this Plan and shall conform to the
signature requirements of Section 10. In the discretion of the Board, an award
of Restricted Stock may be made as a grant of Restricted Shares or as a right to
receive Stock (or its cash equivalent or a combination of both) in the future.
(a) Limitation on Awards of Restricted Stock.
(1) In any calendar year, an Eligible Director may be awarded
Restricted Shares regardless whether he or she is granted an Option in that
year. However, the sum of (i) the number of Restricted Shares so
awarded, plus (ii) the number of shares of Stock subject to such Option, if any,
may not exceed the maximum Option size (in number of shares) that may be granted
to such Eligible Director in that calendar year under Section 7. EXAMPLE: If an
Eligible Director receives an Annual Grant of an Option to purchase 20,000
shares of Stock in a particular calendar year, then in that year he or she may
be awarded up to, but not more than, 5,000 Restricted Shares, so that his or her
total for the year does not exceed the 25,000-share limit on Annual Grants in
Section 7.
(2) The sum of (i) the aggregate number of Restricted Shares awarded
under this Plan, plus (ii) the aggregate number of shares of Stock subject to
Options granted under this Plan, may not exceed the number of Shares reserved
for issuance under Section 4. EXAMPLE: If Options have been granted to Eligible
Directors to purchase an aggregate of 750,000 Shares, then no more than an
aggregate of 250,000 Restricted Shares may be issued to Eligible Directors, so
that the total does not exceed the 1,000,000 Shares dedicated for issuance under
this Plan in Section 4.
(b) Pricing of Restricted Shares. Restricted Shares may be issued to an
Eligible Director for no payment, or for a payment at, above, or below the Fair
Market Value on the date of grant, in any case as determined by the Board.
(c) Stock Certificate. Restricted Shares shall be registered in the name
of the Eligible Director receiving the Restricted Shares and deposited, together
with a stock power endorsed in blank, with the Company. Each such certificate
shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Stock
represented by it is restricted by and subject to the terms and
conditions (including conditions of forfeiture) contained in the
BindView Development Corporation Non-Employee Director Incentive
Plan, and an agreement entered into between the registered owner
and the Company, including any shareholders agreement. A copy of
the Plan and agreement is on file in the office of the Secretary
of the Company.
(d) Restrictions. Restricted Shares shall be subject to such restrictions
on sale, transfer, alienation, pledge or other encumbrance as are specified in
the Restricted Stock Agreement. Such restrictions shall include without
limitation the following, regardless whether expressly set forth in the
Restricted Stock Agreement:
(1) a prohibition against the sale, transfer, alienation, pledge or
other encumbrance of the Restricted Shares, except that any Restricted Shares
that are subject to such prohibition may nevertheless be transferred in the same
manner as Options under Section 12. Such prohibition shall lapse in the same
way(s) and on the same schedule(s) (including without limitation any automatic
or discretionary accelerated vesting), as though an Option for the same number
of Shares had been granted on the same date as the issuance of the Restricted
Shares; and
(2) a requirement that the Eligible Director forfeit Restricted
Shares (or, if purchased by the Eligible Director, resell Restricted Shares back
to the Company at cost) in any circumstance in which an Option,
granted on the same date as the issuance of the Restricted Shares, would either
(i) cease to be an exercisable Option by reason of termination of such Option
under this Plan, or (ii) be forfeited under this Plan.
No award of Restricted Shares may provide for restrictions continuing beyond
10 years from the date of the award.
(e) Lapse of Restrictions.
(1) At the end of the time period during which any Restricted Shares
are subject to forfeiture or restrictions on sale, transfer, alienation, pledge,
or other encumbrance, such Restricted Shares shall vest and will be delivered in
a certificate, free of all restrictions, to the Eligible Director or to the
Eligible Director's legal representative, beneficiary or heir; provided the
certificate shall bear such legend, if any, as the Committee determines is
reasonably required by applicable law. By accepting a Stock Award and executing
a Restricted Stock Agreement, the Employee agrees to remit when due any federal,
state or local taxes of any kind required by law to be withheld with respect to
a delivery of Stock under the Plan. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including normal directors fees) otherwise due to a grantee, an amount equal to
any federal, state or local taxes of any kind required by law to be withheld
with respect to any delivery of Stock under the Plan.
(2) If an Eligible Director who holds Restricted Shares shall cease
to be a member of the Board by reason of disability or death, then any
restrictions on such Restricted Shares shall automatically lapse, subject to any
specific restrictions stated in the Restricted Stock Agreement.
(f) Rights as Stockholder. Subject to the terms and conditions of this
Plan, each Eligible Director receiving a certificate for Restricted Shares shall
have all the rights of a stockholder with respect to the Restricted Shares
during any period in which such Restricted Shares are subject to forfeiture or
restrictions on transfer, including without limitation, the right to vote such
Shares. Any dividends paid with respect to such Restricted Shares, in cash or
property (other than stock in the Company or rights to acquire stock in the
Company) shall be paid to such Eligible Director currently. Dividends paid in
stock in the Company or rights to acquire stock in the Company shall be added to
and become a part of the Restricted Shares.
(g) Section 83(b) Election. If a grantee makes an election under Section
83(b) of the Code, or any successor section thereto, to be taxed with respect to
Restricted Shares as of the date of transfer of the Restricted Shares rather
than as of the date or dates upon which the grantee would otherwise be taxable
under Section 83(a) of the Code, the grantee shall deliver a copy of such
election to the Company immediately after filing such election with the Internal
Revenue Service.
(h) Other Plan Provisions Applicable. All other provisions of this Plan,
not inconsistent with subparagraphs (a) through (g) of this Section 22, shall
apply in respect of Restricted Shares, mutatis mutandis.
23. GENDER. If the context requires, words of one gender when used in this
Plan shall include the others and words used in the singular or plural shall
include the other.
24. HEADINGS. Headings are included for convenience of reference only and
do not constitute part of the Plan and shall not be used in construing the terms
of the Plan.
25. GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
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