EXHIBIT 10.1
INTERNET VENTURES Inc
EXECUTIVE STOCK INCENTIVE PLAN
1. Purpose:
The Executive Stock Incentive Plan is established to aid Internet Ventures, Inc.
(the "Company") to attract, retain and compensate employees, associates,
advisors, consultants and officers and directors of the Company, its parent or
subsidiaries, of outstanding ability by enabling and encouraging them to acquire
stock ownership in the Company. This plan is intended to comply with the
provisions of Rule 701 under the Securities Act of 1933. For purposes of the
Plan, a parent corporation and a subsidiary corporation shall be as defined in
sections 425(e) and 425(f) of the Internal Revenue Code of 1954, as amended (the
"Code").
2. Administration:
The Plan shall be administered by the Board of Directors (the "Board") and/or by
a duly appointed committee of the Board. Any subsequent references to the Board
shall also mean the committee if it has been appointed. All questions of
interpretation of the Plan or of any options granted under the plan (an
"Option") shall be determined by the Board, and such determinations shall be
final and binding upon all persons having an interest in the Plan and/or any
Option. Options may be either Incentive Stock Options (ISOs) as defined in
section 422A of the Code, Nonqualified Stock Options (NQSOs) or Stock
Appreciation Rights (SARs). Warrants issued under the plan shall be treated as
NQSOs. Each type of option granted to an individual Optionee shall be set forth
in a separate option agreement.
3. Eligibility:
(a) The Options may be granted only to employees (including officers and
Directors), associates, advisors and consultants of the Company. The Board
shall, in its sole discretion, determine which persons shall be granted
Options (an "Optionee"). Termination of an Optionee's status as a director
shall be deemed to be termination of the Optionee's employment for purposes
of applying the provisions of the Plan. An Optionee may, if he is otherwise
eligible, be granted additional Options.
(b) Any option granted pursuant to this Plan which is intended to be an
incentive stock option as defined in the IRC shall provide that the number
of shares first becoming exercisable in any calendar year pursuant to such
Option and all other options granted pursuant to incentive stock option
plans of the Company shall be limited to that number of Options with an
aggregate Fair Market Value (determined as of the date of grant in
accordance with the provisions of Section 6(a) of this Plan) may not exceed
the sum of
$100,000. Options designated as nonqualified stock options shall not be
subject to such limitation.
(c) Optionees owning stock of more than 10% combined voting power of all
classes of stock of the Company (within the meaning of Section 422A(b)(6)
of the Code) shall be eligible for Incentive Stock Options, however, the
exercise price of the ISO granted must be 110% of the fair market value and
shall not be exercisable after five (5) years from the date of grant.
4. Shares Subject to Option.
The maximum number of shares which may be issued under the Plan in any one year
shall be 200,000 shares of the Company's authorized but unissued common stock
plus the sum of (a) the cumulation of one percent (1%) of the voting shares
outstanding at the beginning of each of the Company's fiscal years subsequent to
the adoption of this Plan; (b) the cumulative total of three and one-third
percent (3 1/3%) of any voting stock (common or preferred) issued by the Company
(excludes stock equivalents) in connection with the acquisition of another
company or business entity subsequent to the adoption of this Plan; (c) less the
number of shares actually awarded in all prior years under the Plan; all subject
to adjustment as provided in paragraph 6(f).
The amount of shares subject to the Plan is 200,000 plus one percent (1%) of the
outstanding shares at the beginning of each of the Company's fiscal years plus
three and one-third percent (3 1/3%) of any voting stock issued in connection
with an acquisition of another company or business.
In the event that any outstanding Option for any reason expires or is
terminated, the shares of Common stock allocable to the unexercised portion of
such Option may again be subjected to Option. The Company may grant an SAR in
tandem with a NQSO, in which case the exercise of either the option or the SAR
reduces the number of shares subject to the other by a like number of shares.
5. Time for Granting Options.
All options shall be granted, if at all, within ten (10) years from the earlier
of the date the Plan is adopted by the Board or the date the Plan is duly
approved by the stockholders of the Company.
6. Terms, Conditions and Form of Options.
Subject to the provisions of the Plan, the Board shall determine for each Option
(which need not be identical) the number of shares for which the option shall be
granted, the option price of the Option, the exercisability of the Option,
whether the Option is a nonqualified stock option, an incentive stock option or
a stock appreciation right and all the terms and conditions of the option.
Options granted pursuant to this Plan shall be evidenced by written agreements
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specifying the number of shares covered thereby, in such forms as the Board
shall from time to time establish, which agreements may incorporate all or any
of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions.
(a) Option Price. The option price shall be not less than the fair market
value, in the case of an incentive stock option, and not less than fifty
percent (50%) of fair market value, in the case of a non-qualified stock
option, of shares of common stock of the Company on the date the Option is
granted, except in the case of 10% shareholders as set forth in 3(a) above.
The Fair Market Value (FMV) of the common stock shall be the average of the
closing bid and asked prices of the stock as reported by NASDAQ or the
average of the highest bid and lowest offer reported in the OTC market by
the OTC Bulletin Board on the day before the grant date. If not reported by
NASDAQ or OTCBB then the FMV shall be the closing sale price on the stock
exchange on which the stock is traded or on the NASD National Market System
on the day prior to date of grant or other such date which reflects the
last trading date, or if no active market exists then the FMV shall be that
price set by the Board.
(b) Valuation of Stock Appreciation Rights. The aggregate dollar value of the
cash and/or shares to which an Optionee may be entitled from exercise of an SAR
shall be determined as follows:
(i) Upon the grant of each SAR, the Board shall stipulate the "Base
Value" for each share of common stock covered thereby, which Base
Value may be equal to, greater than or less than the Fair Market
Value of the shares on the date of grant; provided, however, that
the Base Value shall in no event be less than fifty percent (50%) of
the FMV on the date of grant.
(ii) Upon exercise of an SAR, the "Exercise Value" for each share covered
thereby shall be the lesser of (1) the Fair Market Value of a share
as of the date of exercise, or (2) a certain percentage, as set
forth in the individual Option/SAR agreement, of the Base Value; and
(iii) Upon exercise of an SAR, the Optionee shall be entitled to receive a
total dollar amount, payable in cash, shares, or a combination
thereof, determined by multiplying the number of shares being
exercised by the amount by which the Exercise Value exceeds the Base
Value of the shares as stated in the SAR. The determination as to
whether the amount due to the Optionee upon exercise of an SAR is to
be paid in cash or shares or in a percentage ratio of cash and
shares, shall be made solely by the Board. Any payment in shares
shall be calculated by dividing the dollar amount of the amount due
in shares by the Exercise Value.
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(c) Exercise Period of Options. The Board shall have the power to set the time
or times within which each Option shall be exercisable or the event or events
upon the occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however, that no Option shall
be exercisable after the expiration of (10) years from the date such Option is
granted.
(d) Exercise of Option.
(i) Options may be exercised only by written notice to the Company,
stating the number of shares being purchased and accompanied by
payment of the option price for the number of shares being purchased
(1) in cash, (2) by tender to the Company of shares of common stock
of the Company which (a) either have been owned by the Optionee for
more than six (6) months or were not acquired directly or indirectly
from the Company, and (b) have a fair market value (defined under
Option Price above) not less than the option price, (3) by
collateralized promissory note(s) or (4) by such other consideration
as the Board may approve prior to the time the Option is exercised.
At the time an Option is exercised, in whole or in part, or at any
time thereafter as requested by the Company, the Optionee shall make
adequate provision for federal and state income tax withholding
obligations of the Company, if any which arise upon exercise, in
whole or in part, of the Option.
(ii) An Option is not exercisable until such time as the Plan is duly
approved by the stockholders of the Company.
(iii) In the event of (1) a merger or consolidation in which the Company
is not the surviving corporation, and/or (2) the sale of all or
substantially all of the Company's assets (other than a sale or
transfer to a subsidiary of the Company as defined in Section 425(f)
of the Code), all outstanding Options, notwithstanding the terms of
such Options, shall become fully exercisable prior to consummation
of such merger or sale of assets at such time(s) as the Board shall
determine or the surviving or acquiring corporation shall, as a
condition precedent to consummation of said transaction, assume the
outstanding Options or issue substitute incentive stock options (as
defined in the Code) in place thereof in a manner qualifying under
section 425(a) of the Code.
(e) Options Non-Transferable. During the lifetime of the Optionee, the Option
shall be exercised only by said Optionee. No option shall be assignable or
transferable by the Optionee, except by will or by the laws of descent and
distribution. Except as to nonqualified options which may be made transferable
at the option of the Board.
(f) Termination of Options. If an Optionee ceases to be an employee of the
Company for any reason except death or disability, any Option, to the extent
unexercised and exercisable by the Optionee on the date on which the Optionee
ceased to be an employee, may be exercised by the Optionee within three (3)
months after the date on which the Optionee ceases to be an
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employee, but in any event no later than the date of expiration of the Option
term. If the Optionee's employment with the Company is terminated because of the
death or disability of the Optionee within the meaning of Section 105(d)(4) of
the Code, any Option, to the extent unexercised and exercisable by the Optionee
on the date Optionee ceased to be employed by the Company, may be exercised by
the Optionee (or the Optionee's legal representative) at any time prior to the
expiration of twelve (12) months from the date the Optionee ceased to be
employed, but in any event no later than the date of expiration of the Option
terms. An Optionee's employment shall be deemed to have terminated on account of
death if the Optionee dies within three (3) months of the Optionee's termination
of employment. Except as provided in this paragraph 6(f), an Option shall
terminate and may not be exercised after the Optionee ceases to be an employee
of the Company.
Options granted to non-employees, including directors, and warrants granted as
non-qualified options shall not be terminated according to this paragraph but
shall be exercisable until expiration of the option.
(g) Effect of Change in Stock Subject to Plan. Appropriate adjustment shall be
made in the number and class of shares of stock subject to this Plan and to any
outstanding Options and in the exercise price of any outstanding Options in the
event of a stock split, reverse stock split or like change in the capital
structure of the Company.
(h) Restriction on Issuance of Shares. The grant of Options and the issuance of
shares shall be subject to compliance with all of the applicable requirements of
the law with respect to such securities, including any required approval by the
Commissioner of Corporations of the State of California.
(i) Rights as a Stockholder or Employee. No person shall have any rights as a
stockholder with respect to any shares covered by an Option until the date of
the issuance of a stock certificate(s) for the shares for which the Option has
been exercised. No adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to the date such stock
certificate(s) are issued, except as provided in Paragraph 6(g). Nothing in this
Plan or in any Option agreement shall confer upon any Optionee any right to
continue in the employ of the Company or interfere in any way with any right of
the Company to terminate the Optionee's employment at any time.
(j) Fractional Shares. In no event shall the Company be required to issue
fractional shares upon the exercise of the Option.
(k) Option Exercisability. The exercisability (vesting) of any Option granted
under the Plan shall be determined by the Board; provided that at least 20% of
the shares of stock covered by any Option shall become exercisable as of the end
of each full year of the term of such Option. The right of exercise shall be
cumulative.
7. Termination or Amendment of Plan.
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The Board may at any time terminate or amend the Plan, provided that
without approval of stockholders there shall be: (i) no increase in the total
number of shares covered by the Plan (except by operation of the provisions of
subparagraph 6(g) above), and (ii) no change in the class of persons eligible to
receive Options. In any case, no amendment may adversely affect any then
outstanding Options or any unexercised portions thereof without the consent of
Optionee unless such amendment is required to enable the Option to qualify as an
incentive stock option (as defined in the Code).
8. The above constitutes the Company's Executive Stock Incentive Plan.
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INTERNET VENTURES, INC.
Executive Stock Incentive Plan
INCENTIVE STOCK OPTION AGREEMENT
The Board of Directors of Internet Ventures, Inc. (the "Company") desires to
grant to Optionee the ability to participate in the Executive Stock Incentive
Plan (the "Plan"), a copy of which is attached hereto, by granting an option to
purchase shares in the Company as set forth below.
Optionee:
Address:
Date of Grant
Option Shares:
(as may be adjusted as provided for in the Plan).
Exercise Price per Share:
(being the Fair Market Value on the date as provided for in the Plan).
Option Period:
Exercise of Option (Vesting):
___________________________________________
___________________________________________
___________________________________________
Manner of Exercise: The Optionee shall give written notice to the Company
(Attachment A) specifying the number of shares to be purchased accompanied by
payment in cash, by certified check, upon approval by the Board, his promissory
note (secured by collateral other than the shares acquired), or other shares of
the Company's Common Stock, for the full purchase price. No share shall be
issued until full payment therefor has been made.
Employment: Nothing contained in this Option Agreement shall confer upon the
Optionee any right to be continued in the employment of the Company or shall
prevent the Company from terminating his employment at any time, with or without
cause. If the Optionee's employment with the Company is terminated for any
reason other than death, this option shall be exercisable only as to those
shares of Common Stock immediately purchasable by him at the date of
termination. In no event shall an option be exercisable after the termination
date of this
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agreement.
Death: If the Optionee dies while employed by the Company or within three (3)
months after termination of his employment, that portion of this option which
was exercisable by the Optionee at the time of death may be exercised by his
legal representative or beneficiaries for a period of twelve (12) months from
the date of cessation of emloyment.
Non-Transferability of Option: This option shall not be transferable other than
by will or by the laws of descent and distribution, and may be exercised during
the Optionee's lifetime only by him.
Incorporation of Plan: The Option granted hereby is subject to, and governed by,
the terms and conditions of the Plan, which are hereby incorporated by
reference. This Agreement, including the Plan incorporated by reference herein,
is the entire agreement among the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings.
Securities Laws Requirements: No shares shall be issued upon the exercise of any
option unless and until the Company and the Optionee are determined to be in
compliance with applicable State and Federal securities laws with respect to an
individual exercise. The shares issued under the Plan may be restricted
securities subject to limitations on resale.
General: Notice regarding this agreement shall be in writing and shall be
delivered in person or by registered mail to the Company's address.
The parties have accepted the terms herein and entered into this agreement this
________________ day of _______________, ____.
Company:_____________________________
Optionee:____________________________
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NOTICE OF EXERCISE
(to be signed only upon exercise of the Option)
TO: Internet Ventures, Inc.
The undersigned hereby irrevocably elects to purchase _____________* shares of
Common Stock, par value $.01 per share, of Internet Ventures, Inc. (the
"Company") pursuant to the Stock Option Agreement dated _____________, ____
between the undersigned and the Company, and herewith encloses $________________
to pay the purchase price for the shares.
Date:_______________________, ______
Signature:__________________________
(Signature must conform in all respects to name of the holder
as specified on the face of the Option)
Address:____________________________
____________________________
Tax ID Number:______________________
*Do not make any adjustment for additional Common Stock, other securities or
property which, pursuant to the adjustment provisions of the Option, may be
deliverable upon exercise.
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FIRST AMENDMENT TO THE
INTERNET VENTURES, INC.
1995 EXECUTIVE STOCK PLAN
WHEREAS, Internet Ventures, Inc. (the "Company") has established and
maintains the Internet Ventures, Inc. Executive Stock Incentive Plan (the
"Plan"), effective as of October 24, 1995; and
WHEREAS, the Company has determined that it desires to amend the Plan to
reflect certain changes related to the Company becoming a reporting company
under the Securities and Exchange Act of 1934, as amended;
NOW, THEREFORE, BE IT RESOLVED that, pursuant to the power and authority
reserved to the Board of Directors by Section 7 of the Plan, the Plan be and is
hereby amended effective October 1, 1999, unless otherwise specified herein,
in the following particulars:
1. Section 2 is amended by deleting the first and second sentences and
replacing them with the following:
"(a) This Plan shall be administered by a Committee (the "Committee") which
shall be comprised of one or more non-employee directors designated by
the Board of Directors (the "Board"). A person shall be considered a
non-employee director for this purpose only if, at the time he
exercises discretion in administering the Plan, he is a non-employee
director within the meaning of Rule 16b-3 under the Exchange Act. In
the absence of a designation, the Board or the portion that qualifies
as the Committee shall be the Committee. Any subsequent references to
the Board shall be deemed to also include the Committee. At any time
the Company is publicly held, this Plan is intended to qualify for
exemption from Section 16(b) of the Exchange Act and to qualify as
performance-based compensation under Section 162(m) of the Code and
shall be interpreted in such a way as to result in such qualification.
A member of the Committee shall not exercise any discretion respecting
himself or herself under this Plan."
2. Section 2 is further amended by adding the following:
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"(b) In the event that the Company becomes a publicly held corporation, the
Board shall appoint a Committee that consists of directors who are
"non-employees" within the meaning of Rule 16b-3 and each of whom is
an "outside" director under Section 162(m) of the Code to administer
the Plan with respect to individuals subject to (or potentially
subject to) such provisions."
3. Section 8 is amended by deleting it in its entirety and replacing it with
the following:
"8. In the event there is an effective registration statement under the
Securities Act pursuant to which shares of Common Stock shall be
offered for sale in an underwritten offering, an Optionee shall not,
during the period requested by the underwriters managing the
registered public offering, effect any public sale or distribution of
shares received directly or indirectly pursuant to an exercise of an
Option, SAR or warrant.
9. In addition to such other rights of indemnification as they may have
and to the extent permitted by law, the Company shall indemnify,
defend and hold harmless the Board, the Committee, the members of the
Committee, the officers of the Company, and any agent or
representative selected by the Board or Committee (collectively
"Indemnified Party") against the reasonable expenses, including,
without limitation, attorneys' fees, actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or
any threat thereof, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any act or omission in
connection with the Plan or any Option, SAR or warrant granted
thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any action,
suit or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such Indemnified
Party is liable for gross negligence or gross misconduct in the
performance of his duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding the Indemnified
Party may in writing elect to defend the same at its sole expense, and
if such election is made, the Company shall have no further liability
or obligations to the Indemnified Party under this Section. The
provisions of this Section 9 shall in no way limit any other
obligation or arrangements the Company may have with regard to
indemnifying an Indemnified Party.
10. No liability whatever shall attach to or be incurred by any past,
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present or future stockholders, officers or directors, merely as such,
of the Company under or by reason of any of the terms, conditions or
agreements contained in this Plan, in an option agreement or implied
from either thereof, and any and all liabilities of, and any and all
rights and claims against the Company, or any shareholder, officer or
director, merely as such, whether arising at common law or in equity
or created by statute or constitution or otherwise, pertaining to this
Plan or to an option agreement, are hereby expressly waived and
released by every Optionee as a part of the consideration for any
benefits provided by the Company under this Plan. A person who shall
claim a right or benefit under this Plan shall be entitled only to
claim against the Company for such benefit.
11. With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event the Plan does not
include a provision required by Rule 16b-3 to be stated herein, such
provision (other than one relating to eligibility requirements or the
price and amount of Awards) shall be deemed to be incorporated by
reference into the Plan with respect to Optionees subject to Section
16.
12. If at the time an Optionee incurs a termination of employment (other
than due to cause) or if at the time of a change in control, the
Optionee is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under this Plan or an
option agreement to the extent necessary to avoid the imposition of
liability shall be suspended and delayed during the period the
Optionee would be subject to such liability, but not more than six (6)
months and one (1) day and not to exceed the option period, whichever
is shorter. The Company shall have the right to suspend or delay any
time period described in this Plan or an option agreement if the
Committee shall determine that the action may constitute a violation
of any law or result in liability under any law to the Company, an
affiliate or a stockholder of the Company until such time as the
action required or permitted shall not constitute a violation of law
or result in liability to the Company, an affiliate or a stockholder
of the Company. The Committee shall have the discretion to suspend the
application of the provisions of this Plan required solely to comply
with Rule 16b-3 if the Committee shall determine that Rule 16b-3 does
not
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apply to this Plan.
13. This Plan and the option agreement constitute the entire agreement
with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between this Plan and the option
agreement, the terms and conditions of the option agreement shall
control."
Except as provided herein, the Plan shall remain in full force and effect.
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IN WITNESS WHEREOF, the Company has caused this amendment to be executed as
of _________, 1999.
INTERNET VENTURES, INC.
By: /s/ Donald A. Janke
------------------------------
Donald A. Janke
/s/ Marshall F. Sparks
------------------------------
Marshall F. Sparks
/s/ Daniel R. DiMicco
------------------------------
Daniel R. DiMicco
/s/ Alfred M. Leopold
------------------------------
Alfred M. Leopold
Being all the directors of the Company
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