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EXHIBIT 10.2
ENTERWORKS, INC.
1996 STOCK OPTION PLAN
(amended)
1. Purpose.
The purpose of this plan (the "Plan") is to secure for
Enterworks, Inc., a Delaware corporation, (the "Company") and its
shareholder(s) the benefits arising from capital stock ownership by employees,
officers and directors of, consultants and advisors to, the Company, who are
expected to contribute to the Company's future growth and success. Except
where the context otherwise requires, the term "Company" shall include the
parents and all future subsidiaries of the Company as defined in Sections
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced
from time to time (the "Code"). Those provisions of the Plan which make
express reference to Section 422 shall apply only to Incentive Stock Options
(as that term is defined in the Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the
Plan may be either incentive stock options ("Incentive Stock Options") meeting
the requirements of Section 422 of the Code or Non-Statutory Options which are
not intended to meet the requirements of Section 422 of the Code
("Non-Statutory Options").
(b) Administration.
(i) The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms
and provisions of the Plan shall be final and conclusive. The Board of
Directors may in its sole discretion grant options to purchase shares of the
Company's Common Stock ("Common Stock") which are shares of Class A Common
Stock and issue shares upon exercise of such options as provided in the Plan.
The Board shall have authority, subject to the express provisions of the Plan,
to construe the respective option agreements and the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, to determine the terms
and provisions of the respective option agreements, which need not be
identical, and to make all other determinations which are, in the judgment of
the Board of Directors, necessary or desirable for the administration of the
Plan. The Board of Directors may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any option agreement in the
manner and to the extent it shall deem expedient to carry the Plan into effect
and it shall be the sole and final judge of such expediency. No director or
person acting pursuant to authority delegated by the Board of Directors shall
be liable for any action or determination under the Plan made in good faith.
(ii) To the full extent permitted by or consistent
with applicable laws or
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regulations and Section 3(b) of this Plan (A) the Board of Directors may
delegate any or all of its powers under the Plan to one or more committees, or
subcommittees appointed by the Board of Directors for the purpose of granting
and administering options to persons to whom Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") applies, and (B) any and all other
powers of the Board of Directors under the Plan, including the granting and
administration of all other options, may be vested in the Chief Executive
Officer of the Company, provided that the Chief Executive Officer is and
remains a member of the Board of Directors. References to the Board of
Directors in the Plan shall mean and relate to the Chief Executive Officer.
(c) Applicability of Rule 16b-3. Those provisions of the
Plan which make express reference to Rule 16b-3 promulgated under the Exchange
Act, or any successor rule ("Rule 16b- 3"), or which are required in order for
certain option transactions to qualify for exemption under Rule 16b-3, shall
apply only to such persons as are required to file reports under Section 16(a)
of the Exchange Act (a "Reporting Person").
3. Reserved.
4. Stock Subject to Plan.
Subject to adjustment as provided in Section 15 below, the
maximum number of shares of Common Stock which may be issued and sold under the
Plan is twelve million (12,000,000). If an option granted under the Plan shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan. If shares issued upon exercise of an
option under the Plan are tendered to the Company in payment of the exercise
price of an option granted under the Plan, such tendered shares shall again be
available for subsequent option grants under the Plan; provided, that in no
event shall such shares be made available for issuance to Reporting Persons or
pursuant to exercise of Incentive Stock Options.
5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan as may be approved by the Board of Directors. Such
option agreements may differ among recipients.
6. Purchase Price.
(a) General. Subject to Section 3(b), the purchase price
per share of stock deliverable upon the exercise of an option shall be
determined by the Board of Directors, provided, however, (i) that in the case
of an Incentive Stock Option, the exercise price shall not be less than 100% of
the fair market value of such stock, as determined by the Board of Directors,
at the time of grant of such option, or less than 110% of such fair market
value in the case of options described in Section 11(b), and (ii) in no event
shall the exercise price be less than $0.12 (twelve cents) per share (subject
to appropriate adjustment for stock splits, stock dividends, combinations and
other similar recapitalizations, subsequent to the date of this Plan, affecting
the shares subject to the options.)
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(b) Payment of Purchase Price. Options granted under the
Plan may provide for the payment of the exercise price by delivery of cash or a
check to the order of the Company in an amount equal to the exercise price of
such options, or, to the extent provided in the applicable option agreement,
(i) by delivery to the Company of shares of Common Stock of the Company already
owned by the optionee having a fair market value equal in amount to the
exercise price of the options being exercised or (ii) by any other means
(including, without limitation, by delivery of a promissory note of the
optionee payable on such terms as are specified by the Board of Directors)
which the Board of Directors determines are consistent with the purpose of the
Plan and with applicable laws and regulations (including, without limitation,
the provisions of Regulation T promulgated by the Federal Reserve Board). The
fair market value of any shares of the Company's Common Stock or other non-cash
consideration which may be delivered upon exercise of an option shall be
determined by the Board of Directors.
7. Option Period.
Each option and all rights thereunder shall expire on such
date as shall be set forth in the applicable option agreement, except that, in
the case of an Incentive Stock Option, such date shall not be later than ten
(10) years after the date on which the option is granted and, in all cases,
options shall be subject to earlier termination as provided in the Plan.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either
in full or in installments at such time or times and during such period as
shall be set forth in the agreement evidencing such option, subject to the
provisions of the Plan.
9. Nontransferability of Options.
Except as the Board may otherwise determine in an option
agreement, options shall not be assignable or transferable by the person to
whom they are granted, either voluntarily or by operation of law, except by
will or the laws of descent and distribution, and, during the life of the
optionee, shall be exercisable only by the optionee.
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive
Stock Options, and subject to the provisions of the Plan, the Board of
Directors shall determine the period of time during which an optionee may
exercise an option following (i) the termination of the optionee's employment
or other relationship with the Company or (ii) the death or disability of the
optionee. Such periods shall be set forth in the agreement evidencing such
option.
11. Incentive Stock Options.
Options granted under the Plan which are intended to be
Incentive Stock Options shall be subject to the following additional terms and
conditions:
(a) Express Designation. All Incentive Stock Options
granted under the Plan shall, at the time of grant, be specifically designated
as such in the option agreement covering such
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Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an
Incentive Stock Option is to be granted under the Plan is, at the time of the
grant of such option, the owner of stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company (after taking into
account the attribution of stock ownership rules of Section 424(d) of the
Code), then the following special provisions shall be applicable to the
Incentive Stock Option granted to such individual
(i) The purchase price per share of the Common
Stock subject to such Incentive Stock Option shall not be less than 110% of the
fair market value of one share of Common Stock at the time of grant; and
(ii) the option exercise period shall not
exceed five years from the date of grant.
(c) Dollar Limitation. For so long as the Code shall so
provide, options granted to any employee under the Plan (and any other
incentive stock option plans of the Company) which are intended to constitute
Incentive Stock Options shall not constitute Incentive Stock Options to the
extent that such options, in the aggregate, become exercisable for the first
time in any one calendar year for shares of Common Stock with an aggregate fair
market value (determined as of the respective date or dates of grant) of more
than $100,000.
(d) Termination of Employment, Death or Disability. No
Incentive Stock Option may be exercised unless, at the time of such exercise,
the optionee is, and has been continuously since the date of grant of his or
her option, employed by the Company, except that:
(i) an Incentive Stock Option may be exercised
within the period of three months after the date the optionee ceases to be an
employee of the Company by reason of termination without cause by the Company
(or within such lesser period as may be specified in the applicable option
agreement), provided, that the agreement with respect to such option may
designate a longer exercise period and that the exercise after such three-month
period shall be treated as the exercise of a non-statutory option under the
Plan;
(ii) if the optionee dies while in the employ
of the Company, or within three months after the optionee ceases to be such an
employee, the Incentive Stock Option may be exercised by the person to whom it
is transferred by will or the laws of descent and distribution within the
period of six months after the date of death (or within such lesser period as
may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within
the meaning of Section 22(e)(3) of the Code or any successor provision thereto)
while in the employ of the Company, the Incentive Stock Option may be exercised
within the period of six months after the date the optionee ceases to be such
an employee because of such disability (or within such lesser period as may be
specified in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in
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accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations (or any successor regulations). Notwithstanding the foregoing
provisions, no Incentive Stock Option may be exercised after its expiration
date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in
its sole discretion, include additional provisions in option agreements
covering options granted under the Plan, including without limitation
restrictions on transfer, repurchase rights, commitments to pay cash bonuses,
to make, arrange for or guaranty loans or to transfer other property to
optionees upon exercise of options, or such other provisions as shall be
determined by the Board of Directors; provided that such additional provisions
shall not be inconsistent with any other term or condition of the Plan and such
additional provisions shall not cause any Incentive Stock Option granted under
the Plan to fail to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in
its sole discretion, (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular, option or options granted
under the Plan may be exercised; provided, however, that prior to the time that
the Common Stock of the Company is registered under the Exchange Act, unless
such action has been approved by the holders of a majority of the then
outstanding shares of the Company's Common Stock, such actions (i) may be taken
with respect to not more than twenty-five percent (25%) of the maximum number
of shares which may be issued under options to persons other than Key Employees
or Founders and (ii) may not be taken with respect to an option to a Key
Employee or Founder.
13. General Restrictions.
(a) Investment Representations. The Company may require any
person to whom an option is granted, as a condition of exercising such option,
to give written assurances in substance and form satisfactory to the Company to
the effect that such person is acquiring the Common Stock subject to the option
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock.
(b) Compliance With Securities Laws. Each option shall be subject
to the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be
deemed to require the Company to
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apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
14. Rights as a Shareholder.
The holder of an option shall have no rights as a shareholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations and Related Transactions.
(a) General. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, (i) the outstanding
shares of Common Stock are increased, decreased or exchanged for a different
number or kind of shares or other securities of the Company, or (ii) additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Common Stock or
other securities, an appropriate and proportionate adjustment may be made in
(x) the maximum number and kind of shares reserved for issuance under the Plan,
(y) the number and kind of shares or other securities subject to any then
outstanding options under the Plan, and (z) the price for each share subject to
any then outstanding options under the Plan, without changing the aggregate
purchase price as to which such options remain exercisable. Notwithstanding
the foregoing, no adjustment shall be made pursuant to this Section 15 if such
adjustment would cause the Plan to fail to comply with Section 422 of the Code.
(b) Board Authority to Make Adjustments. Any adjustments under
this Section 15 will be made by the Board of Directors, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. Except as otherwise provided in any applicable
option, in the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding options: (i)
provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options substituted for Incentive Stock
Options shall meet the requirements of Section 424(a) of the Code, (ii) upon
written notice to the optionees, provide that all unexercised options will
terminate immediately prior to the consummation of such transaction unless
exercised by the optionee within a specified period following the date of such
notice, (iii) in the event of a merger under the terms of which holders of the
Common Stock of the Company will receive upon consummation thereof a cash
payment for each share surrendered in the merger (the "Merger
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Price"), make or provide for a cash payment to the optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such outstanding options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such outstanding options in exchange for the termination of such
options, and (iv) provide that all or any outstanding options shall become
exercisable in full immediately prior to such event.
(b) Substitute Options. The Company may grant options under the
Plan in substitution for options held by employees of another corporation who
become employees of the Company, or a subsidiary of the Company, as the result
of a merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the
circumstances.
17. No Special Employment Rights.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time
to terminate such employment or to increase or decrease the compensation of the
optionee.
18. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares
received upon such exercise will not constitute compensation with respect to
which any other employee benefits of such employee are determined, including,
without limitation, benefits under any bonus, pension, profit-sharing, life
insurance or salary continuation plan, except as otherwise specifically
determined by the Board of Directors.
19. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, except that if at any time the
approval of the shareholders of the Company is required under Section 422 of
the Code or any successor provision with respect to Incentive Stock Options, or
under Rule 16b-3, the Board of Directors may not effect such modification or
amendment without such approval.
(b) The termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his or her rights under
an option previously granted to him or her. The Board of Directors may amend,
modify or terminate any outstanding option, including, but not limited to,
substituting therefore another option of the same or different type, changing
the date of exercise, and converting an Incentive Stock Option to an option
which is not an Incentive Stock Option, provided that the optionee's consent to
such action shall not be required unless the Board of Directors determines that
the action, taking into account any related actions, would not materially and
adversely affect the optionee. The Board of Directors shall have the right to
amend or modify (i) the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax
treatment (including
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deferral of taxation upon exercise) as may be afforded incentive stock options
under Section 422 of the Code and (ii) the terms and provisions of the Plan and
of any outstanding option to the extent necessary to ensure the qualification
of the Plan under Rule 16b-3.
20. Withholding.
The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect
to satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of
the shares used to satisfy such withholding obligation shall be determined by
the Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section
20(a) may only satisfy his or her withholding obligation with shares of Common
Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting
or other similar requirements.
21. Reserved.
22. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted
by the Board of Directors, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve
months after the date of the Board's adoption of the Plan, options previously
granted under the Plan shall not vest and shall terminate and no options shall
be granted thereafter. Amendments to the Plan not requiring shareholder
approval shall become effective when adopted by the Board of Directors;
amendments requiring shareholder approval (as provided in Section 19) shall
become effective when adopted by the Board of Directors, but no option granted
after the date of such amendment shall become exercisable (to the extent that
such amendment to the Plan was required to enable the Company to grant such
option to a particular person) unless and until such amendment shall have been
approved by the Company's shareholders. If such shareholder approval is not
obtained within twelve months of the Board's adoption of such amendment, any
options granted on or after the date of such amendment shall terminate to the
extent that such amendment was required to enable the Company to grant such
option to a particular optionee. Subject to this limitation, options may be
granted under the Plan at any time after the effective date and before the date
fixed for termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with
Section 16, the Plan shall terminate upon the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the Board of
Directors. Options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
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23. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards
or options granted to participants who are foreign nationals or employed
outside the United States to recognize differences in laws, rules, regulations
or customs of such foreign jurisdictions with respect to tax, securities,
currency, employee benefit or other matters.
Adopted by the Board of Directors on June 14, 1996.
Amended by the Board of Directors on June 30, 1999.
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