EXHIBIT 10.3
FIREPOND, INC.
AMENDED AND RESTATED
1997 STOCK PLAN
FIREPOND, INC.
AMENDED AND RESTATED 1997 STOCK PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS
The name of this plan is the Firepond, Inc. 1997 Stock Plan (the "Plan").
The purpose of the Plan is to enable Firepond, Inc. (the "Company") to retain
and attract executives and other key employees, directors and consultants who
contribute to the Company's success by their ability, ingenuity and industry,
and to enable such individuals to participate in the long-term success and
growth of the Company by giving them a proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
a. "BOARD" means the Board of Directors of the Company as it may be
comprised from time to time.
b. "CAUSE" means means (i) any material breach by the optionee of any
agreement to which the optionee and the Company or its Subsidiaries
are parties, including breach of covenants not to compete and
covenants relating to the protection of confidential information and
proprietary rights of the Company or its Subsidiaries which breach is
not cured pursuant to the terms of such agreement, (ii) any act (other
than retirement) or omission to act by the optionee which would
reasonably be likely to have a material adverse effect on the business
of the Company or its Subsidiaries or on the optionee's ability to
perform services for the Company or its Subsidiaries, including,
without limitation, the conviction or plea of guilty or nolo contendre
to any crime (other than ordinary traffic violations) which impairs
the optionee's ability to perform his or her duties, (iii) any
material misconduct or willful and deliberate non-performance of
duties by the optionee in connection with the business or affairs of
the Company or its Subsidiaries, (iv) the optionee's theft,
dishonesty, or falsification of the Company's or its Subsidiaries'
documents or records, or (v) the optionee's improper use or disclosure
of the Company's or its Subsidiaries' confidential or proprietary
information. All references herein to the Company or its Subsidiaries
shall include any successor entity thereof.
c. "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
d. "COMMITTEE" means the Committee referred to in Section 2 of the Plan.
If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan shall be exercised by the Board,
unless the Plan specifically states otherwise.
e. "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent Corporation or a Subsidiary of the Company to
render services and who is compensated for such services and who is
not an employee of the Company or any Parent Corporation or Subsidiary
of the Company. A director who is not an employee may serve as a
Consultant.
f. "COMPANY" means Firepond, Inc., a corporation organized under the laws
of the State of Delaware (or any successor corporation).
g. "DEFERRED STOCK" means an award made pursuant to Section 8 below of
the right to receive stock at the end of a specified deferral period.
h. "DISABILITY" means permanent and total disability as determined by the
Committee.
i. "EARLY RETIREMENT" means retirement, with consent of the Committee at
the time of retirement, from active employment with the Company and
any Subsidiary or Parent Corporation of the Company.
j. "FAIR MARKET VALUE" of Stock on any given date shall be determined by
the Committee as follows:
(a) if the Stock is listed for trading on one or more national
securities exchanges, or is traded on The Nasdaq Stock Market,
the last reported sales price on the principal such exchange or
The Nasdaq Stock Market on the date in question, or if such Stock
shall not have been traded on such principal exchange on such
date, the last reported sales price on such principal exchange or
The Nasdaq Stock Market on the first day prior thereto on which
such Stock was so traded, or
(b) if the Stock is not listed for trading on a national securities
exchange or The Nasdaq Stock Market, but is traded in the
over-the-counter market, including The Nasdaq Small Cap Market,
the closing bid price for such Stock on the date in question, or
if there is no such bid price for such Stock on such date the
closing bid price on the first day prior thereto on which such
price existed; or
(c) if neither (a) or (b) is applicable, by any means fair and
reasonable by the Committee, which determination shall be final
and binding on all parties.
k. "INCENTIVE STOCK OPTION" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
l. "NON-EMPLOYEE DIRECTOR" shall have the meaning set forth in Rule
16b-3(b)(3) as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, or any
successor definition adopted by the Commission.
m. "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option, and is intended to be and is designated as a
"Non-Qualified Stock Option."
n. "NORMAL RETIREMENT" means retirement from active employment with the
Company and any Subsidiary or Parent Corporation of the Company on or
after age 65.
o. "OUTSIDE DIRECTOR" means a director who
(a) is not a current employee of the Company or any member of an
affiliated group which includes the Company,
(b) is not a former employee of the Company who receives compensation
for prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year,
(c) has not been an officer of the Company;
(d) does not receive remuneration from the Company, either directly
or indirectly, in any capacity other than as a director, except
as otherwise permitted under Code Section 162(m) and regulations
thereunder. For this purpose, remuneration includes any
payment in exchange for goods or services. This definition shall
be further governed by the provisions of Code Sections 162(m) and
regulations promulgated thereunder.
p. "PARENT CORPORATION" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if each of
the corporations (other than the Company) owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one
of the other corporations in the chain.
q. "RESTRICTED STOCK" means an award of shares of Stock that are subject
to restrictions under Section 7 below.
r. "RETIREMENT" means Normal Retirement or Early Retirement.
s. "STOCK" means the Common Stock of the Company.
t. "STOCK APPRECIATION RIGHT" means the right pursuant to an award
granted under Section 6 below to surrender to the Company all or a
portion of a Stock Option in exchange for an amount equal to the
difference between
(i) Fair Market Value, as of the date such Stock Option or such
portion thereof is surrendered, of the shares of Stock covered by
such Stock Option or such portion thereof and
(ii) the aggregate exercise price of such Stock Option or such portion
thereof.
u. "STOCK OPTION" means any option to purchase shares of Stock granted
pursuant to Section 5 below.
v. "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of
the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
w. "TRANSACTION" means the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the Company
on a consolidated basis to an unrelated person or entity, (iii) a
merger, reorganization or consolidation between the Company and
another person or entity (other than a holding company or Subsidiary
of the Company) as a result of which, the holders of the Company's
outstanding voting power immediately prior to such transaction do not
own a majority of the outstanding voting power of the surviving or
resulting entity immediately upon completion of such transaction, (iv)
the sale of all of the Stock of the Company to an unrelated person or
entity or (v) any other transaction in which the owners of the
Company's outstanding voting power prior to such transaction do not
own at least a majority of the outstanding voting power of the
relevant entity after the transaction, in each case, regardless of the
form thereof
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board of Directors or by a Committee
of not less than two directors, all of whom shall be Non-Employee Directors upon
the Company becoming subject to the insider reporting requirements of Section 16
of the Securities Exchange Act of 1934, as amended, and also Outside Directors
upon the Company becoming subject to the requirements of Rule 162(m) of the
Code. Committee members shall be appointed by the Board of Directors of the
Company and shall serve
at the pleasure of the Board. Any and all functions of the Committee specified
in the Plan may be exercised by the Board, unless the Plan specifically states
otherwise.
The Committee shall have the power and authority to grant to eligible
employees, directors or Consultants, pursuant to the terms of the Plan: (i)Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, or (iv)Deferred
Stock awards. In particular, the Committee shall have the authority:
(i) to select the officers, directors and other key employees
of the Company and its Subsidiaries and other eligible
persons to whom Stock Options, Stock Appreciation Rights,
Restricted Stock and Deferred Stock awards may from time to
time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock and Deferred Stock awards, or a
combination of the foregoing, are to be granted hereunder,
(iii) to determine the number of shares to be covered by each
such award granted hereunder,
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder
(including but not limited to, any restriction on any Stock
Option or other award and/or the shares of Stock relating
thereto), which authority shall be exclusively vested in
the Committee (and not the Board) for purposes of
establishing performance criteria used with Restricted
Stock and Deferred Stock awards provided, however, in the
event of a merger or asset sale, the applicable provisions
of Sections 5(c) and 7(c) of the Plan shall govern. the
acceleration of the vesting of any Stock option or awards;
(v) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect
to an award under this Plan shall be deferred either
automatically or at the election of the participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
form time to time, deem advisable; to interpret the terms and provisions of the
Plan as it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any agreements
relating thereto); and to otherwise supervise the administration of the Plan.
The Committee may delegate to executive officers of the Company the authority to
exercise the powers specified in (i), (ii), (iii), (iv) and (v) above with
respect to persons who are not executive officers of the Company.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and Plan
participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 14,095,222. Such shares may consist, in whole or in
part, of authorized and unissued shares.
Subject to paragraph (b)(iv) of Section 6 below, if any shares that have
been optioned cease to be subject to Stock Options or if any shares subject to
any Restricted Stock or Deferred Stock award granted hereunder are forfeited or
such award otherwise terminates without a payment being made to the participant,
such shares shall again be available for distribution in connection with future
awards under the Plan.
In the event of any merger; reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, and in the number of
shares subject to Restricted Stock or Deferred Stock awards granted under the
Plan as may be determined by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock Appreciation Right associated with
any Option.
SECTION 4. ELIGIBILITY
Officers, directors, other key employees of the Company and Subsidiaries,
and Consultants who are responsible for or contribute to the management, growth
and profitability of the business of the Company and its Subsidiaries are
eligible to be granted Stock Options, Stock Appreciation Rights, Restricted
Stock or Deferred Stock awards under the Plan. The optionees and participants
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, and the Committee shall determine, in its
sole discretion, the number of shares covered by each award.
Notwithstanding the foregoing, upon the Company becoming subject to the
requirements of Section 162(m) of the Code, no person shall receive grants or
awards under this Plan which exceed 1,500,000 shares during any fiscal year of
the Company.
SECTION 5. STOCK OPTIONS.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)Incentive
Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock Options
shall be granted under the Plan after May 7, 2007.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options (in each
case with or without Stock Appreciation Rights). To the extent that any option
does not qualify its an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. The preceding sentence shall not preclude any modification or
amendment to an outstanding Incentive Stock Option, whether or not such
modification or amendment results in disqualification of such Stock Option as an
Incentive Stock Option provided the optionee consents in writing to the
modification or amendment.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the
time of grant. In no event shall
the option price per share of Stock purchasable under an
Incentive Stock Option be less than 100% of Fair Market Value on
the date the option is granted. If an employee owns or is deemed
to own (by reason of the attribution rules applicable under
Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is
granted to such employee, the option price shall be no less than
110% of the Fair Market Value of the Stock on the date the option
is granted.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable
more than ten years after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than10% of the combined
voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is
granted to such employee, the term of such option shall be no
more than five years from the date of grant.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time
or times as determined by the Committee at or after grant. If the
Committee provides, in its discretion, that any option is
exercisable only in installments, the Committee may waive such
installment exercise provisions at any time, provided, however,
that upon the Company becoming subject to the requirements of
Section 16 of the Securities Exchange Act of 1934, as amended, a
Stock Option granted to an officer, director or 10% shareholder
of the Company shall not be exercisable for a period of six (6)
months after the date of grant UNLESS the Stock Option has been
approved by the Board, the ------ Committee or shareholders of
the Company. Notwithstanding anything contained in the Plan to
the contrary, the Committee may, in its discretion, accelerate,
extend or vary the term of any Stock Option or any installment
thereof, whether or not the optionee is then employed by the
Company, if such action is deemed to be in the best interests of
the Company
The grant of an option pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge, exchange or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business
or assets.
(d) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part at any time during the option period by giving written
notice of exercise to the Company specifying the number of shares
to be purchased. Such notice shall be accompanied by payment in
full of the purchase price, either by check, or by any other form
of legal consideration deemed sufficient by the Committee and
consistent with the Plan's purpose and applicable law, including
promissory notes or a properly executed exercise notice together
with irrevocable instructions to a broker acceptable to the
Company to promptly deliver to the Company the amount of sale or
loan proceeds to pay the exercise price. As determined by the
Committee at the time of grant or exercise, in its sole
discretion, payment in full or in part may also be made in the
form of Stock already owned by the optionee (which in the case of
Stock acquired upon exercise of an option have been owned for
more than six months on the date of surrender)or, in the case of
the exercise of a Non-Qualified Stock Option, Restricted Stock or
Deferred Stock subject to an award hereunder (based, in each
case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee), provided,
however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares may
be authorized only at the time the option is granted, and
provided further that in the event payment is made in the form of
shares of Restricted Stock or a Deferred Stock award, the
optionee will receive a portion of the option shares in the form
of and in an amount equal to, the Restricted Stock or Deferred
Stock award tendered as payment by the optionee. If the terms of
an option so permit, an optionee may elect to pay all or part of
the option exercise price by having the Company withhold from the
shares of Stock that would otherwise be issued upon exercise that
number of shares of Stock having a Fair Market Value equal to the
aggregate option exercise price for the shares with respect to
which such election is made. No shares of Stock shall be issued
until full payment therefor has been made. An optionee shall
generally have the rights to dividends and other rights of a
shareholder with respect to shares subject to the option when the
optionee has given written notice of exercise, has paid in full
for such shares, and, if requested, has given the representation
described in paragraph (a) of Section 12.
(e) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the
laws of descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee
or by the optionee's legal representative or guardian in the
event of the optionee's incapacity. Notwithstanding the
foregoing, the Board in its sole discretion may provide in any
Stock Option agreement that the optionee may transfer, without
consideration for the transfer, his or her Non-Qualified Stock
Options to members of his or her immediate family, to trusts for
the benefit of such family members, or to partnerships in which
such family members are the only partners or to limited liability
companies in which such family members are the only members,
provided that the transferee agrees in writing with the Company
to be bound by all of the terms and conditions of this Plan and
the applicable Option.
(f) TERMINATION BY DEATH. Unless otherwise provided by the Committee,
if an optionee's employment by the Company and any Subsidiary or
Parent Corporation terminates by reason of death, the Stock
Option may thereafter be immediately exercised, to the extent
then exercisable, by the legal representative of the estate or by
the legatee of the optionee under the will, of the optionee, for
a Period of three months from the date of such death or until the
expiration of the stated term of the option, whichever period is
shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise provided by
the Committee, if an optionee's employment by the Company and any
Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter
be exercised, to the extent it was exercisable at the time of
termination due to Disability, but may not be exercised after
twelve months from the date of such termination of employment or
the expiration of the stated term of the option, whichever period
is the shorter. In the event of termination of employment by
reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, the option will thereafter
be treated as a Non-Qualified Stock Option.
(h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise provided by
the Committee, if an optionee's employment by the Company and any
Subsidiary or Parent Corporation terminates by reason of
Retirement and the terms of the Stock Option so provide, any
Stock Option held by such optionee may thereafter be exercised to
the extent it was exercisable at the time of such Retirement, but
may not be exercised after three months from the date of such
termination of employment or the expiration of the stated term of
the option, whichever period is the shorter. In the event of
termination of employment by reason of Retirement, if an
Incentive Stock Option is exercised after the expiation of the
exercise periods that apply for purposes
of Section 422 of the Code, the option will thereafter be treated
as a Non-Qualified Stock Option.
(i) OTHER TERMINATION. In the event an optionee's continuous status
as an employee or Consultant terminates (other than upon the
optionee's death, Retirement or Disability), the optionee may
exercise his or her Option, but only within such period of time
as is determined by the Committee, and only to the extent that
the optionee was entitled to exercise it at the date of
termination(but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant). In the case
of an Incentive Stock Option, the Committee shall determine such
period of time when the Option is granted. If such period of time
with respect to an Incentive Stock Option exceeds 90 days and the
Option is exercised after 90 days from the date of termination,
such Option shall thereafter be treated as a Non-Qualified Stock
Option. In the event an optionee's employment with the Company is
terminated for Cause, or under such other circumstances as the
Committee shall define in the option grant, all Stock Options
granted to such optionee shall immediately terminate.
(j) ANNUAL LIMIT ON INCENTIVE STOCK OPTION. The aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of
the Common Stock with respect to which an Incentive Stock Option
under this Plan or any other plan of the Company and any
Subsidiary or Parent Corporation is exercisable for the first
time by an optionee during any calendar year shall not exceed
$100,000.
(k) DIRECTORS. The Board of Directors may amend this Plan to provide
for annual automatic grants to directors who are not employees of
the Company upon such terms and conditions as the Board deems
advisable. In the event discretionary Stock Options are granted
to members of the Committee, such Stock Options shall be granted
by the Board.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Non-Qualified Stock Option, such rights may be
granted either at or after the time of the grant of such Option. In
the case of an Incentive Stock Option, such rights may be granted only
at the time of the grant of the Stock Option.
In the event Stock Appreciation Rights are granted to members of the
Committee, such rights shall be granted by the Board.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related stock Option shall not be reduced until the exercise
or termination of the related Stock Option exceeds the number of shares not
covered by the Stock Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in accordance
with paragraph (b) of this Section 6, by surrendering the applicable portion of
the related Stock Option. Upon such exercise and surrender, the optionee shall
be entitled to receive an amount determined in the manner prescribed in
paragraph (b) of this Section 6. Stock Options which have been so surrendered,
in whole or in part, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the
Plan, as shall be determined from time to time by the Committee,
including the following: Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the
Stock Options to which they relate shall be exercisable in accordance
with the provisions of Section 5 and this Section 6 of the Plan.
(i) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more
than, an amount in cash or shares of Stock equal in value
to the excess of the Fair Market Value of one share of
Stock over the option price per share specified in the
related option multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to
determine the form of payment.
(ii) Stock Appreciation Rights shall be transferable only when
and to the extent that the underlying Stock Option would be
transferable under Section 5 of the Plan.
(iii) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation
Right is related shall be deemed to have been exercised for
the purpose of the limitation set forth in Section 3 of the
Plan on the number of shares of Stock to be issued under
the Plan, but only to the extent of the number of shares
issued or issuable under the Stock Appreciation Right at
the time of exercise based on the value of the Stock
Appreciation Right at such time.
(iv) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when
the market price of the Stock subject to the Incentive
Stock Option exceeds the exercise price of such Option.
SECTION 7. RESTRICTED STOCK.
(a) ADMINISTRATION. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee
shall determine the officers, directors, key employees and Consultants
of the Company and Subsidiaries to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares
to be awarded, the time or times within which such awards may be
subject to forfeiture, and all other conditions of the awards. The
Committee may also condition the grant of Restricted Stock upon the
attainment of specified performance goals. The provisions of
Restricted Stock awards need not be the same with respect to each
recipient.
In the event Restricted Stock awards are granted to members of the
Committee, such awards shall be granted by the Board.
(b) AWARDS AND CERTIFICATES. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to
such award, unless and until such recipient has executed an agreement
evidencing the award and has delivered a fully executed copy thereof
to the Company, and has otherwise complied with the then applicable
terms and conditions.
(i) Each participant shall be issued a stock certificate in
respect of shares of Restricted Stock awarded under the
Plan. Such certificate shall be registered in the name of
the participant and shall bear an appropriate legend
referring to the
terms, conditions, and restrictions applicable to such
award, substantially in the following form:
"The transferability of this certificate and the
shares of stock represented hereby are subject to the terms
and conditions (including forfeiture) of the Firepond, Inc.
1997 Stock Plan and an Agreement entered into between the
registered owner and Firepond, Inc. Copies of such Plan and
Agreement are on file in the offices of Firepond, Inc.,
Waltham Woods Corporate Center, 890 Winter Street, Waltham,
MA 02451."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company
until the restrictions thereon shall have lapsed, and that,
as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in
blank, relating to the Stock covered by such award.
(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions
and conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing
with the date of such award (the "Restriction Period"), the
participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock awarded under
the Plan. Within these limits, the Committee may provide
for the lapse of such restrictions in installments where
deemed appropriate.
(ii) Except as provided in paragraph (c)(i) of this Section
7,the participant shall have, with respect to the shares of
Restricted Stock all of the rights of a shareholder of the
Company, including the right to vote the shares and the
right to receive any cash dividends. The Committee, in its
sole discretion, may permit or require the payment of cash
dividends to be deferred and, if the Committee so
determines, reinvested in additional shares of Restricted
Stock (to the extent shares are available under Section 3
and subject to paragraph (f) of Section 12). Certificates
for shares of unrestricted Stock shall be delivered to the
grantee promptly after, and only after, the period of
forfeiture shall have expired without forfeiture in respect
of such shares of Restricted Stock.
(iii) Subject to the provisions of the award agreement and
paragraph (c)(iv) of this Section 7, upon termination of
employment directorship (if the award was based on services
as a director) or consulting relationship for any reason
during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is unforeseeable emergency of
a participant still in service, the Committee may, in its
sole terminated (other than for Cause),including death,
Disability or Retirement or in the event of an discretion,
when it finds that a waiver would be in the best interest
of the Company, waive in whole or in part any or all
remaining restrictions with respect to such participant's
shares of Restricted Stock.
(v) Notwithstanding anything contained in the Plan to the
contrary, the Committee may, in its discretion, accelerate,
extend or vary the terms or the lapsing of the
restrictions placed on any Restricted Stock award granted
pursuant to this Plan if such action is deemed to be in the
best interests of the Company.
SECTION 8. DEFERRED STOCK AWARDS.
(a) ADMINISTRATION. Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall
determine the officers, directors, key employees and Consultants of
the Company and Subsidiaries to whom and the time or times at which
Deferred Stock shall be awarded, the number of Shares of Deferred
Stock to be awarded to any participant or group of participants, the
duration of the period (the "Deferral Period") during which and the
conditions under which, receipt of the Stock will be deferred, and the
terms and conditions of the award in addition to those contained in
paragraph (b) of this Section 8. The Committee may also condition the
grant of Deferred Stock upon the attainment of specified performance
goals. The provisions of Deferred Stock awards need not be the same
with respect to each recipient.
In the event Deferred Stock awards are granted to members of the Committee,
such awards shall be granted by the Board.
(b) TERMS AND CONDITIONS
(i) Subject to the provisions of this Plan and the award
agreement, Deferred Stock awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the
Deferral Period. At the expiration of the Deferral Period
(or Elective Deferral Period, where applicable), share
certificates shall be delivered to the participant, or his
legal representative, in a number equal to the shares
covered by the Deferred Stock award.
(ii) Amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a
Deferred Stock award will be paid to the participant
currently or deferred and deemed to be reinvested in
additional Deferred Stock or otherwise reinvested, all as
determined at the time of the award by the Committee, in
its sole discretion.
(iii) Subject to the provisions of the award agreement and
paragraph (b)(iv) of this Section 8, upon termination of
employment, directorship (if the award was based on
services as a director) or consulting relationship for any
reason during the Deferral Period for a given award, the
Deferred Stock in question shall be forfeited by the
participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for
Cause) including death, Disability or Retirement, or in the
event of an unforeseeable emergency of a participant still
in service, the Committee may, in its sole discretion, when
it finds that a waiver would be in the best interest of the
Company, waive in whole or in part any or all of the
remaining deferral limitations imposed hereunder with
respect to any or all of the participant's Deferred Stock.
(v) A participant may elect to further defer receipt of the
award for a specified period or until a specified event
(the "Elective Deferral Period"), subject in each case to
the Committee's approval and to such terms as are
determined by the Committee, all in its sole discretion.
Subject to any exceptions adopted by the Committee, such
election must generally be made prior to completion of one
half
of the Deferral Period for a Deferred Stock award (or for
an installment of such an award).
(vi) Each award shall be confirmed by, and subject to the terms
of, a Deferred Stock agreement executed by the Company and
the participant.
SECTION 9. TRANSFER LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent
Corporation or Subsidiary, or from a Parent Corporation or
Subsidiary to the Company, or from one Subsidiary to
another;
(b) a leave of absence, approved in writing by the Committee,
for military service or sickness, or for any other purpose
approved by the Company if the period of such leave does not
exceed ninety (90) days (or such longer period as the
Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved
in writing by the Committee, but only if the employee's
right to reemployment is guaranteed either by a statute or
by contract, and provided that, in the case of any leave of
absence, the employee returns to work within 30 days after
the end of such leave.
SECTION 10. AMENDMENTS AND TERMINATION.
The Board may amend, after, or discontinue the Plan, but no amendment
alteration, or discontinuation shall be made (i) which would adversely impair
the rights of an optionee or participant under a Stock Option, Restricted Stock
or other Stock-based award theretofore granted, without the optionee's or
participant's consent, or (ii) which without the approval of the shareholders of
the Company would cause the Plan to no longer comply with Rule 16b-3 under the
Securities Exchange Act of 1934, Section 422 of the Code or any other regulatory
requirements.
The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively to the extent such amendment is
consistent with the terms of this Plan, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. The Committee may also substitute new Stock Options for
previously granted Stock Options, including previously granted Stock Options
having higher Stock Option prices.
SECTION 11. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
SECTION 12. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant to a
Stock Option under the Plan to represent to and agree with the Company
in writing that the optionee is acquiring the shares without a view to
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock delivered under the Plan pursuant to
any Restricted Stock, Deferred Stock or other Stock-based awards shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem, advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Subject to paragraph (d) below, recipients of Restricted Stock,
Deferred Stock and other Stock-based awards under the Plan (other than
Stock Options) are not required to make any payment or provide
consideration other than the rendering of services.
(c) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases. The adoption of the Plan shall not confer upon any
employee of the Company or any Subsidiary any right to continued
employment with the Company or a Subsidiary, as the case may be, nor
shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any
time.
(d) Each participant shall, no later than the date as of which any part of
the value of an award first becomes includible as compensation in the
gross income of the participant for Federal income tax purposes, pay
to the Company, or make arrangements satisfactory to the Committee
regarding payment of, any Federal, state, or local taxes of any kind
required by law to be withheld with respect to the award. The
obligations of the Company under the Plan shall be conditional on such
payment or arrangements and the Company and Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from
any payment of any kind otherwise due to the participant. With respect
to any award under the Plan, if the terms of such award so permit, a
participant may elect by written notice to the Company to satisfy part
or all of the withholding tax requirements associated with the award
by (1) authorizing the Company to retain from the number of shares of
Stock that would otherwise be deliverable to the participant, or (ii)
delivering to the Company from shares of Stock already owned by the
participant, that number of shares having an aggregate Fair Market
Value equal to part or all of the tax payable by the participant under
this Section 12(d). Any such election shall be in accordance with, and
subject to, applicable tax and securities laws, regulations and
rulings.
(e) At the time grant, the Committee may provide in connection with any
grant made under this Plan that the shares of Stock received as a
result of such grant shall be subject to a repurchase right in favor
of the Company, pursuant to which the participant shall be required to
offer to the Company upon termination of employment for any reason any
shares that the participant acquired under the Plan, with the price
being the then Fair Market Value of the Stock or, in the case of a
termination for Cause, an amount equal to the cash consideration paid
for the Stock, subject to such other terms and conditions as the
Committee may specify at the time of grant. The Committee may, at the
time of the grant of an award under the Plan, provide the Company with
the right to repurchase, or require the forfeiture of shares of Stock
acquired pursuant to the Plan by any participant who at any time
within two years after termination of employment with the Company,
directly or indirectly competes with, or is employed by a competitor
of the Company.
(f) The reinvestment of dividends in additional Restricted Stock (or in
Deferred Stock or other types of Plan awards) at the time of any
dividend payment shall only be permissible in the Committee (or the
company's chief financial officer) certifies in writing that under
Section 3 sufficient shares are available for such reinvestment
(taking into account then outstanding Stock Options and other Plan
awards).
(g) The Plan is expressly made subject to the approval by shareholders of
the Company. If the Plan is not so approved by the shareholders on or
before one year after this Plan's adoption by the Board of Directors,
this Plan shall not come into effect. The offering of the shares
hereunder shall be also subject to the effecting by the Company of any
registration or qualification of the shares under any federal or state
law or the obtaining of the consent or approval of any governmental
regulatory body which the Company shall determine, in its sole
discretion, is necessary or desirable as a condition to or in
connection with, the offering or the issue or purchase of the shares
covered thereby.
(h) This Plan and all Options and actions taken thereunder shall be
governed by the laws of the Commonwealth of Massachusetts, applied
without regard to conflict of law principles thereof.
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Approved by the shareholders on May 7, 1997