1
EXHIBIT 4.3
MEDIA LOGIC, INC.
1991 STOCK OPTION PLAN
----------------------
(1995 Restatement)
------------------
1. DEFINITIONS. As used in this 1991 Stock Option Plan of
Media Logic, Inc., the following terms shall have the following meanings:
Code means the Internal Revenue Code of 1986, as amended.
----
COMMITTEE means a committee comprised of two or more Directors
of the Company, appointed by the Board of Directors of the Company,
responsible for the administration of the Plan, as provided in Section
4.
Company means Media Logic, Inc., a Massachusetts corporation.
-------
GRANT DATE means the date on which an Option is granted, as
specified in Section 7 or Section 10.
INCENTIVE OPTION means an Option that satisfies the
requirements of Section 422 of the Code.
MARKET VALUE means, as of a certain date, the fair market value
for a share of the Stock on such date as determined by the Committee.
NONSTATUTORY OPTION means an Option that will not be treated as
an Incentive Option.
OPTION means an option to purchase shares of the Stock granted
under the Plan, which shall be either an Incentive Option or a
Nonstatutory Option.
OPTION AGREEMENT means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
OPTIONEE means a person eligible to receive an Option, as
provided in Section 6 or Section 10, to whom an Option shall have been
granted under the Plan.
PERSON means any individual, corporation, partnership or other
person or entity, together with its "Affiliates" and "Associates" (as
defined in Rule 12b-2 under the Securities Exchange Act of 1934).
PLAN means this 1991 Stock Option Plan of the Company, as
amended.
A-1
2
STOCK means the Common Stock, $.01 par value per share, of the
Company.
2. PURPOSE. The Plan is intended to encourage ownership of the
Stock by employees, consultants and directors of the Company and its
subsidiaries and is intended to provide additional incentive for them to
promote the success of the Company's business. The Plan is intended to be an
incentive stock option plan within the meaning of Section 422 of the Code, but
not all Options granted hereunder are required to be or to remain Incentive
Options.
3. TERM OF THE PLAN. Options under the Plan may be granted on or
after July 25, 1991 but not later than July 24, 2001.
4. ADMINISTRATION. The Plan shall be administered by the
Committee. No member of the Committee shall have received an Option during
service on the Committee or during the one-year period preceding such service,
other than an Option received pursuant to Section 10. Subject to the
provisions of the Plan, the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to each option to
be granted by the Company to any employee of the Company or a subsidiary: (a)
whether the Option will be an Incentive Option or a Nonstatutory Option; (b)
the person to receive the Option; (c) the time of granting the Option; (d) the
number of shares subject to the Option; (e) the option price for any
Nonstatutory Option; (f) the vesting period (if any) applicable to, and the
term of, any Option; and (g) the restrictions (if any) to be imposed upon
transfer of shares of the Stock purchased by the Optionee upon the exercise of
the Option. The Committee shall have complete authority to interpret the Plan,
to prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective option agreements (which
need not be identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determination on
the matters referred to in this Section 4 shall be conclusive.
5. STOCK SUBJECT TO THE PLAN. The Plan covers 1,500,000 shares of
Stock, subject, however, to the provisions of Section 15. The number of shares
purchased pursuant to the exercise of options granted under the Plan and the
number of shares subject to outstanding options granted under the Plan shall be
charged against the shares covered by the Plan; but shares subject to options
which terminated without being exercised shall not be so charged. Shares to be
issued upon the exercise of options granted under the Plan may be either
authorized but unissued shares or shares held by the Company in its treasury.
If any option expires or terminates for any reason without having been
exercised in full, the shares not purchased thereunder shall again be available
for options thereafter to be granted.
6. ELIGIBILITY. An Incentive Option may be granted only to an
employee of the Company or one or more of its subsidiaries. A Nonstatutory
Option may be granted to any person designated by the Committee. Any person
who, within the meaning of Section 422(b)(6) of the Code, is deemed to own
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (or of a parent or subsidiary corporation
thereof) shall be eligible to receive an Incentive Option only if the option
price of such Incentive Option is at least 110% of the Market Value as of the
Grant Date and the term of such Incentive Option is not more than five years.
A-2
3
7. TIME OF GRANTING OPTIONS. Subject to the provisions of the
Plan, the granting of Options shall take place at the time specified by the
Committee.
8. OPTION PRICE. Subject to the provisions of the Plan, the
option price for each Incentive Option shall be the Market Value on the Grant
Date and the option price for each Nonstatutory Option shall be determined by
the Committee.
9. MAXIMUM SIZE OF OPTIONS. The aggregate Market Value of Stock
for which Incentive Options become exercisable by an Optionee for the first
time in any calendar year shall not exceed $100,000. To the extent that such
aggregate Market Value exceeds $100,000, those options intended to be Incentive
Options shall be treated as Nonstatutory Options. For purposes of this Section
9, all Incentive Options granted to an Optionee by the Company shall be
considered in the order in which they were granted, and the Market Value shall
be determined as of each Grant Date. The maximum number of Options which may
be granted in any fiscal year to any one individual is 200,000.
10. FORMULA AWARDS.
10.1. AUTOMATIC GRANTS. On each date that a Non-Employee
Director (as defined below) is elected or reelected to the Board
of Directors by the stockholders of the Company, such Non-Employee
Director shall receive a Nonstatutory Option for the purchase of the
number of shares of Stock determined by dividing $25,000 by the fair
market value of a share of Stock as of the Grant Date, or an option to
purchase a pro rata amount of shares if such director is elected or
reelected to serve less than a three-year term. Any Non-Employee
Director who is appointed by the Board of Directors shall receive on
the date of the next Annual Stockholders Meeting (or special meeting in
lieu thereof) of the Company a Nonstatutory Option to purchase a pro
rata number of Shares based upon the number of years, if any, until
such Non-Employee Director will stand for re-election to the Board of
Directors. On the date of the first Annual Meeting of Stockholders
after the date of the adoption of this 1994 Restatement of the Plan,
each Non-Employee Director who is not standing for election or
reelection at such Annual Meeting shall receive a Nonstatutory Option
to purchase (i) in the case of any such Non-Employee Director whose
term as a director expires at the Company's 1996 Annual Meeting of
Stockholders, the number of shares of Stock determined by dividing
$25,000 by the fair market value of a share of Stock as of the Grant
Date and multiplying such amount by 0.667 and (ii) in the case of any
such Non-Employee Director whose term as a director expires at the
Company's 1995 Annual Meeting of Stockholders, the number of shares of
Stock determined by dividing $25,000 by the fair market value of a
share of Stock as of the Grant Date and multiplying such amount by
0.333.
10.2. TERM AND VESTING. Each Option granted under Section
10.1 shall expire at the earlier of (i) 90 days after such
Non-Employee Director no longer serves as a director of the Company or
(ii) the end of ten years and one day after the Grant Date. Each Option
shall be fully exercisable on the Grant Date.
10.3. NON-EMPLOYEE DIRECTOR. For purposes of the grant of
Options hereunder upon
A-3
4
election or reelection to the Board of Directors, "Non-Employee
Director" shall mean a member of the Board of Directors who is not an
employee of the Company on the date of such election or reelection, as
applicable.
11. EXERCISE OF OPTION. In order to exercise an Option, the
Optionee shall give written notice of exercise to the Chief Financial Officer
of the Company. The Optionee shall enclose a personal check equal to the
option price or shares of Stock with a Market Value on the purchase date at
least equal to the option price. The Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares then being
purchased by him. If any law or applicable regulation of the Securities and
Exchange Commission or other body having jurisdiction in the premises shall
require the Company or the Optionee to take any action in connection with
shares being purchased upon exercise of the option, exercise of the option and
delivery of the certificate or certificates for such shares shall be postponed
until completion of the necessary action. Each outstanding Option shall be
reduced by one share for each share of the Stock purchased upon exercise of the
option.
12. PURCHASE FOR INVESTMENT. Unless the shares to be issued upon
exercise of an Option have been effectively registered under the Securities Act
of 1933 as now in force or hereafter amended, the Company shall be under no
obligation to issue any shares covered by any Option unless the person who
exercises the Option, in whole or in part, shall give a written representation
to the Company, satisfactory in form and substance to its counsel and upon
which the Company may reasonably rely, that he or she is acquiring such shares
as an investment and not with a view to, or for sale in connection with, the
distribution of any such shares. Each certificate representing a share of
Stock issued pursuant to the exercise of an Option may bear a reference to any
investment representation made in accordance with this Section 12 and to the
fact that no registration statement has been filed with the Securities and
Exchange Commission in respect to that Stock.
13. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION
OF SPECIFIED HOLDING PERIOD.
13.1. Whenever shares are to be issued upon exercise of an
Option, the Company shall have the right to require the Optionee to
remit to the Company an amount sufficient to satisfy federal, state,
local or other withholding tax requirements (whether so required to
secure for the Company an otherwise available tax deduction or
otherwise) if and to the extent required by law prior to the delivery
of any certificate or certificates for such shares.
13.2. The Company may require as a condition to the issuance
of shares covered by any Incentive Option that the person exercising
the Option give a written representation to the Company, satisfactory
in form and substance to its counsel and upon which the Company may
reasonably rely, that he or she will report to the Company any
disposition of those shares prior to the expiration of the holding
periods specified by Section 422(a)(1) of the Code. If and to the
extent that the disposition imposes upon the Company federal, state,
local or other withholding tax requirements, or any such withholding is
required to secure for the Company an otherwise available tax
deduction, the Company shall have the right to require that the person
making the disposition remit to the Company an amount sufficient to
satisfy those requirements.
A-4
5
14. TRANSFERABILITY OF OPTIONS. Options shall not be transferable,
otherwise than by will or the laws of descent and distribution, and may be
exercised during the life of the Optionee only by the Optionee; provided,
however, the Committee may grant Options that are transferable, without payment
of consideration, to immediate family members of the Optionee or to trusts or
partnerships for such family members. The Committee may also amend outstanding
Options to provide for such transferability.
15. ADJUSTMENT OF NUMBER OF SHARES. Each Option Agreement shall
provide that in the event of any stock dividend payable in the Stock or any
split-up or contraction in the number of shares of the Stock occurring after
the date of the agreement and prior to the exercise in full of the Option, the
number of shares for which the Option may thereafter be exercised shall be
proportionately adjusted. Each Option Agreement shall also provide that in
case of any reclassification or change of outstanding shares of the Stock,
shares of stock or other securities equivalent in kind and value to those
shares which a holder would have received if he or she had held the full number
of shares of the Stock subject to the Option immediately prior to such
reclassification or change and had continued to hold those shares (together
with all other shares, stock and securities thereafter issued in respect
thereof) to the time of exercise of the Option shall thereupon be subject to
the Option. Each Option Agreement shall also provide that in case of any
consolidation or merger of the Company with or into another company or in case
of any sale or conveyance to another company or entity of the property of the
Company as a whole, the Option shall terminate and, to the extent that the
value of the shares of stock, other securities or cash which a stockholder is
entitled to receive for one share of Stock in connection with such transaction
exceeds the option price of the Option, the Optionee shall be entitled to
receive either cash or shares of stock or other securities equivalent in kind
to the cash or those shares which a holder would have received if he or she had
exercised the Option (to the extent then exercisable) and held the number of
shares of the Stock upon such exercise immediately prior to such consolidation,
merger, sale or conveyance and with a value equal to such excess amount
multiplied by the number of shares he or she would have received if he or she
so exercised the Option at such time. Each Option Agreement shall further
provide that upon dissolution or liquidation of the Company, the Option shall
terminate, but the Optionee (if at the time in the employ of the Company or any
of its subsidiaries) shall have the right, immediately prior to such
dissolution or liquidation, to exercise the Option to the full extent not
theretofore exercised. No fraction of a share shall be purchasable or
deliverable, but in the event any adjustment of the number of shares covered by
the Option shall cause such number to include a fraction of a share, such
fraction shall be adjusted to the nearest smaller whole number of shares. In
the event of changes in the outstanding Common Stock by reason of any stock
dividend, split-up, contraction, reclassification, or change of outstanding
shares of the Stock of the nature contemplated by this Section 15, the number
of shares of the Stock available for the purpose of the Plan as stated in
Section 5 shall be correspondingly adjusted.
16. LIMITATION OF RIGHTS IN OPTION STOCK. The Optionee shall have
no rights as a stockholder in respect of shares as to which his or her Option
shall not have been exercised, certificates issued and delivered and payment as
herein provided made in full, and shall have no rights with respect to such
shares not expressly conferred by this Plan.
17. STOCK RESERVED. The Company shall at all times during the term
of the Options reserve and keep available such number of shares of the Stock as
will be sufficient to satisfy the requirements
A-5
6
of this Plan and shall pay all other fees and expenses necessarily incurred by
the Company in connection therewith.
18. PURCHASE FOR INVESTMENT. The Optionee shall make such
representations with respect to investment intent and the method of disposal of
optioned shares as the Board of Directors of the Company may deem advisable in
order to assure compliance with applicable securities laws.
19. TERMINATION AND AMENDMENT OF PLAN. The Board of Directors of
the Company may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable, provided, however, that, if required by
applicable law with respect to a certain modification, the Board shall seek the
approval of such modification by the holders of a majority of the outstanding
Stock present or represented and entitled to vote at a meeting of the
stockholders of the Company, and further provided, that the Board of Directors
of the Company may not amend the Plan more than once in any six (6) month
period so as to modify Section 10, except that the Board of Directors may make
an amendment to Section 10 to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations under either such statute. No termination or amendment of the Plan
may, without the consent of the Optionee to whom any Option shall theretofore
have been granted, adversely affect the rights of that Optionee under that
Option.
A-6