International Telecommunication Data Systems, Inc.
1996 STOCK INCENTIVE PLAN
Purpose
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The purpose of this 1996 Stock Incentive Plan (the "Plan") of
International Telecommunication Data Systems, Inc., a Delaware corporation (the
"Company"), is to enhance the profitability of the Company for the benefit of
the stockholders by providing equity ownership opportunities and
performance-based incentives to attract, retain and motivate key employees,
directors, consultants and others who make important contributions to the
Company, and to better align their interests with those of the stockholders.
Except where the context otherwise requires, the term "Company" shall include
all present and future subsidiaries of International Telecommunication Data
Systems, Inc. as defined in Section 424(f) of the Internal Revenue Code of 1986,
as amended, and any regulations promulgated thereunder (the "Code") (a
"Subsidiary").
Eligibility
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All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, stock appreciation rights,
performance shares, restricted stock, or other stock based awards (each, an
"Award") under the Plan. Any person who has been granted an Award under the Plan
shall be deemed a "Participant".
Administration, Delegation
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Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable
from time to time, to interpret the provisions of the Plan, and to correct any
defects in the Plan or an Award. No member of the Board shall be liable for any
action or determination relating to the Plan made in good faith. All decisions
by the Board shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award.
Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards [and all determinations under the Plan with
respect thereto], provided that the Board shall fix the maximum amount of such
Awards to be made by
such executive officers and a maximum amount for any one Participant.
Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees, each consisting of not less than two members
of the Board (a "Committee"). If and when the common stock, $.01 par value per
share, of the Company (the "Common Stock") is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the Board shall appoint one such
Committee, each member of which shall be a "outside director" within the meaning
of Section 162(m) of Code ("Section 162(m)") and a "non-employee director" as
defined in Rule 16b-3 promulgated under the Exchange Act. All references to the
Board in the Plan shall mean a Committee or the Board.
Stock Available for Awards
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Number of Shares. Subject to adjustment under Section 4(c) below,
Awards may be made under the Plan for up to 1,000,000 shares of Common Stock. If
any Award expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part or results in any Common
Stock not being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options (as defined hereinafter), to any limitation
required under the Code. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
Per-Participant Limit. Subject to adjustment under Section 4(c), for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares with respect to which an Award may be granted to any
Participant under the Plan shall be 100,000 per calendar year. The per
Participant limit described in this Section 4(b) shall be construed and applied
consistent with Section 162(m).
Adjustment to Common Stock. In the event that the Board, in its sole
discretion, determines that any stock dividend, extraordinary cash dividend,
recapitalization, reorganization, split-up, spin-off or other similar
transaction affects the Common Stock such that an adjustment is required in
order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Board may equitably adjust any or all of (i)
the total number and kind of shares issuable under the Plan, (ii) the number and
kind of shares subject to Awards then outstanding, and
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(iii) the exercise, conversion price or other terms with respect to any
outstanding Award. The number of shares resulting from any such adjustment shall
always be a whole number.
Stock Options
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General. Subject to the provisions of the Plan, the Board may award
options to purchase Common Stock (an "Option") and determine the number of
shares of Common Stock to be covered by each Option, the exercise price of such
Option and the conditions and limitations applicable to the exercise of such
Option, including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable. An Option which is not intended to
be an Incentive Stock Option (as defined hereinafter) shall be designated a
"Nonstatutory Stock Option".
Incentive Stock Options. The terms and conditions of an Option that
the Board intends to be an "incentive stock option" as defined in Section 422 of
the Code (an "Incentive Stock Option") shall be subject to and shall be
construed consistent with the requirements of Section 422 of the Code.
Exercise Price. The Board shall establish the exercise price at the
time each Option is awarded and specify it in the applicable option agreement.
Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.
Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:
in cash or by check, payable to the order of the Company;
except as the Board may otherwise determine or provide in an
Option, delivery of an irrevocable and unconditional undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a
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broker to deliver promptly to the Company cash or a check sufficient to
pay the exercise price;
to the extent permitted by the Board at or after the award of
the Option (i) by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by the Board in good faith
("Fair Market Value"), (ii) delivery of a promissory note of the Participant to
the Company on terms determined by the Board, or (iii) payment of such other
lawful consideration as the Board may determine; or
any combination of the above permitted forms of payment.
Stock Appreciation Rights
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Grant and Payment. The Board may grant Awards entitling recipients on
exercise of such Awards to receive an amount, in cash or Common Stock or a
combination thereof (such form to be determined by the Board), determined in
whole or in part by reference to appreciation in the Fair Market Value of the
Common Stock between the date of grant of the Award and the exercise of the
Award (a "Stock Appreciation Right" or an "SAR"). The Board in its sole
discretion shall determine the terms and conditions of any SAR.
Grant of SARs in Tandem with Options. SARs may be granted in
tandem with, or independently of, Options granted under the Plan. If an SAR is
granted in tandem with an Option, the exercise of the Option shall cause a
proportional reduction in SARs outstanding to a Participant's credit which were
granted in tandem with the Option; and the payment of SARs shall cause a
proportional reduction of the shares of Common Stock under such Option. An SAR
granted in tandem with an Incentive Stock Option shall have such terms and
conditions as shall be required for the incentive stock option to qualify as an
Incentive Stock Option.
Performance Shares
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The Board may make Awards entitling recipients to acquire shares of
Common Stock on a future date upon the attainment of specified performance goals
("Performance Share Awards"). The Board may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. The Board in its sole discretion shall determine the performance goals,
the periods during which performance is to be measured, and all other terms and
conditions applicable to a Performance Share Award.
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Restricted Stock
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Grants. The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price (or to require
forfeiture of such shares if issued at no cost) from the recipient in the event
that conditions specified by the Board in the applicable Award are not satisfied
prior to the end of the applicable restriction period or periods established by
the Board for such Award ("Restricted Stock Award").
Terms and Conditions. The Board in its sole discretion shall
determine the terms and conditions of any such Restricted Stock Award, including
the conditions for repurchase (or forfeiture) and the issue price, if any. Any
stock certificates issued in respect of a Restricted Stock Award shall be
registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in
blank, with the Company (or its designee). At the expiration of the restriction
period, the Company (or such designee) shall deliver such certificates to the
Participant or if the Participant has died, to the beneficiary designated by a
Participant, in a manner determined by the Board, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's estate.
Other Stock Based Awards
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The Board shall have the right to grant other Awards based upon the
Common Stock, including the grant of shares based upon certain conditions and
the grant of securities convertible into Common Stock.
General Provisions Applicable to Awards
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Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered 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 Participant, shall be
exercisable only by the Participant. References to Participant, to the extent
relevant in the context, shall include references to authorized transferees.
Documentation. Each Award under the Plan shall be
evidenced by an instrument in such form as the Board shall determine delivered
to the Participant
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specifying the terms and conditions thereof.
Board Discretion. Except as otherwise provided by the Plan,
each type of Award may be made alone, in addition to or in relation to any other
type of Award. The terms of each type of Award need not be identical, and the
Board need not treat Participants uniformly.
Termination of Status. The Board shall determine the effect on
an Award of the disability, death, retirement, authorized leave of absence or
other termination of employment or other status of a Participant and the extent
to which, and the period during which, the Participant, the Participant's legal
representative, conservator guardian or Designated Beneficiary may exercise
rights under the Award.
Mergers, Etc.
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Consequences of Mergers, etc. In the event of a consolidation
or merger involving the Company or a sale of all or substantially all the
Company's assets (an "Acquisition") or in the event of a liquidation of the
Company, the Board, 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 Awards: (i) provide that such Awards shall
be assumed, or substantially equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof) on such terms as
the Board determines to be appropriate; (ii) upon written notice to
Participants, provide that all unexercised or unvested Awards will terminate
upon the consummation of a transaction except to the extent exercised by the
Participant within a specified period following the date of such notice; (iii)
in the event of an Acquisition 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 Acquisition (the "Acquisition Price"), make or
provide for a cash payment to each Participant, on or before the consummation of
the Acquisition, equal to the difference, if any, between (A) the Acquisition
Price times the number of shares of Common Stock subject to outstanding Award of
such Participant (whether or not such Award is fully vested) and (B) the
aggregate exercise price, if any, of all such outstanding Awards, in exchange
for the termination of all such Awards held by such Participant; and (iv) upon
written notice to Participants, provide that all outstanding Awards will become
exercisable or realizable in full prior to the effective date of such
Acquisition and will terminate upon the consummation of such Acquisition except
to the extent exercised by the Participant within a specified period following
the date of such notice.
Assumption of Options Upon Mergers, etc. The Board may
grant
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Awards under the Plan in substitution for stock and stock based-awards
held by employees of another corporation who become employees of the Company as
a result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.
Withholding. Each Participant shall pay to the Company, or
make provision satisfactory to the Board for payment of, any taxes required by
law to be withheld in respect of Awards to such Participant under the Plan no
later than the date of the event creating the tax liability. In the Board's
discretion, and subject to such conditions as the Board may establish, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value. The Company may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to a Participant.
Amendment of Award. The Board may amend, modify or terminate
any outstanding Award, including but not limited to, substituting therefor
another Award of the same or a different type, changing the date of exercise or
realization, converting an Incentive Stock Option to a Nonstatutory Stock
Option, and accelerating the exercise or vesting of any Award, provided that the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
Conditions on Delivery of Stock. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until (i)
all conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws, stock exchange or stock market rules
and regulations, and (iii) the Participant has executed and delivered to the
Company such representations or agreements as the Company may consider
appropriate to satisify the requirements of any applicable laws.
Miscellaneous
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No Right To Employment or Other Status. No person shall have
any claim or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continued employment by or
other relationship with the Company. The Company expressly reserves the right at
any time to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan, except as expressly provided in
the applicable Award.
No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
under the Plan until becoming the record holder thereof.
Effective Date and Term of Plan. The Plan shall become
effective on the date on which it is approved by the stockholders of the
Company. Grants of Awards under the Plan may be made prior to that date (but
contemporaneous with or after Board adoption of the Plan), subject to approval
of the Plan by such stockholders. No Awards shall be granted under the Plan
after the completion of ten years from the date on which the Plan was adopted by
the Board, but awards previously granted may extend beyond that date.
Amendment of Plan. The Board may amend, suspend or terminate
the Plan or any portion thereof at any time, provided that no amendment shall be
made without stockholder approval if (i) such approval is necessary to comply
with any applicable tax or regulatory requirements, including any securities
laws, stock exchange or stock market, or (ii) such amendment increases the
number of shares of Common Stock available under the Plan pursuant to Section
4(a), other than such increases authorized under Section 4(c). Amendments
requiring stockholder approval shall become effective when adopted by the Board,
but no Award granted after the date of such amendment shall become exercisable
or vested (to the extent that such amendment to the Plan was required to grant
such Award to a particular Participant) unless and until such amendment shall
have been approved by the Company's stockholders. If such stockholder approval
is not obtained within twelve months of the Board's adoption of such amendment,
any Award granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular Participant.
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
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