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EXHIBIT 10.2
JT STORAGE, INC.
1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
ADOPTED ON MARCH 19, 1996
APPROVED BY STOCKHOLDERS ON ______________, 1996
1. PURPOSE.
(a) The purpose of the 1996 Non-Employee Directors' Stock Option
Plan (the "Plan") is to provide a means by which each director of JT Storage,
Inc. (the "Company") who is not otherwise at the time of grant an employee of
or consultant to the Company or of any Affiliate of the Company (each such
person being hereafter referred to as a "Non-Employee Director") will be given
an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now serving as Non-Employee Directors of the Company, to
secure and retain the services of persons capable of serving in such capacity,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of
the Company (the "Board") unless and until the Board delegates administration
to a committee, as provided in subparagraph 2(b).
(b) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members of the Board (the
"Committee"). If administration is delegated
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to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may
be adopted from time to time by the Board. The Board may abolish the Committee
at any time and revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate five hundred
thousand (500,000) shares of the Company's common stock. If any option granted
under the Plan shall for any reason expire or otherwise terminate without
having been exercised in full, the stock not purchased under such option shall
again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
Options shall be granted only to Non-Employee Directors of the
Company.
5. NON-DISCRETIONARY GRANTS.
(a) Each person who, after the date of adoption of the Plan by the
Board (the "Adoption Date"), is elected by the Board or the stockholders of the
Company for the first time to be a Non-Employee Director (other than (i) a
compensated Chairman of the Board) or (ii) any person appointed to the Board in
connection with the merger of Atari Corporation ("Atari") and the Company
pursuant to the Amended and Restated Agreement and Plan of Reorganization dated
April 8, 1996 between the Company and Atari (the "Merger
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Agreement")) shall automatically be granted, on the date of such initial
election, an option to purchase fifty thousand (50,000) shares of common stock
of the Company on the terms and conditions set forth herein.
(b) Each person who, is either (i) a Non-Employee Director (other
than a compensated Chairman of the Board) on the Adoption Date or (ii) first
appointed to the Board in connection with the merger of Atari and the Company
pursuant to the Merger Agreement, and who is re-elected as a Non-Employee
Director at or after the 1998 annual meeting of stockholders shall
automatically be granted, on the date of such re-election, an option to
purchase fifty thousand (50,000) shares of common stock of the Company on the
terms and conditions set forth herein. No more than one grant shall be made
under this subparagraph 5(b) to any individual Non-Employee Director.
(c) Each person who, after the date of his or her initial election
or re-election to the Board as described in subparagraph 5(a) or 5(b), is a
Non-Employee Director (other than a compensated Chairman of the Board) on the
date any and all previously granted Company options, Company stock purchases or
other similar rights to acquire stock of the Company, pursuant to the Plan or
otherwise, have become fully vested shall automatically be granted, on the date
of such full vesting, an option to purchase fifty thousand (50,000) shares of
common stock of the Company on the terms and conditions set forth herein. The
persons receiving grants under this subparagraph 5(c) shall include a Non-
Employee Director who was a compensated Chairman of the Board at the time of
his or her initial election or re-election as described above but is not
serving as such on the applicable date of full vesting.
6. OPTION PROVISIONS.
Each option shall be subject to the following terms and conditions:
(a) The term of each option commences on the date it is granted
and, unless sooner terminated as set forth herein, expires on the date
("Expiration Date") ten (10) years from the date of grant. If the optionee's
service as a Non-Employee Director or employee of or consultant to the Company
or any Affiliate terminates for any reason or for no reason, the option shall
terminate on the earlier of the Expiration Date or the date twelve (12) months
following
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the date of termination of all such service; provided, however, that if such
termination of service is due to the optionee's death, the option shall
terminate on the earlier of the Expiration Date or eighteen (18) months
following the date of the optionee's death. In any and all circumstances, an
option may be exercised following termination of the optionee's service as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate only as to that number of shares as to which it was exercisable as of
the date of termination of all such service under the provisions of
subparagraph 6(e).
(b) The exercise price of each option shall be equal to one
hundred percent (100%) of the Fair Market Value of the stock (as such term is
defined in subsection 9(e)) subject to such option on the date such option is
granted.
(c) The optionee may elect to make payment of the exercise price
under one of the following alternatives:
(i) Payment of the exercise price per share in
cash at the time of exercise; or
(ii) Provided that at the time of the exercise the
Company's common stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of shares of common stock of the Company
already owned by the optionee, held for the period required to avoid a charge
to the Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interest, which common stock shall be valued
at its Fair Market Value on the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of
payment specified in subparagraph 6(c)(i) and 6(c)(ii) above.
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Notwithstanding the foregoing, this option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or check) by the Company either
prior to the issuance of shares of the Company's common stock or pursuant to
the terms of irrevocable instructions issued by the optionee prior to the
issuance of shares of the Company's common stock.
(d) An option shall not be transferable except by will or by the
laws of descent and distribution, or pursuant to a qualified domestic relations
order satisfying the requirements of Rule 16b-3 under the Securities Exchange
Act of 1934 ("Rule 16b-3") and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person (or by his guardian or
legal representative) or transferee pursuant to such an order. Notwithstanding
the foregoing, the optionee may, by delivering written notice to the Company in
a form satisfactory to the Company, designate a third party who, in the event
of the death of the optionee, shall thereafter be entitled to exercise the
option.
(e) The option shall become exercisable over a period of two (2)
years from the date of grant in equal annual installments, commencing on the
date one (1) year after the date of grant of the option, provided that the
optionee has, during the entire period prior to such vesting installment date,
continuously served as a Non-Employee Director or employee of or consultant to
the Company or any Affiliate of the Company, whereupon such option shall become
fully exercisable in accordance with its terms with respect to that portion of
the shares represented by that installment.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any
such option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience
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in financial and business matters; and (ii) to give written assurances
satisfactory to the Company stating that such person is acquiring the stock
subject to the option for such person's own account and not with any present
intention of selling or otherwise distributing the stock. These requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
(i) the issuance of the shares upon the exercise of the option has been
registered under a then currently-effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may require any optionee to provide such other
representations, written assurances or information which the Company shall
determine is necessary, desirable or appropriate to comply with applicable
securities laws as a condition of granting an option to the optionee or
permitting the optionee to exercise the option. The Company may, upon advice
of counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the stock.
(g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.
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7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options granted
under the Plan; provided however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option
granted under the Plan, or any stock issued or issuable pursuant to any such
option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(b) Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any Non-Employee Director any right to continue in
the service of the Company or any Affiliate in any capacity or shall affect any
right of the Company, its Board or stockholders or
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any Affiliate, to remove any Non-Employee Director pursuant to the Company's
Bylaws and the provisions of the Delaware General Corporation Law.
(c) No Non-Employee Director, individually or as a member of a
group, and no beneficiary or other person claiming under or through him, shall
have any right, title or interest in or to any option reserved for the purposes
of the Plan except as to such shares of common stock, if any, as shall have
been reserved for him pursuant to an option granted to him.
(d) In connection with each option made pursuant to the Plan, it
shall be a condition precedent to the Company's obligation to issue or transfer
shares to a Non-Employee Director, or to evidence the removal of any
restrictions on transfer, that such Non-Employee Director make arrangements
satisfactory to the Company to insure that the amount of any federal, state or
local withholding tax required to be withheld with respect to such sale or
transfer, or such removal or lapse, is made available to the Company for timely
payment of such tax.
(e) As used in this Plan, "Fair Market Value" means, as of any
date, the value of the common stock of the Company determined as follows:
(i) If the common stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market of the Nasdaq Stock Market, the Fair Market
Value of a share of common stock shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such system
or exchange (or the exchange with the greatest volume of trading in common
stock) on the last market trading day prior to the day of determination, as
reported in the Wall Street Journal or such other source as the Board deems
reliable;
(ii) If the common stock is quoted on Nasdaq Stock
Market (but not on the National Market thereof) or is regularly quoted by a
recognized securities dealer but
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selling prices are not reported, the Fair Market Value of a share of common
stock shall be the mean between the bid and asked prices for the common stock
on the last market trading day prior to the day of determination, as reported
in the Wall Street Journal or such other source as the Board deems reliable;
(iii) In the absence of an established market for
the common stock, the Fair Market Value shall be determined in good faith by
the Board.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan and outstanding options will
be appropriately adjusted in the class(es) and maximum number of shares subject
to the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding options. Such adjustments shall be made by the Board,
the determination of which shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be treated as
a "transaction not involving the receipt of consideration by the Company.")
(b) In the event of: (1) a dissolution, liquidation, or sale of
all or substantially all of the assets of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the shares
of the Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise; or (4) the acquisition by any person, entity or
group within the meaning of Section
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13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or any
Affiliate of the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of directors, then to
the extent not prohibited by applicable law, the time during which options
outstanding under the Plan may be exercised shall be accelerated prior to such
event and the options terminated if not exercised after such acceleration and
at or prior to such event.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan and/or some or all outstanding options granted under the Plan, provided,
however, that the Board shall not amend the Plan more than once every six (6)
months, with respect to the provisions of the Plan which relate to the amount,
price and timing of grants, other than to comport with changes in the Code or
the regulations thereunder. Except as provided in paragraph 10 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company within twelve (12) months before or
after the adoption of the amendment, where the amendment will:
(i) Increase the number of shares which may be
issued under the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to comply with the requirements of Rule 16b-3);
or
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(iii) Modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to comply with
the requirements of Rule 16b-3.
(b) Rights and obligations under any option granted before any
amendment of the Plan shall not be impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on March 18, 2006. No
options may be granted under the Plan while the Plan is suspended or after it
is terminated.
(b) Rights and obligations under any option granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the
events described in Section 10(b) above.
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Board of
Directors of the Company.
(b) No option granted under the Plan shall be exercised or become
exercisable unless and until the Plan is approved by the stockholders of the
Company.
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JT STORAGE, INC.
1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION
___________________________________________, Optionee:
On __________________, 19___, an option was automatically granted to
you (the "optionee") pursuant to the JT Storage, Inc. (the "Company") 1996
Non-Employee Directors' Stock Option Plan (the "Plan") to purchase shares of
the Company's common stock ("Common Stock"). This option is not intended to
qualify and will not be treated as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for Non-Employee Directors (as defined in
the Plan).
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this
option is fifty thousand (50,000).
2. The exercise price of this option is
______________________________ ($________) per share, such amount being equal
to the Fair Market Value (as defined in the Plan) of the Common Stock on the
date of grant of this option.
3. Subject to the limitations contained herein, this option shall
become exercisable (i.e., vest) in two (2) equal annual installments with the
first installment becoming exercisable one (1) year after the grant date;
provided however, that you have, during the period from the grant date to such
vesting date, continuously served as a Non-Employee Director or employee of or
consultant to the Company or any Affiliate (as defined in the Plan), whereupon
this option shall become fully exercisable with respect to that portion of the
shares represented by that installment. Notwithstanding the foregoing, this
option shall not be exercisable in whole or in part unless and until the Plan
has been approved by the Company's stockholders.
4. (a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require
pursuant to Section 6 of the Plan. This option may not be exercised for any
number of shares which would require the issuance of anything other than whole
shares.
(b) You may elect to pay the exercise price under one of
the following alternatives:
(i) Payment of the exercise price per share in
cash at the time of exercise;
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(ii) Provided that at the time of the exercise the
Common Stock is publicly traded and quoted regularly in the Wall Street
Journal, payment by delivery of shares of Common Stock already owned by you,
held for the period required to avoid a charge to the Company's reported
earnings, and owned free and clear of any liens, claims, encumbrances or
security interest, which Common Stock shall be valued at its Fair Market Value
on the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of
payment specified in subparagraphs (i) and (ii) above.
Notwithstanding the foregoing, this option may be exercised
pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board which results in the receipt of cash (or check) by the
Company either prior to the issuance of shares of the Common Stock or pursuant
to the terms of irrevocable instructions issued by you prior to the issuance of
shares of the Common Stock.
(c) By exercising this option you agree that the Company
may require you to enter an arrangement providing for the cash payment by you
to the Company of any tax withholding obligation of the Company arising by
reason of the exercise of this option.
5. The term of this option is ten (10) years measured from the
grant date, subject, however, to earlier termination upon your termination of
service, as set forth in Section 6 of the Plan.
6. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
7. This option is subject to all the provisions of the Plan, a
copy of which is attached hereto and its provisions are hereby made a part of
this option, including without limitation the provisions of Section 6 of the
Plan relating to option provisions, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of this option and those of the Plan, the provisions of
the Plan shall control.
Dated the _______ day of __________________________________, 19__.
Very truly yours,
JT Storage, Inc.
By:____________________________________
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
1996 Non-Employee Directors' Stock Option Plan
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The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and liabilities
with respect to this option are set forth in the option and the Plan;
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of Common Stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options and any other stock awards previously
granted and delivered to the undersigned under stock award plans of the
Company, and (ii) the following agreements only:
NONE: ____________________________________________
(Initial)
OTHER: ____________________________________________
____________________________________________
____________________________________________
______________________________________________
Optionee
______________________________________________
Address
______________________________________________
______________________________________________
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