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EXHIBIT 4.1
FORTE COMPUTER EASY, INC.
1996 STOCK OPTION PLAN
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1. Purposes of the Plan. The purposes of this Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility to provide successful management of the Company's business, to
provide additional incentive to the Employees of the Company, and to promote the
success of the Company's business through the grant of options to purchase
shares of the Company's Common Stock.
Options granted hereunder may be either "Incentive Stock
Options," as defined in Section 422 of the Code, or "Non-Statutory Stock
Options," at the discretion of the Board and as reflected in the terms of the
written option agreement.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Board" shall mean the Board of Directors of the Company or
the Committee, if one has been appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
(c) "Common Stock" shall mean the $0.01 par value common stock
of the Company described in the Company's Articles of Incorporation,
as amended.
(d) "Company" shall mean Forte Computer Easy, Inc., a Utah
corporation, and shall include any parent or subsidiary corporation
of the Company as defined in Sections 424(e) and (f), respectively,
of the Code.
(e) "Committee" shall mean the Committee appointed by the Board
in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean any person, including officers and
directors, employed by the Company. The payment of a director's fee
by the Company shall not be sufficient to constitute "employment" by
the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(i) "Fair Market Value" shall mean, with respect to the date a
given Option is granted or exercised, the value of the Common Stock
determined by the Board in such manner as it may deem equitable for
Plan purposes but, in the case of an Incentive Stock Option, no less
than is required by applicable laws or regulations; provided,
however, that where there is a public market for the Common Stock,
the Fair Market Value per Share shall be the mean of the bid and
asked prices of the Common Stock on the date of grant, as reported
in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated
Quotation System) or, in the event the Common Stock is listed on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq
National Market, the Fair Market Value per Share shall be the
closing price on such exchange on the date of grant of the Option,
as reported in The Wall Street Journal.
(j) "Incentive Stock Option" shall mean an Option which is
intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code.
(k) "Non-Statutory Option" shall mean all Options which are not
Incentive Stock Options.
(l) "Option" shall mean a stock option granted under the Plan.
(m) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(n) "Optionee" shall mean an Employee or Director of the Company
who has been granted one or more Options.
(o) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(p) "Plan" shall mean this Stock Option Plan.
(q) "Share" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
(r) "Subsidiary" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
(s) "Tax Date" shall mean the date an Optionee is required to
pay the Company an amount with respect to tax withholding
obligations in connection with the exercise of an Option.
3. Common Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan shall be equal to 15% of the Shares of Common
Stock issued and outstanding from time
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to time, but which maximum aggregate number of Shares which may be optioned and
sold under the Plan shall in no event exceed 10,000,000 shares of Common Stock.
The Shares which may be optioned and sold under the Plan may be authorized, but
unissued, or previously issued Shares acquired or to be acquired by the Company
and held in treasury.
If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares covered by
such Option shall, unless the Plan shall have been terminated, be available for
future grants of Options.
4. Administration of the Plan.
(a) Procedure.
(i) The Board shall administer the Plan; provided,
however, that the Board may appoint a Committee consisting solely of two (2) or
more "Non-Employee Directors" to administer the Plan on behalf of the Board, in
accordance with Rule 16b-3 under the Exchange Act.
(ii) Once appointed, the Committee shall continue to
serve until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefor or fill vacancies however caused; provided, however, that at no time
may any person serve on the Committee if that person's membership would cause
the Committee not to satisfy the requirements of Rule 16b-3 under the Exchange
Act.
Any reference herein to the Board shall, where
appropriate, encompass a Committee appointed to administer the Plan in
accordance with this Section 4.
(b) Powers of the Board. Subject to the provisions of the
Plan, the Board shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, in accordance with Section 422 of the Code, and to
grant Non-Statutory Stock Options; (ii) to determine, upon review of relevant
information and in accordance with Section 2(i) of the Plan, the Fair Market
Value of the Common Stock; (iii) to determine the exercise price per Share of
Options to be granted, which exercise price shall be determined in accordance
with Section 8(a) of the Plan; (iv) to determine the Directors and Employees to
whom, and the time or times at which, Options shall be granted and the number of
Shares to be represented by each Option; (v) to interpret the Plan; (vi) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vii)
to determine the terms and provisions of each Option granted (which need not be
identical) and, with the consent of the Optionee thereof, modify or amend each
Option; (viii) to accelerate or defer (with the consent of the Optionee) the
exercise date of any Option; (ix) to authorize any person to execute on behalf
of the Company any instrument required to effectuate the grant of an Option
previously granted by the Board; (x) to accept or reject the election made by an
Optionee pursuant to Section 17 of the Plan; and (xi) to make all other
determinations deemed necessary or advisable for the administration of the Plan.
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(c) Effect of Board's Decision. All decisions, determinations
and interpretations of the Board shall be final and binding on all
Optionees and any other holders of any Options granted under the
Plan.
5. Eligibility.
(a) Consistent with the Plan's purposes, Options may be granted
only to Directors and key Employees of the Company as determined by the Board.
An Optionee who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options. Incentive Stock Options may be granted
only to those Employees who meet the requirements applicable under Section 422
of the Code.
(b) With respect to Incentive Stock Options granted under the
Plan, the aggregate fair market value (determined at the time the Incentive
Stock Option is granted) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Employee during any
calendar year (under all plans of the Company and its parent and subsidiary
corporations) shall not exceed One Hundred Thousand Dollars ($100,000).
The Plan shall not confer upon any Optionee any right with
respect to continuation of employment with the Company, nor shall it interfere
in any way with his right or the Company's right to terminate his employment at
any time.
6. Board Approval and Effective Date. The Plan shall take effect on
December 19, 1996, the date on which the Board approved the Plan. No Option may
be granted after December 19, 2006 (ten (10) years from the effective date of
the Plan); provided, however, that the Plan and all outstanding Options shall
remain in effect until such Options have expired or until such Options are
canceled.
7. Term of Option. Unless otherwise provided in the Stock Option
Agreement, the term of each Option shall be ten (10) years from the date of
grant thereof. In no case shall the term of any Incentive Stock Option exceed
ten (10) years from the date of grant thereof. Notwithstanding the above, in the
case of an Incentive Stock Option granted to an Employee who, at the time the
Incentive Stock Option is granted, owns ten percent (10%) or more of the Common
Stock as such amount is calculated under Section 422(b)(6) of the Code ("Ten
Percent Shareholder"), the term of the Incentive Stock Option shall be five (5)
years from the date of grant thereof or such shorter time as may be provided in
the Stock Option Agreement.
8. Exercise Price and Payment.
(a) Exercise Price. The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the Board,
but in the case of an Incentive Stock Option shall be no less than one hundred
percent (100%) of the Fair Market Value per share on the date of grant;
provided, further, that in the case of an Incentive Stock Option granted to an
Employee who, at the time of the grant of such Incentive Stock Option, is a Ten
Percent Shareholder, the per Share exercise price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant.
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(b) Payment. The price of an exercised Option and any taxes
attributable to the delivery of Common Stock under the Plan, or portion thereof,
shall be paid:
(i) In United States dollars in cash or by check, bank draft
or money order payable to the order of the Company; or
(ii) At the discretion of the Board, through the delivery of
shares of Common Stock, with an aggregate Fair Market Value, equal
to the option price; or
(iii) By a combination of (i) and (ii) above; or
(iv) In the manner provided in subsection (c) below.
The Board shall determine acceptable methods for tendering
Common Stock as payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Common Stock to exercise an Option as
it deems appropriate. With respect to Non-Statutory Options, at the election of
the Optionee pursuant to Section 16, the Company may satisfy its withholding
obligations by retaining such number of shares of Common Stock subject to the
exercised Option which have an aggregate Fair Market Value on the exercise date
equal to the Company's aggregate federal, state, local and foreign tax
withholding and FICA and FUTA obligations with respect to income generated by
the exercise of the Option by Optionee.
(c) Financial Assistance to Optionees. The Board may assist
Optionees in paying the exercise price of Options granted under this
Plan in the following manner:
(i) The extension of a loan to the Optionee by the
Company; or
(ii) A guaranty by the Company of a loan obtained by the
Optionee from a third party.
The terms of any loans, installment payments or guarantees,
including the interest rate and terms of repayment, and collateral requirements,
if any, shall be determined by the Board, in its sole discretion. Subject to
applicable margin requirements, any loans, installment payments or guarantees
authorized by the Board pursuant to the Plan may be granted without security,
but the maximum credit available shall not exceed the exercise price for the
Shares for which the Option is to be exercised, plus any federal and state
income tax liability incurred in connection with the exercise of the Option.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan. Unless otherwise determined by the
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Board at the time of grant, an Option may be exercised in whole or in part. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 10 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee. Unless otherwise
provided in a Stock Option Agreement relating to an Option that is not an
Incentive Stock Option, if an Employee's employment by the Company is
terminated, except if such termination is voluntary or occurs due to retirement
with the consent of the Board, death or disability, then the Option, to the
extent not exercised, shall cease on the date on which Employee's employment by
the Company is terminated. If an Employee's termination is voluntary or occurs
due to retirement with the consent of the Board, then the Employee may, but only
within thirty (30) days (or such other period of time not exceeding three (3)
months as is determined by the Board) after the date he ceases to be an Employee
of the Company, exercise his Option to the extent that he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of such termination, or if he does
not exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(c) Disability. Unless otherwise provided in an Option Agreement
relating to an Option that is not an Incentive Stock Option, notwithstanding the
provisions of Section 8(b) above, in the event an Employee is unable to continue
his employment with the Company as a result of his permanent and total
disability (as defined in Section 22(e)(3) of the Code), he may, but only within
three (3) months (or such other period of time not exceeding twelve (12) months
as it is determined by the Board) from the date of termination, exercise his
Option to the extent he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of termination, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. Unless otherwise provided in an Option
Agreement relating to an Option, if Optionee dies during the term of the Option
and is at the time of his death an Employee of the Company who shall have been
in continuous status as an Employee since the date of grant of the Option, the
Option may be exercised, at any time within
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one (1) year following the date of death (or such other period of time as is
determined by the Board), by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent that Optionee was entitled to exercise the Option on the date of death.
To the extent that Optionee was not entitled to exercise the Option on the date
of death, or if the Optionee's estate, or person who acquired the right to
exercise the Option by bequest or inheritance, does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
10. Non-transferability of Options. An Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution, or pursuant to a
"qualified domestic relations order" under the Code and the Employee Retirement
Income Security Act of 1974, as amended, and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Adjustments upon Changes in Capitalization or Merger. Subject to
any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Option and the price per Share covered by each such
outstanding Option shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. However, the number of Shares which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option shall not be adjusted for any increase or decrease in the number of
issued shares resulting from any of the foregoing actions. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof, shall be made with respect to the number or price
of Shares subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Board makes an Option fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of thirty (30) days from the date of such notice
(but not
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later than the expiration of the term of the Option under the Option Agreement),
and the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date on which the Board makes the determination
granting such Option. Notice of the determination shall be given to each
Employee to whom an Option is so granted within a reasonable time after the date
of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate
the Plan from time to time in such respects as the Board may deem advisable;
provided, however, that the following revisions or amendments shall require
approval of the holders of a majority of the outstanding Shares of the Company
entitled to vote:
(i) Any increase in the number of Shares subject to the
Plan, other than in connection with an adjustment under Section 11 of the Plan;
(ii) Any change in the designation of the class of
employees eligible to be granted Options; or
(iii) If the Company has a class of equity security
registered under Section 12 of the Exchange Act at the time of such revision or
amendment, any material increase in the benefits accruing to participants under
the Plan.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
In the case of an Incentive Stock Option, any Optionee who
disposes of Shares of Common Stock acquired on the exercise of an Option by sale
or exchange (a) either
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within two (2) years after the date of the grant of the Option under which the
Common Stock was acquired or (b) within one (1) year after the acquisition of
such Shares of Common Stock shall notify the Company of such disposition and of
the amount realized upon such disposition.
15. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written Stock
Option Agreements in such form as the Board shall approve.
17. Withholding Taxes. Subject to Section 4(b)(x) of the Plan and
prior to the Tax Date, the Optionee may make an irrevocable election to have the
Company withhold from those Shares that would otherwise be received upon the
exercise of any Non-Statutory Stock Option, a number of Shares having a Fair
Market Value equal to the minimum amount necessary to satisfy the Company's
federal, state, local and foreign tax withholding obligations and FICA and FUTA
obligations with respect to the exercise of such Option by the Optionee.
18. Miscellaneous Provisions.
(a) Plan Expense. Any expenses of administering this Plan shall
be borne by the Company.
(b) Use of Exercise Proceeds. The payment received from
Optionees from the exercise of Options shall be used for the general corporate
purposes of the Company.
(c) Construction of Plan. The validity, construction,
interpretation, administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined in accordance
with the laws of the State of Nevada and where applicable, in accordance with
the Code.
(d) Taxes. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the delivery
of Common Stock under the Plan from other amounts payable to the Employee after
giving the person entitled to receive such Common Stock notice as far in advance
as practical, and the Company may defer making delivery of such Common Stock if
any such tax may be pending unless and until indemnified to its satisfaction.
(e) Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board, the members of the
Board shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any
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action, suit or proceeding to which they or any of them may be party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except a judgment based upon a finding of bad faith; provided
that upon the institution of any such action, suit or proceeding a Board member
shall, in writing, give the Company notice thereof and an opportunity, at its
own expense, to handle and defend the same before such Board member undertakes
to handle and defend it on her or his own behalf.
(f) Gender. For purposes of this Plan, words used in the
masculine gender shall include the feminine and neuter, and the singular shall
include the plural and vice versa, as appropriate.
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