Exhibit 10(g)
INTERoACT SYSTEMS, INCORPORATED
1996 NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The 1996 Nonqualified Stock Option Plan (the "Plan")
of InteroAct Systems, Incorporated, a North Carolina corporation (the
"Company"), is intended to allow certain key employees, officers and
directors, and certain consultants and advisers and independent
contractors who have rendered or will render bona fide services to or on
behalf of the Company and its subsidiaries to have an opportunity to
acquire an ownership interest in the Company as an additional incentive
to attract and retain such persons and to encourage them to promote the
Company's business.
2. Administration. The Plan shall be administered by the Board
of Directors of the Company or, upon determination by the Board of
Directors, a committee (the "Committee"), which shall consist of not
less than three nonemployee directors of the Company. No member of the
Board of Directors of the Company or of the Committee shall be liable
for any action or determination made in good faith with respect to the
Plan or to any option granted thereunder. In addition, directors,
including Committee members, shall be eligible for indemnification from
the Company, pursuant to the Company's bylaws, for any expenses,
judgments or other costs incurred as a result of a lawsuit filed against
them or any of them claiming any rights or remedies due to their
participation in the administration of the Plan.
3. Authority of Board of Directors and Committee.
(a) Subject to the other provisions of this Plan, the Board
of Directors of the Company or the Committee shall have sole
authority in its absolute discretion: to grant options under the
Plan; to determine the number of shares subject to any option under
the Plan; to fix the option price and the duration of each option;
to establish any other terms and conditions of options; to
accelerate the time at which any outstanding option may be
exercised; and to terminate the Plan.
(b) Subject to the other provisions of this Plan, and with a
view to effecting its purpose, the Board of Directors or the
Committee shall have sole authority in its absolute discretion: to
construe and interpret the Plan; to define the terms used herein;
to prescribe, amend, and rescind rules and regulations relating to
the Plan; to make any other determinations; and to do everything
necessary or advisable to administer the Plan.
(c) All decisions, determinations, and interpretations made
by the Board of Directors or the Committee shall be binding and
conclusive on all participants in the Plan and on their legal
representatives, heirs and beneficiaries.
4. Shares Subject to the Plan. The maximum aggregate number of
shares of Common Stock available pursuant to the Plan, subject to
adjustment as provided in Section 8 of this Plan, shall be 500,000
shares of the Company's common stock, no par value (the "Common Stock").
If any option granted pursuant to the Plan expires or terminates for any
reason before it has been exercised in full, the unpurchased shares
subject to that option shall again be available
for the purposes of the Plan. The Company, during the term of this
Plan, will at all times reserve and keep available such number of shares
of its Common Stock as shall be sufficient to satisfy the requirements
of the Plan. Authorized but unissued shares of the Company shall also
be subject to issuance under the Plan.
5. Terms and Conditions of Options. Stock options granted under
the Plan shall be evidenced by agreements in such form as the Board of
Directors or the Committee may from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:
(a) Number of Shares. Each option shall state the number of
shares to which it pertains.
(b) Option Price. Each option shall state the option price,
which may be less than the fair market value (as hereinafter
defined) per share of the Common Stock at the time the option is
granted, provided, however, that no option may be granted at an
exercise price of less than $5.50 per share (as the same may be
adjusted from time to time pursuant to Section 8 of this Plan).
(c) Exercise of Options. Except as otherwise provided in
this Plan or in the applicable option agreement, each option shall
be exercisable in installments as follows:
(i) up to 20% of the total shares subject to the option
at any time after one year from the date of grant and prior to
termination of the option;
(ii) up to 40% of the total shares subject to the option
(less any shares previously purchased pursuant to the option)
at any time after two years from the date of grant and prior
to termination of the option;
(iii) up to 60% of the total shares subject to the
option (less any shares previously purchased pursuant to the
option) at any time after three years from the date of grant
and prior to termination of the option; and
(iv) up to 80% of the total shares subject to the option
(less any shares previously purchased pursuant to the option)
at any time after four years from the date of grant and prior
to termination of the option; and
(v) in full at any time after five years from the date
of grant and prior to termination of the option.
Not less than 100 shares may be purchased at any one time unless
the number purchased is the total number that may be purchased under the
option at that time. No option may be exercised for any fraction of a
share of Common Stock.
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(d) Written Notice and Payment Required. An option granted
pursuant to the terms of this Plan shall be exercised when written
notice of that exercise has been received by the Company at its
principal office from 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. The purchase price of
any shares purchased shall be paid in full in cash or by certified
or cashier's check payable to the order of the Company or, unless
prohibited by the applicable option agreement, by shares of Common
Stock or by a combination of cash, check, and (unless prohibited by
the applicable option agreement) shares of Common Stock. If any
portion of the purchase price is paid in shares of Common Stock,
those shares shall be tendered at their then fair market value as
determined by the Board of Directors on the basis of such factors
as it deems appropriate; provided, however, that fair market value
shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse, and further
provided that if at the time the determination of fair market value
is made, the Common Stock is admitted to trading on a national
securities exchange for which sales prices are regularly reported,
fair market value shall not be less than the mean of the high and
low asked or closing sales prices reported for the Common Stock on
that exchange on the day (or most recent trading day preceding the
day on which the option is exercised). For purposes of this Plan,
the term "national securities exchange" shall include the National
Association of Securities Dealers Automated Quotation System and
the over-the-counter market.
(e) Compliance With Securities Laws. The options granted
under the Plan and the shares issuable pursuant to the Plan may, at
the option of the Company, be registered under applicable federal
and state securities laws, but the Company shall have no obligation
to undertake any such registrations. Shares of Common Stock shall
not be issued with respect to any option granted under the Plan
unless the exercise of that option and the issuance and delivery of
those shares pursuant to that exercise shall comply with all
relevant provisions of state and federal law including, without
limitation, the Securities Act of 1933, as amended, 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. The Board of Directors may also
require an optionee to furnish evidence satisfactory to the
Company, including a written and signed representation letter and
consent to be bound by any transfer restriction imposed by law,
legend, condition, or otherwise, that the shares are being
purchased only for investment and without any present intention to
sell or distribute the shares in violation of any state or federal
law, rule, or regulation. Further, each optionee shall consent to
the imposition of a legend on the shares of Common Stock subject to
his or her option restricting their transferability as required by
law or by this Plan.
(f) Transferability of Options. Options granted pursuant to
this Plan may not be
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sold, assigned, or transferred in any manner otherwise than by will
or the laws of descent or distribution except for immediate family
transfers. For purposes of this paragraph (f), "immediate family
transfers" shall mean transfers, without consideration, to (i) a
member of the Optionee's immediate family, (ii) a trust the
beneficiaries of which consist solely of the Optionee and/or
members of his immediate family, or (iii) a partnership, limited
liability company or similar entity all of the members, partners
and beneficiaries of which consist solely of the Optionee and/or
members of his immediate family. For purposes of this paragraph
(f), members of the Optionee's immediate family include his or her
spouse, children, parents and siblings, and the spouses and lineal
descendants of such persons. Immediate family transfers may be
limited by the provisions of the applicable option agreement.
(g) Duration of Options. Each option and all rights
thereunder granted pursuant to the terms of this Plan shall expire
on the date specified in the applicable option agreement, but in no
event shall any option expire later than 10 years from the date on
which the option is granted.
(h) Termination of Employment, Disability or Death.
(i) Unless otherwise provided in the applicable option
agreement, if an optionee ceases to be employed by the
Company, its parent, or any of its subsidiaries (or a
corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which
Section 424(a) of the Code applies), for any reason other than
disability or death, his or her option may be exercised at any
time up to three months after the date of termination of
employment.
(ii) Unless otherwise provided in the applicable option
agreement, if an optionee becomes disabled within the meaning
of Section 22(e)(3) of the Code while employed by the Company,
or any parent or subsidiary corporation (or a corporation or a
parent or subsidiary of such corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the
Code applies), the option may be exercised at any time within
three months after the date of termination of employment due
to disability.
(iii) Unless otherwise provided in the applicable option
agreement, if an optionee dies while employed by the Company,
its parent or any of its subsidiaries, (or a corporation or a
parent or subsidiary of such corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the
Code applies), his or her option shall expire one year after
the date of death. During this period, the option may be
exercised, except as otherwise provided in the applicable
option agreement, by the person or persons to whom the
optionee's rights under the option shall pass by will or by
the laws of descent and
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distribution.
(iv) Any option that may be exercised for a period
following termination of the optionee's employment may be
exercised only to the extent it was exercisable immediately
before such termination and in no event after the option would
expire by its terms without regard to such termination.
(i) Option Agreements. The option agreements authorized
under the Plan may differ from one another and shall contain such
other provisions not inconsistent with the Plan as the Board of
Directors or the Committee may in its discretion deem advisable
from time to time, including, without limitation, conditions
precedent to the exercise of the option covered by any agreement,
which conditions may include the satisfaction of specified
performance criteria by the Company or the optionee.
6. Tax Withholding. The exercise of any option granted under the
Plan is subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax
or other withholding liabilities under any state or federal law is
necessary or desirable as a condition of, or in any connection with,
such exercise or the delivery or purchase of shares pursuant thereto,
then in such event, the exercise of the option shall not be effective
unless such withholding tax or other withholding liabilities shall have
been satisfied in a manner acceptable to the Company.
7. Employment. Nothing in the Plan or in any option shall confer
upon any eligible employee, director, advisor or consultant any right to
continued employment by, or relationship with the Company, as the case
may be, or by its parent or subsidiary corporations, or limit in any way
the right of the Company or its parent or subsidiary corporation at any
time to terminate or alter the terms of that employment or relationship.
8. Adjustments.
(a) If the shares of Common Stock of the Company are
increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities through merger,
consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend,
stock split or reverse stock split in which the Company is the
surviving entity, the Board of Directors shall make an appropriate
and proportionate adjustment in the maximum number and kind of
shares as to which options and stock bonuses may be granted under
this Plan. A corresponding adjustment changing the number or kind
of shares allocated to unexercised options that shall have been
granted prior to any such change, shall likewise be made. Any such
adjustment in outstanding options shall be made without change in
the aggregate purchase price applicable to the unexercised portion
of the option, but with a corresponding adjustment in the price for
each share or other unit of any security covered by the option. In
making any adjustment pursuant to this Section 8(a), any fractional
shares shall be disregarded.
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(b) In the event of a consolidation or a merger in which the
Company is not the surviving corporation, or any other merger in
which the shareholders of the Company exchange their shares of
stock in the Company for stock of another corporation, or in the
event of complete liquidation of the Company, or in the case of a
tender offer approved by the Board of Directors, all outstanding
options, unless the applicable option agreement provides otherwise,
shall become exercisable in full immediately prior to the effective
date of any such transaction, regardless of the exercise schedule.
9. Effective Date of Plan. The Plan shall be effective June 14,
1996, the date of adoption of the Plan by the Board of Directors of the
Company, subject to approval of the Plan by the shareholders of the
Company by either (a) the vote of the holders of no less than the
majority of the Company's Common Stock present or represented at a
meeting of shareholders duly called and held, or (b) unanimous written
consent, in either case prior to June 14, 1997.
10. Termination and Amendment of Plan. The Plan may be terminated
at any time by the Board of Directors. Unless sooner terminated, the
Plan shall terminate June 13, 2006. No options shall be granted under
the Plan after the Plan is terminated. Subject to the limitation
contained in Section 11, the Board of Directors may at any time amend or
revise the terms of the Plan, including the form and substance of the
option agreements to be used hereunder; provided that no amendment or
revision shall (a) increase the maximum aggregate number of shares
subject to this Plan, except as permitted under Section 8; (b) change
the minimum purchase price for shares subject to options granted under
the Plan; (c) extend the maximum term established under the Plan for any
option; or (d) permit the granting of an option to anyone other than as
provided in the Plan.
11. Prior Rights and Obligations. No amendment, suspension, or
termination of the Plan shall, without the consent of the person who has
received an option, alter or impair any of that person's rights or
obligations under any option granted under the Plan prior to such
amendment, suspension, or termination.
12. Tax Reimbursement. In view of the federal and state income
savings expected to be realized by the Company by reason of exercise of
a nonqualified option granted pursuant to this Plan, the Board of
Directors or the Committee may, in its discretion, grant nonqualified
options the terms of which provide that, upon exercise, the Company will
make a cash compensation payment to the optionee (or his personal
representatives or heirs). The basis for determining the amount of such
cash payment shall be specified in the applicable option agreement. No
person subject to the operation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, shall be entitled to the payment
authorized by this Section 12, except with respect to options that are
exercised during the period beginning on the third business day and
ending on the twelfth business day following release of quarterly or
annual summary statements of sales and earnings of the Company or any
successor of the Company which assumes the obligations of the Company
hereunder.
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13. Termination of Nonemployee Relationships with the Company. If
a nonemployee optionee ceases to serve the Company in the capacity which
made the optionee eligible to receive options pursuant to this Plan,
then the optionee's rights upon such termination shall be governed in
the manner of an optionee's rights upon termination of employment as set
forth in this Plan.
IN WITNESS WHEREOF, this InteroAct Systems, Incorporated 1996
Nonqualified Stock Option Plan is executed on behalf of the Company as
of August 26, 1996 and reflects all amendments effective through such
date.
INTERoACT SYSTEMS, INCORPORATED
By:______________________________________
President
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