Exhibit 10.2
Exhibit A
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1998 LONG-TERM INCENTIVE
AND
STOCK OPTION PLAN
1. Purpose of the Plan. This Plan shall be known as the "1998 Long-Term
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Incentive and Stock Option Plan" and is hereinafter referred to as the "Plan."
The purpose of the Plan is to aid in maintaining and developing personnel
capable of assuring the future success of Net Profit, Inc., a Montana
corporation, doing business as Right Now Technologies (the "Company"), to offer
such personnel additional incentives to put forth maximum efforts for the
success of the business, and to afford them an opportunity to acquire a
proprietary interest in the Company through stock options and other long-term
incentive awards as provided herein. Options granted under this Plan may be
either incentive stock options ("Incentive Stock Options") or options which do
not qualify as Incentive Stock Options. Awards under this Plan shall be
performance awards as hereinafter described.
2. Stock Subject to Plan. Subject to the provisions of Section 13 hereof,
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the stock to be subject to options or other awards under the Plan shall be the
Company's authorized Common Shares, no par value per share. Such shares may be
either authorized but unissued shares, or issued shares which have been
reacquired by the Company. Subject to adjustment as provided in Section 13
hereof, the maximum number of shares on which options may be exercised or other
awards issued under this Plan shall be 250,000 shares. If an option or award
under the Plan expires, or for any reason is terminated or unexercised with
respect to any shares, such shares shall again be available for options or
awards thereafter granted during the term of the Plan.
3. Administration of Plan. (a) The Plan shall be administered by the
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Board of Directors of the Company or a committee thereof. The members of any
such committee shall be appointed by and serve at the pleasure of the Board of
Directors and shall include only "non-employee directors" within the meaning of
Rule 16b-3 promulgated under the Securities and Exchange Act of 1934. (The group
administering the Plan shall hereinafter be referred to as the "Committee.") In
addition, to the extent required by Section 162(m) of the Internal Revenue Code
of 1986, as amended (such statute, as it may be amended from time to time and
all proposed temporary or final Treasury Regulations promulgated thereunder
shall be referred to as the "Code"), at all times following the 1998 Annual
Meeting of Shareholders of the Company, all members of the Committee shall be
"outside directors" within the meaning of Section 162(m) of the Code.
(b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: (i) to determine the purchase
price of the Common Stock covered by each option or award, (ii) to determine the
employees to whom and the time or times at which such options and awards shall
be granted and the number of shares to be subject to each, (iii) to determine
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form of payment to be made in connection with performance awards, either cash,
Common Shares of the Company, or a combination thereof, (iv) to determine the
terms of exercise of each option and award, (v) to accelerate the time at which
all or any part of an option or award may be exercised, (vi) to amend or modify
the terms of any option or award with the consent of the optionee, (vii) to
interpret the Plan, (viii) to prescribe, amend, and rescind rules and
regulations relating to the Plan, (ix) to determine the terms and provisions of
each option and award agreement under the Plan (which agreements need not be
identical, including the designation of those options intended to be Incentive
Stock Options, and (x) to make all other determinations necessary or advisable
for the administration of the Plan, subject to the exclusive authority of the
Board of Directors under Section 14 herein to amend or terminate the Plan. The
Committee's determinations on the foregoing matters, unless otherwise
disapproved by the Board of Directors of the Company, shall be final and
conclusive.
(c) The Committee shall select one of its members as its Chair and shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum. All determinations of the Committee shall
be made by not less than a majority of its members. Any decision or
determination reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority vote at
a meeting duly called and held. The grant of an option or award shall be
effective only if a written agreement shall have been duly executed and
delivered by and on behalf of the Company following such grant. The Committee
may appoint a Secretary and may make such rules and regulations for the conduct
of its business as it shall deem advisable.
4. Eligibility. Incentive Stock Options may only be granted under this
Plan to any full or part-time employee (which term as used herein includes, but
is not limited to, officers and directors who are also employees) of the Company
and of its present and future subsidiary corporations within the meaning of
Section 424(f) of the Code (hereinafter called "subsidiaries"). Full or part-
time employees, consultants, or independent contractors to the Company or one of
its subsidiaries shall be eligible to receive options which do not qualify as
Incentive Stock Options and awards. In determining the persons to whom options
and awards shall be granted and the number of shares subject to each, the
Committee may take into account the nature of services rendered by the
respective employees or consultants, their present and potential contributions
to the success of the Company and such other factors as the Committee in its
discretion shall deem relevant. A person who has been granted an option or award
under this Plan may be granted additional options or awards under the Plan if
the Committee shall so determine; provided, however, that for Incentive Stock
Options granted after December 31, 1986, to the extent the aggregate fair market
value (determined at the time the Incentive Stock Option is granted) of the
Common Shares with respect to which all Incentive Stock Options are exercisable
for the first time by an employee during any calendar year (under all
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plans described in subsection (d) of Section 422 of the Code of his employer
corporation and its parent and subsidiary corporations) exceeds $100,000, such
options shall be treated as options which do not qualify as Incentive Stock
Options. Nothing in the Plan or in any agreement thereunder shall confer on any
employee any right to continue in the employ of the Company or any of its
subsidiaries or affect, in any way, the right of the Company or any of its
subsidiaries to terminate his or her employment at any time.
5. Price. The option price for all Incentive Stock Options granted under
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the Plan shall be determined by the Committee but shall not be less than 100% of
the fair market value of the Common Shares at the date of grant of such option.
The option price for options granted under the Plan which do not qualify as
Incentive Stock Options, and, if applicable, the price for all awards shall also
be determined by the Committee. For purposes of the preceding sentence and for
all other valuation purposes under the Plan, the fair market value of the Common
Shares shall be as reasonably determined by the Committee. If on the date of
grant of any option or award hereunder the Common Shares are not traded on an
established securities market, the Committee shall make a good faith attempt to
satisfy the requirements of this Section 5 and in connection therewith shall
take such action as it deems necessary or advisable.
6. Term. Each option and award and all rights and obligations thereunder
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shall expire on the date determined by the Committee and specified in the option
or award agreement. The Committee shall be under no duty to provide terms of
like duration for options or awards granted under the Plan, but the term of an
Incentive Stock Option may not extend more than ten (10) years from the date of
grant of such option and the term of options granted under the Plan which do not
qualify as Incentive Stock Options may not extend more than fifteen (15) years
from the date of granting such option.
7. Exercise of Option or Award. (a) The Committee shall have full and
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complete authority to determine whether an option or award will be exercisable
in full at any time or from time to time during the term thereof, or to provide
for the exercise thereof in such installments, upon the occurrence of such
events (such as termination of employment for any reason) and at such times
during the term of the option as the Committee may determine and specify in the
option or award agreement.
(b) The exercise of any option or award granted hereunder shall only be
effective at such time that the sale of Common Shares pursuant to such exercise
will not violate any state or federal securities or other laws.
(c) An optionee or grantee electing to exercise an option or award shall
give written notice to the Company of such election and of the number of shares
subject to such exercise. The full purchase price of such shares shall be
tendered with such notice of exercise. Payment shall be made to the Company in
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cash (including bank check, certified check, personal check, or money order),
or, at the discretion of the Committee and as specified by the Committee, (i) by
delivering certificates for the Company's Common Shares already owned by the
optionee or grantee having a fair market value as of the date of grant equal to
the full purchase price of the shares, or (ii) by delivering the optionee's or
grantee's promissory notes, which shall provide for interest at a rate not less
than the minimum rate required to avoid the imputation of income, original issue
discount, or below-market-rate loan pursuant to Sections 483, 1274, or 7872 of
the Code or any successor provisions thereto, or (iii) a combination of cash,
the optionee's or grantee's promissory note and such shares. The fair market
value of such tendered shares shall be determined as provided in Section 5
herein. The optionee's or grantee's promissory note shall be a full recourse
liability of the optionee and may, at the discretion of the Committee, be
secured by a pledge of the shares being purchased. Until such person has been
issued the shares subject to such exercise, he or she shall possess no rights as
a shareholder with respect to such shares.
8. Performance Awards. The Committee is further authorized to grant
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Performance awards. Subject to the terms of this Plan and any applicable award
agreement, Performance awards granted under the Plan (i) may be denominated or
payable in cash, Common Shares (including, without limitation, restricted
stock), other securities, other awards, or other property and (ii) shall confer
on the holder thereof rights valued as determined by the Committee, in its
discretion, and payable to, or exercisable by, the holder of the Performance
awards, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee, in its discretion, shall
establish. Subject to the terms of this Plan and any applicable award agreement,
the performance goals to be achieved during any performance period, the length
of any performance period, the amount of any Performance award granted, and the
amount of any payment or transfer to be made by the grantee and by the Company
under any Performance award shall be determined by the Committee.
9. Income Tax Withholding and Tax Bonuses. In order to comply with all
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applicable federal or state income tax laws or regulations, the Company may take
such action as it deems appropriate to ensure that all applicable federal or
state payroll, withholding, income, or other taxes, which are the sole and
absolute responsibility of an optionee or grantee under the Plan, are withheld
or collected from such optionee or grantee. In order to assist an optionee or
grantee in paying all federal and state taxes to be withheld or collected upon
exercise of an option or award which does not qualify as an Incentive Stock
Option hereunder, the Committee, in its absolute discretion and subject to such
additional terms and conditions as it may adopt, shall permit the optionee or
grantee to satisfy such tax obligations by (i) electing to have the Company
withhold a portion of the shares otherwise to be delivered upon exercise of such
option or award with a fair market value, determined in accordance with Section
5 herein, equal to such taxes or (ii) delivering to the Company Common Shares
other than the shares
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issuable upon exercise of such option or award with a fair market value,
determined in accordance with Section 5, equal to such taxes.
10. Additional Restrictions. The Committee shall have full and complete
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authority to determine whether all or any part of the Common Shares of the
Company acquired upon exercise of any of the options or awards granted under the
Plan shall be subject to restrictions on the transferability thereof or any
other restrictions affecting in any manner the optionee's or grantee's rights
with respect thereto, but any such restriction shall be contained in the
agreement relating to such options or awards.
11. Ten Percent Shareholder Rule. Notwithstanding any other provision in
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the Plan, if at the time an option is otherwise to be granted pursuant to the
Plan the optionee owns directly or indirectly (within the meaning of Section
424(d) of the Code) Common Shares of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or its parent or subsidiary corporations, if any (within the meaning of
Section 422(b)(6) of the Code), then any Incentive Stock Option to be granted to
such optionee pursuant to the Plan shall satisfy the requirements of Section
422(c)(5) of the Code, and the option price shall not be less than 110% of the
fair market value of the Common Shares of the Company determined as described
herein, and such option by its terms shall not be exercisable after the
expiration of five (5) years from the date such option is granted.
12. Non-Transferability. No option or award granted under the Plan shall
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be transferable by an optionee or grantee, otherwise than by will or the laws of
descent or distribution. Except as otherwise provided in an option or award
agreement, during the lifetime of an optionee or grantee, the option shall be
exercisable only by such optionee or grantee.
13. Dilution or Other Adjustments. If there shall be any change in the
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Common Shares through merger, consolidation, reorganization, recapitalization,
dividend in the form of stock (of whatever amount), stock split, or other change
in the corporate structure, appropriate adjustments in the Plan and outstanding
options and awards shall be made by the Committee. In the event of any such
changes, adjustments shall include, where appropriate, changes in the aggregate
number of shares subject to the Plan, the number of shares and the price per
share subject to outstanding options and awards and the amount payable upon
exercise of outstanding awards, in order to prevent dilution or enlargement of
option or award rights.
14. Amendment or Discontinuance of Plan. The Board of Directors may amend
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or discontinue the Plan at any time. Subject to the provisions of Section 13 no
amendment of the Plan, however, shall without shareholder approval: (i) increase
the maximum number of shares under the Plan as provided in Section 2 herein,
(ii) decrease the minimum price provided in Section 5 herein, (iii) extend
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the maximum term under Section 6, or (iv) modify the eligibility requirements
for participation in the Plan. The Board of Directors shall not alter or impair
any option or award theretofore granted under the Plan without the consent of
the holder of the option.
15. Time of Granting. Nothing contained in the Plan or in any resolution
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adopted or to be adopted by the Board of Directors or by the shareholders of the
Company, and no action taken by the Committee or the Board of Directors (other
than the execution and delivery of an option or award agreement), shall
constitute the granting of an option or award hereunder.
16. Effective Date and Termination of the Plan. (a) The Plan was approved
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by the Board of Directors on February 20, 1998, and shall be approved by the
shareholders of the Company within twelve (12) months thereof.
(b) Unless the Plan shall have been discontinued as provided in Section 14
hereof, the Plan shall terminate December 31, 2008. No option or award may be
granted after such termination, but termination of the Plan shall not, without
the consent of the optionee or grantee, alter or impair any rights or
obligations under any option or award theretofore granted.
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