IMERGENT, INC.
(formerly Netgateway, Inc.)
AMENDED AND RESTATED
1999 STOCK OPTION PLAN FOR NON-EXECUTIVES
1. Purpose; Type of Awards; Construction.
The purpose of the Amended and Restated 1999 Stock Option Plan for
Non-Executives (the "Plan") of Imergent, Inc., a Delaware corporation (the
"Company"), is to attract and retain employees (including officers), consultants
and persons willing to serve as directors of the Company, or any Subsidiary or
Affiliate which now exists or hereafter is organized or acquired, and to furnish
additional incentives to such persons by encouraging them to acquire a
proprietary interest in the Company. Pursuant to Section 6 of the Plan, there
may be granted Options, including "incentive stock options" and "nonqualified
stock options". The Plan is intended to satisfy the requirements of Rule 16b-3
promulgated under Section 16 of the Exchange Act and shall be interpreted in a
manner consistent with the requirements thereof.
2. Definitions.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Administrator" means the Board or, if and so long as a Committee
has been established and is in existence, the Committee.
(b) "Affiliate" means any entity if, at the time of granting of an
Option, (i) the Company, directly, owns at least 20% of the combined voting
power of all classes of stock of such entity or at least 20% of the
ownership interests in such entity or (ii) such entity, directly or
indirectly, owns at least 20% of the combined voting power of all classes
of stock of the Company.
(c) "Beneficiary" means the person, persons, trust or trusts which have
been designated by an Optionee in his or her most recent written
beneficiary designation filed with the Company to receive the benefits
specified under the Plan upon his or her death, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the
person, persons, trust or trusts entitled by will or the applicable laws of
descent and distribution to receive such benefits.
(d) "Board" means the Board of Directors of the Company.
(e) "Change in Control" means a change in control of the Company which
will be deemed to have occurred if:
(i) any "person," as such term is used in Section 13(d) and 14(d)
of the Exchange Act (other than an Exempt Person), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
voting securities;
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
clause (i), (iii), or (iv) of this Section 2(e)) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A)
a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving or parent entity) 50% or more of the
combined voting power of the voting securities of the Company or such
surviving or parent entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinbefore defined), other than an Exempt Person,
acquired 50% or more of the combined voting power of the Company's then
outstanding securities, or
(iv) the stockholders of the Company approve of a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets (or
any transaction having a similar effect).
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the compensation committee of the Board,
consisting exclusively of two or more Non-Employee Directors (as defined in
Rule 16b-3), if and as the same may be established by the Board to
administer the Plan; provided, however, that to the extent required for the
Plan to comply with the applicable provisions of Section 162(m) of the
Code, "Committee" means either such committee or a subcommittee of that
committee, as the case may be, which shall be constituted to comply with
the applicable requirements of Section 162(m) of the Code and the
regulations promulgated thereunder.
(h) "Company" means Imergent, Inc., a corporation organized under the
laws of the State of Delaware, or any successor corporation.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and as now or hereafter construed, interpreted
and applied by regulations, rulings and cases.
(j) "Exempt Person" means (1) the Company, (2) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company,
(3) any corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of
Stock, or (4) any person or group of persons who, immediately prior to the
adoption of this Plan, owned more than 50% of the combined voting power of
the Company's then outstanding voting securities.
(k) "Fair Market Value" means, with respect to Stock or other property,
the fair market value of such Stock or other property determined by such
methods or procedures as shall be established from time to time by the
Administrator. Notwithstanding the foregoing, the per share Fair Market
Value of Stock as of a particular date shall mean (i) if the shares of
Stock are then listed on a national securities exchange, the closing sales
price per share of Stock on the national securities exchange on which the
Stock is principally traded, for the last preceding date on which there was
a sale of such Stock on such exchange, or (ii) if the shares of Stock are
then traded on the National Market System of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the reported per
share closing price of the Stock on the day prior to such date or, if there
was no such price reported for such date, on the next preceding date for
which such a price was reported, or (iii) if the shares of Stock are then
traded in an over-the-counter market other than on the NASDAQ National
Market System, the average of the closing bid and asked prices for the
shares of Stock in such over-the-counter market for the last preceding date
on which there was a sale of such Stock in such market, or (iv) if the
shares of Stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as the Administrator, in
its sole discretion, shall determine in good faith.
(l) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "NQSO" means any Option not designated as an ISO.
(n) "Option" means a right, granted to an Optionee under Section 6(b)
of the Plan, to purchase shares of Stock. An Option may be either an ISO or
an NQSO.
(o) "Optionee" means a person who, as an employee (including officer),
consultant or director of the Company, a Subsidiary or an Affiliate, has
been granted an Option.
(o) "Plan" means this Amended and Restated Imergent, Inc. 1999 Stock
Option Plan for Non-Executives, as amended from time to time.
(p) "Rule 16b-3" means Rule 16b-3, as from time to time in effect,
promulgated by the Securities and Exchange Commission under Section 16 of
the Exchange Act, including any successor to such Rule.
(q) "Stock" means the common stock, par value $.001 per share, of the
Company.
(r) "Stock Option Agreement" means any written agreement, contract, or
other instrument or document evidencing an Option.
(s) "Subsidiary" means any corporation in which the Company, directly
or indirectly, owns stock possessing 50% or more of the total combined
voting power of all classes of stock of such corporation.
3. Administration
The Plan shall be administered by the Administrator. The Administrator
shall have the authority in its discretion, subject to and not inconsistent with
the express provisions of the Plan, to administer the Plan and to exercise all
the powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Options; to determine the persons to whom and
the time or times at which Options shall be granted; to determine the type and
number of Options to be granted, the number of shares of Stock to which Options
may relate and the terms, conditions, restrictions and performance criteria
relating to any Options; to determine whether, to what extent, and under what
circumstances Options may be settled, canceled, forfeited, exchanged, or
surrendered; to make adjustments in the terms and conditions of, and the
criteria and performance objectives included in, Options in recognition of
unusual or non-recurring events affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any Subsidiary or
Affiliate, or in response to changes in applicable laws, regulations, or
accounting principles; to designate Affiliates; to construe and interpret the
Plan and any Options; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of the Stock Option
Agreements (which need not be identical for each Optionee); and to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
The Administrator may appoint a chairperson and a secretary and may
make such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Administrator shall be made by a majority of its members either present in
person or participating by conference telephone at a meeting or by written
consent. The Administrator may delegate to one or more of its members or to one
or more agents such administrative duties as it may deem advisable, and the
Administrator or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any responsibility
the Administrator or such person may have under the Plan. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all persons, including the Company, and any Subsidiary, Affiliate or
Optionee (or any person claiming any rights under the Plan from or through any
Optionee) and any stockholder.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Option
granted hereunder.
4. Eligibility.
Options may be granted to employees of the Company and its present or
future Subsidiaries and Affiliates, in the discretion of the Administrator. In
determining the person to whom Options shall be granted and the type of Options
granted (including the number of shares to be covered by such Options), the
Administrator shall take into account such factors as the Administrator shall
deem relevant in connection with accomplishing the purposes of the Plan.
5. Stock Subject to the Plan.
The maximum number of shares of Stock reserved for the grant of Options
under the Plan shall be 1,000,000 shares of Stock (provided that ISO's may only
be granted out of the 500,000 shares reserved for issuance prior to April 9,
2003), subject to adjustment as provided herein. Such shares may, in whole or in
part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or
otherwise. The number of shares of Stock available for issuance under the Plan
shall be reduced by the number of shares of Stock subject to outstanding
Options. If any shares subject to an Option are forfeited, canceled, exchanged
or surrendered or if an Option otherwise terminates or expires without a
distribution of shares to the Optionee, the shares of Stock with respect to such
Option shall, to the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Options under the
Plan. In no event shall any Optionee acquire, pursuant to any awards of Options
under this Plan, more than 15% of the aggregate number of shares of Stock
reserved for awards under the Plan.
In the event that the Administrator shall determine that any dividend
or other distribution (whether in the form of cash, Stock, or other property),
recapitalization, stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of an Optionee under the Plan, then the Administrator shall make such
equitable changes or adjustments as it deems necessary or appropriate to any or
all of (i) the number and kind of shares of Stock which may thereafter be issued
in connection with Options, (ii) the number and kind of shares of Stock issued
or issuable in respect of outstanding Options, and (iii) the exercise price,
grant price, or purchase price relating to any Option; provided that, with
respect to ISOs, such adjustment shall be made in accordance with Section 424(h)
of the Code.
6. Specific Terms of Options.
(a) General. The term of each Option shall be for such period as may be
determined by the Administrator. The Administrator may make rules relating
to Options, and may impose on any Option or the exercise thereof, at the
date of grant or thereafter, such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Administrator shall
determine.
(b) Options. The Administrator is authorized to grant Options to
Optionees on the following terms and conditions:
(i) Type of Option. The Stock Option Agreement evidencing the
grant of an Option under the Plan shall designate the Option as an ISO
(in the event its terms, and the individual to whom it is granted,
satisfy the requirements for ISOs under the Code), or an NQSO.
(ii) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Administrator;
provided that in the case of an ISO, such exercise price shall be not
less than the Fair Market Value of a share of Stock on the date of
grant of such Option and, in the case of an ISO granted to the holder
of more than 10% of the Stock outstanding at the date of grant of such
Option, such exercise price shall be not less than 110% of the Fair
Market Value on such date of grant. In no event shall the exercise
price for the purchase of shares of Stock be less than par value. The
exercise price for Stock subject to an Option may be paid in cash or by
an exchange of Stock previously owned by the Optionee, or a combination
of both, in an amount having a combined value equal to such exercise
price. Any shares of Stock exchanged upon the exercise of any Option
shall be valued at the Fair Market Value on the date on which such
shares are exchanged. An Optionee also may elect to pay all or a
portion of the aggregate exercise price by having shares of Stock with
a Fair Market Value on the date of exercise equal to the aggregate
exercise price withheld by the Company or sold by a broker-dealer in
accordance with applicable law.
(iii) Term and Exercisability of Options. The date on which the
Administrator adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted. Options shall be
exercisable over the exercise period (which shall not exceed ten years
from the date of grant or five years from the date of grant in the case
of an ISO granted to a holder of more than 10% of Stock outstanding as
of such date), at such times and upon such conditions as the
Administrator may determine, as reflected in the Stock Option
Agreement. An Option may be exercised to the extent of any or all full
shares of Stock as to which the Option has become exercisable, by
giving written notice of such exercise to the Company's Secretary and
paying the exercise price as described in Section 6(b)(ii).
(iv) Termination of Employment, etc. An Option may not be
exercised unless the Optionee is then in the employ of the Company or
any Subsidiary or Affiliate (or a company or a parent or subsidiary
company of such company issuing or assuming the Option in a transaction
to which Section 424(a) of the Code applies), and unless the Optionee
has continuously maintained any of such relationships, since the date
of grant of the Option; provided that, the Stock Option Agreement may
contain provisions extending the exercisability of Options, in the
event of specified terminations, to a date not later than the
expiration date of such Option. The Administrator may establish a
period during which the Beneficiaries of an Optionee who died while an
employee, director or independent contractor of the Company or any
Subsidiary or Affiliate or during any extended period referred to in
the immediately preceding proviso may exercise those Options which were
exercisable on the date of the Optionee's death; provided that, no
Option shall be exercisable after its expiration date.
(v) Nontransferability. Options shall not be transferable by an
Optionee except by will or the laws of descent and distribution and
shall be exercisable during the lifetime of an Optionee only by such
Optionee or his guardian or legal representative.
(vi) Other Provisions. Options may be subject to such other
conditions as the Administrator may prescribe in its discretion.
7. Change in Control Provisions.
In the event of a Change in Control, any and all Options then
outstanding shall become fully exercisable and vested, whether or not
theretofore vested and exercisable.
8. General Provisions.
(a) Compliance with Legal and Exchange Requirements. The Plan, the
granting and exercising of Options thereunder, and the other obligations of
the Company under the Plan and any Stock Option Agreement, shall be subject
to all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may be required.
The Company, in its discretion, may postpone the issuance or delivery of
Stock under any Option until completion of such stock exchange listing or
registration or qualification of such Stock or other required action under
any state, federal or foreign law, rule or regulation as the Company may
consider appropriate, and may require any Optionee to make such
representations and furnish such information as it may consider appropriate
in connection with the issuance or delivery of Stock in compliance with
applicable laws, rules and regulations.
(b) No Right to Continued Employment, etc. Nothing in the Plan or in
any Option granted or Stock Option Agreement entered into pursuant to the
Plan shall confer upon any Optionee the right to continue in the employ of
the Company, any Subsidiary or any Affiliate, as the case may be, or to be
entitled to any remuneration or benefits not set forth in the Plan or such
Stock Option Agreement or to interfere with or limit in any way the right
of the Company or any such Subsidiary or Affiliate to terminate such
Optionee's employment, directorship or independent contractor relationship.
(c) Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Option granted, any payment relating to an Option under
the Plan (including from a distribution of Stock), or any other payment to
an Optionee, amounts of withholding and other taxes due in connection with
any transaction involving an Option, and to take such other action as the
Administrator may deem advisable to enable the Company and an Optionee to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Option. This authority shall include authority
to withhold or receive Stock or other property and to make cash payments in
respect thereof in satisfaction of an Optionee's tax obligations.
(d) Amendment and Termination of the Plan. The Board may at any time
and from time to time alter, amend, suspend, or terminate the Plan in whole
or in part; provided that, no amendment which requires stockholder approval
in order for the Plan to continue to comply with Rule 16b-3 or Sections 422
and 424 of the Code and the regulations promulgated thereunder shall be
effective unless the same shall be approved by the requisite vote of the
stockholders of the Company entitled to vote thereon. Notwithstanding the
foregoing, no amendment shall affect adversely any of the rights of any
Optionee, without such Optionee's consent, under any Option theretofore
granted under the Plan.
(e) No Rights to Options; No Stockholder Rights. No Optionee shall have
any claim to be granted any Option under the Plan, and there is no
obligation for uniformity of treatment of Optionees. Except as provided
specifically herein, an Optionee or a transferee of an Option shall have no
rights as a stockholder with respect to any shares covered by the Option
until the date of the issuance of a stock certificate to such Optionee for
such shares.
(f) Unfunded Status of Options. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. Nothing contained
in the Plan or any Option shall give any such Optionee any rights that are
greater than those of a general creditor of the Company.
(g) No Fractional Shares. No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Option. The Administrator shall
determine whether cash, other Options, or other property shall be issued or
paid in lieu of such fractional shares or whether such fractional shares or
any rights thereto shall be forfeited or otherwise eliminated.
(h) Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of
California without giving effect to the conflict of laws principles
thereof.
(i) Effective Date. The Plan shall be effective as of July 1, 1999.
(j) Plan Termination. The Board may terminate the Plan at any time with
respect to any shares of Stock that are not subject to Options. Unless
terminated earlier by the Board, the Plan shall terminate ten years after
the effective date and no Options shall be granted under the Plan after
such date. Termination of the Plan under this Section 8(j) will not affect
the rights and obligations of any Optionee with respect to Options granted
prior to termination.