EXHIBIT 99.4
COMPUTER SOFTWARE INC.
INCENTIVE STOCK OPTION PLAN
1. Purpose and Effect of the Plan. This Incentive Stock Option Plan
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(the "Plan") is intended to promote the interests of Computer Software Inc. (the
"Corporation") and its shareholders by encouraging certain key employees who
will be responsible for the future growth and continued development of the
Corporation to increase their equity ownership in the Corporation through the
purchase of the Corporation's Class B Non-Voting Common Stock thereby giving
them, as shareholders, an increased personal interest in, and a greater concern
for, the Corporation's continued success and progress. The Plan is also intended
to aid the Corporation in competing with other enterprises for the services of
new executives and key employees needed to help insure continued development.
2. Name. The Plan shall be known as the "Computer Software Inc.
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Incentive Stock Option Plan."
3. Definition of Terms. In addition to words and terms that may be
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defined elsewhere in the Plan, the following words and terms as used in the Plan
shall have the following meanings unless the context or use fairly indicates
another or different meaning or intent, which definitions shall be equally
applicable to both the singular and plural forms of such words and terms.
A. "Board" shall mean the Board of Directors of the Corporation.
B. "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
C. "Common Stock" shall mean the Class B Non-Voting Common Stock
of the Corporation having a par value of One Cent ($0.01) per share.
D. "Participant" shall mean the officer or employee of the
Corporation to whom an option is granted under the Plan.
E. "Parent" shall mean any corporation which at the time
qualifies as a parent of the Corporation under the definition of
"parent corporation" contained in Code Section 424(e).
F. "Subsidiary" shall mean any corporation which at the time
qualifies as a subsidiary of the Corporation under the definition of
"subsidiary corporation" contained in Code Section 424(f).
4. Incentive Stock Options. Options granted in
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accordance with the terms hereof are to be incentive stock options as
provided in Code Section 422.
5. Administration. The Plan shall be administered by the Board. The
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Board may interpret the Plan, prescribe, amend and rescind any rules and
regulations necessary or appropriate for the administration of the Plan and make
such other determinations and take such other action as it deems necessary or
desirable (i) to assure that all options granted under the Plan constitute
"incentive stock options" under Code Section 422, (ii) for the administration of
the Plan, and (iii) for the protection of the Corporation except as otherwise
all reserved to the shareholders of the Corporation. Without limiting the
generality of the foregoing, the Board, in its discretion, may treat all or any
part of any period not in excess of ninety (90) days during which a Participant
is on military duty or on an approved leave of absence from the Corporation as a
period of employment of such Participant by the Corporation for purposes of
accrual of his or her rights under his or her option. In addition, the Board
shall have the specific authority to grant options with different terms to
different Participants, and shall further have the specific authority to require
a minimum holding period between the grant and time of exercise of all or any
portion of any options as well as the time of disposition of any common stock
acquired through the exercise of any option and to determine that the options
granted to a Participant may be exercised only in installments or pursuant to
any vesting schedule. Any interpretation, determination or other action made or
taken by the Board shall be final, binding and conclusive. No member of the
Board shall be liable for any action taken or omitted or determination made in
good faith with respect to the Plan or any option granted under the Plan.
6. Shares Subject to Plan. As of June 1, 1995, the Corporation is
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authorized to issue 20,000 shares of Class A voting common stock (the "Class A
Stock") and 1,980,000 total shares of Common Stock of which 5,000 shares of
Class A Stock and 550,000 shares of Common Stock are issued and outstanding.
Options may be granted by the Corporation from time to time to purchase an
aggregate of 530,000 shares of Common Stock, subject to adjustment as provided
in Item 11 below. The shares issued upon exercise of options granted under the
Plan may be authorized and unissued shares or shares held by the Corporation as
treasury stock. If any option granted under the Plan shall terminate, expire
or, with the consent of the Participant, be cancelled as to any shares, new
options may thereafter be granted covering any such shares.
7. Eligibility. Options may be granted to those employees of the
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Corporation (including officers, whether or not they are directors) selected by
the Board from time to time who have and exercise key management functions and
responsibilities for the Corporation. The granting of an option to any employee
shall neither entitle such employee to, nor disqualify such employee from,
participation in any future option grants.
8. Grant of Options. The Board shall have the authority, subject to
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the terms of the Plan, to: (a) determine and designate from time to time those
employees of the Corporation to whom options are to be granted provided that no
director of the Corporation who is not also an employee of the Corporation shall
be entitled to receive any option under the Plan; (b) determine
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the number of shares subject to each option; (c) determine the duration of the
exercise period for any option; and (d) determine that the options granted to a
Participant may be exercised only in installments. The date of grant of an
option under the Plan will be the date on which the option is awarded by the
Board.
9. Terms and Conditions of Options. Each option shall be evidenced
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by an option agreement which shall contain such terms and conditions consistent
with the provisions of the Plan as may be approved by the Board and shall be
signed by the President of the Corporation and the Participant. Each option
granted under the Plan shall be subject to the terms and conditions contained in
Paragraph A through F below and to such other terms and conditions as the Board
may deem appropriate; provided, however, that no option shall be subject to any
condition that is inconsistent with the provisions of Code Section 422. In the
event that any condition imposed hereunder on an option is at any time
determined by the Internal Revenue Service or a court of competent jurisdiction
to be inconsistent with Code Section 422, then each option shall be deemed to
have been granted without such condition and such option shall continue in
effect under such remaining terms and conditions as may be applicable as if the
invalid condition had not been included.
A. Option Period. Each option agreement shall specify (i) the period
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during which all or any identifiable portion of the option thereunder
is exercisable (which period shall not exceed ten (10) years from the
date of grant but may be shorter than said ten year period if so
determined by the Board) and (ii) shall provide that the option shall
expire at the end of such period.
B. Option Price. The option price per share shall be determined by
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the Board at the time any option is granted, and shall not be less
than one hundred (100%) percent of the fair market value of a share of
Common Stock on the day that the option is granted. Such price shall
be subject to adjustment as hereinafter provided under this Item 9 and
as provided in Item 11. In the event that the Corporation's Common
Stock is listed upon an established stock exchange, such fair market
value shall be deemed to be the closing price of the Corporation's
Common Stock on such stock exchange on the day the option is granted
or, if no sale of the Corporation's Common Stock shall have been made
on any stock exchange on that day, the fair market value shall be
determined as such price for the next preceding day upon which a sale
shall have occurred. In the event that the Corporation's Common Stock
is not listed upon an established exchange but is quoted on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the fair market value shall be deemed to be the mean
between the closing dealer "bid" and "asked" prices for the
Corporation's Common Stock as quoted on NASDAQ for the day of the
grant, and if no "bid" and "asked" prices are quoted for the day of
the grant, the fair market value shall be determined by reference to
such prices on the next preceding day on which such prices are
quoted. In the event that the Corporation's Common Stock is neither
listed on an
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established stock exchange nor quoted on NASDAQ, the fair market value
on the day the option is granted shall be determined in good faith by
the Board.
C. Ten Percent Shareholders. Options shall not be granted to any
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employee who, immediately before the option is granted, owns stock
possessing more than ten (10%) percent of the total combined voting
power of all classes of capital stock of the Corporation or of its
Parent or Subsidiary; provided, however, that this prohibition shall
not apply if at the time such option is granted the option price is at
least one hundred ten (110%) percent of the fair market value of the
Common Stock and such option is not exercisable after the expiration
of five (5) years from the date such option is granted.
D. Maximum Option Exercise. The aggregate value of the shares
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(valued at time of grant in accordance with Paragraph B above) for
which any Participant may exercise incentive stock options for the
first time in any calendar year (under all incentive stock option
plans of the Corporation and any Parent and Subsidiary) shall not
exceed $100,000.
E. Termination of Employment. The option of any Participant who
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shall cease to be an employee of the Corporation shall immediately
terminate upon such cessation of employment, except as otherwise
provided in an Option Agreement signed by the President of the
Corporation and the Participant or except when such cessation of
employment is caused by the death or the permanent and total
disability of the Participant. The personal representative of the
Participant (in the event of his or her death or permanent and total
disability resulting in his or her incapacity) or the Participant (in
the event of his or her permanent and total disability not resulting
in his or her incapacity) may, subject to the provisions hereof and
before the earlier of the option's expiration date or the expiration
of three (3) months after the date of such death or permanent and
total disability, exercise the option granted to such Participant to
the same extent that the Participant might have exercised such option
on the date of his or her death or permanent and total disability, but
not further or otherwise. To the extent that any option is not
exercisable at the date of the death or permanent or total disability
of a Participant or is not exercised in accordance herewith, it shall
terminate at the earlier of the option's expiration date or the
expiration of the three (3) month period following such death or
permanent and total disability. For purposes of this Paragraph, (i) a
Participant shall be considered to be subject to a permanent and total
disability when such Participant is determined to be permanently and
totally disabled under the applicable terms and provisions of any
Option Agreement entered into between said Participant and the
Corporation or, in the event such Option Agreement fails to so
provide, then within the meaning of Code Section 22(e)(3), and (ii)
the date of any such total and permanent disability shall be deemed to
be the day following the last day the Participant performed services
for the Corporation. Nothing in the Plan
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shall be construed as imposing any obligation on the Corporation to
continue the employment of any Participant.
F. Period of Exercise Option. Any option granted hereunder may, prior
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to its expiration or termination, be exercised from time to time, in
whole or in part, up to the total number of shares with respect to which
it shall have then become exercisable. An option granted hereunder may
become exercisable in installments or pursuant to vesting schedule all as
determined by the Board; provided, however, that if the Board grants an
option or options exercisable in more than one installment or pursuant to
any vesting schedule, and if the employment of a Participant holding such
option is terminated by death or permanent and total disability as
provided in Paragraph E above, then the option shall be exercisable in
accordance with the terms of Paragraph E only as to such number of shares
as to which the Participant had the right to exercise the option on the
day immediately preceding the date of death or permanent and total
disability.
10. Exercise of Option. The exercise of any option under the Plan
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shall be subject to the provisions of paragraphs A, B and C below.
A. Method of Exercising Option. Any option granted hereunder or any
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portion thereof may be exercised by the Participant by delivering to the
Corporation at its main office (attention of its President) written
notice of the number of shares with respect to which the option rights
are being exercised and by paying in full the purchase price of the
shares purchased. Upon receipt of such notice and payment, the
Corporation shall issue and deliver to the Participant a certificate for
the number of shares of Common Stock with respect to which options were
so exercised.
B. Payment of Purchase Price. The purchase price of the shares as to
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which an option is exercised shall be paid in full to the Corporation at
the time of exercise. The payment may be made either in credit or its
equivalent, or, if acceptable and agreed to by the Board at the time of
such exercise, with stock of the Corporation previously acquired by the
Participant; provided, however, that the Board, in its discretion, may
refuse, suspend or terminate the right of Participants to pay with stock
of the Corporation should the Board deem such action to be in the best
interests of the Corporation.
C. Withholding. The Corporation's obligation to deliver shares on the
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exercise of any option shall be subject to any applicable federal, state
and local tax withholding requirements.
11. Capital Adjustments. The number and price of shares of Common
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Stock covered by each option and the total number of shares that may be optioned
and sold under the Plan shall be proportionately adjusted to reflect any stock
dividend, stock split or share
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combination of the Common Stock or any recapitalization of the Corporation
occurring on or after May 1, 1995. In the event of any merger, consolidation,
reorganization, liquidation or dissolution of the Corporation, or any exchange
of shares involving the Common Stock, any option granted under the Plan shall
automatically be deemed to pertain to the securities and other property to which
a holder of the number of shares of Common Stock covered by the option would
have been entitled to receive in connection with any such event. No option
granted pursuant to this Plan shall be adjusted in a manner that causes the
option to fail to qualify as an incentive stock option within the meaning of
Code Section 422A. Except as expressly provided in this Item 11, the Participant
shall have no rights by reason of any change in stock in the Corporation or any
subsequent issuance of additional options covering additional shares of Common
Stock by the Corporation. The grant of an option pursuant to this Plan shall not
affect in any way the right of power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or
any part of its business or assets. The Board shall have the sole discretion to
make all interpretations and determinations required under this Item to the
extent it deems equitable and appropriate.
12. Reservation of Shares. The Corporation, during the term of any
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options granted hereunder, will at all times reserve and keep available, and
will seek to obtain from any regulatory body having jurisdiction any requisite
authority in order to issue and sell such number of shares of Common Stock as
shall be sufficient to satisfy the requirements of the options granted under the
Plan. If, in the opinion of the Corporation's counsel, the issuance or sale of
any shares of the Corporation's stock hereunder shall not be lawful for any
reason, including the inability of the Corporation to obtain from any regulatory
body having jurisdiction authority deemed by such counsel to be necessary for
such issuance of sale, the Corporation shall not be obligated to issue or sell
any such shares.
13. Securities Laws. Upon the exercise of an option at a time when
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there is not in effect under the Securities Act of 1933, as amended (the "Act"),
a current registration statement relating to the shares of Common Stock to be
received upon such exercise, the Participant shall represent and warrant in
writing to the Corporation that the shares purchased are being acquired for
investment and not with a view to the distribution thereof and shall agree to
the imposition of a legend on the certificate or certificates representing said
shares in substantially the following form and such other restrictive legends as
are required or advisable under the provisions of any applicable laws:
This stock certificate and the shares represented hereby have not been
registered under the Securities Act of 1933, as amended (the "Act"),
nor under any state securities laws and shall not be transferred at
any time in the absence of (i) an effective registration statement
under the Act with respect to such shares at such time; or (ii) an
opinion of counsel satisfactory to the Corporation and its counsel,
to the effect that such transfer at such time will not violate the
Act or any applicable state
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securities laws; or (iii) a "no action" letter from the Securities and
Exchange Commission and a comparable ruling from any applicable state
agency with respect to such state's securities laws.
No shares of Common Stock shall be issued or sold upon the
exercise of any option unless and until (i) the full amount of the purchase
price has been paid as provided in Item 10 hereof and (ii) the then applicable
requirements of the Act, the applicable securities laws of any other
jurisdiction, as any of the same may be amended, the rules and regulations of
the Securities and Exchange Commission and any other regulations of any
securities exchange on which the Common Stock may be listed shall have been
fully complied with and satisfied.
14. Transferability of Options. No option shall be assignable or
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transferable by a Participant except by will or by the laws of descent and
distribution. Any distributee by will or by the laws of descent and
distribution shall be bound by the provisions of the Plan. During the life of a
Participant, the option shall be exercisable only by such Participant. Any
attempt to assign, pledge, transfer, hypothecate or otherwise dispose of an
option and any levy of execution, attachment or similar process on an option
shall be null and void ab initio.
15. No Rights as Shareholders. A Participant shall not have any
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rights as a shareholder with respect to any shares covered by any option granted
hereunder until the exercise of such option and the issuance of a stock
certificate for such shares. No adjustment shall be made on the issuance of a
stock certificate to a Participant as to any dividends or other rights for
which the record date occurred prior to the date of issuance of such
certificate.
16. Indemnification and Exculpation. Each person who is or shall have
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been a member of the Board shall be indemnified and held harmless by the
Corporation against and from any and all loss, cost, liability or expense that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be
or become involved by reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by him or her in settlement
thereof (with the Corporation's written approval) or paid by him or her in
satisfaction of a judgment in any such action, suit or proceeding, except a
judgment in favor of the Corporation based upon a finding of his or her lack of
good faith; subject, however, to the condition that upon the institution of any
claim, action, suit or proceeding against him or her, he or she shall in writing
give the Corporation an opportunity, at its expense, to handle and defend the
same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of any
other right to which such person may be entitled as a matter of law or
otherwise, or any power that the Corporation may have to indemnify him or her or
hold him or her harmless. Each member of the Board, and each officer and
employee of the Corporation shall be fully justified in relying or acting in
good faith upon any information furnished in connection with the administration
of the Plan by any appropriate person or persons other than himself or herself.
In no event shall any person who is or shall have been a member of the Board, or
an officer or employee of the Corporation, be held liable for any determination
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made, or other action taken, or any omission to act in reliance upon any such
information as referred to in the preceding sentence, or for any action
(including the furnishing of information) taken, or any omission to act, when
any such determination, action or omission is made in good faith.
17. Use of Proceeds. Proceeds from the sale of stock pursuant to
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options granted under the Plan shall constitute general funds of the
Corporation.
18. Amemdment and Discontinuance. The Board or the shareholders of the
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Corporation may terminate or amend the Plan in any respect at any time, except
that no action of the Board or the shareholders may alter or impair a
Participant's rights under any outstanding option without such Participant's
consent and, without the prior approval of the shareholders: (i) the total
number of shares that may be optioned and sold under the Plan may not be
increased beyond 530,000 (except by adjustment pursuant to Item 11), (ii) the
price at which shares may be purchased pursuant to options granted hereunder may
not be reduced (except by adjustment pursuant to Item 11), (iii) the expiration
date of the Plan may not be extended, (iv) the Plan may not be changed in such a
manner that the options granted hereunder would fail to qualify as incentive
stock options under Code Section 422, and (v) the provisions of this Item 18 may
not be changed.
19. Term of Plan. The Plan shall be effective as of the date of the
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adoption of the Plan by the Board and the stockholders of the Corporation (the
"Adoption Date") and shall expire on the date which is one day prior to the ten
(10) year anniversary of the Adoption Date, unless sooner terminated as provided
in Item 18 hereof.
20. General. Except as the same may be governed by the Code and any
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applicable federal securities laws, the Plan and any options granted hereunder
shall be governed by and construed in accordance with the laws of the State of
Georgia. The granting of an option shall impose no obligation upon the optionee
to exercise such option. As herein used, the singular number shall include the
plural, the plural the singular, and the use of any gender shall be applicable
to all genders, unless the context or use shall fairly require a different
construction. Section or paragraph headings are employed herein solely for
convenience of reference, and such headings shall not affect the validity,
meaning or enforceability of any provision of the Plan. All references herein
to "Item" or "paragraph" shall mean the appropriately numbered Item or paragraph
of the Plan except where reference is made to the Code or any other specified
law or instrument.
AS APPROVED BY THE STOCKHOLDERS OF THE CORPORATION EFFECTIVE
JUNE 1, 1995.
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