EXHIBIT 10.1
ATTACHMENT D
FAR END ECHO CANCELLATION SOFTWARE
1. BACKGROUND AND PURPOSE OF EXHIBIT
This exhibit describes the Far End Echo Cancellation Software deliverable and
presents milestones for deliverable, payment and testing.
2. FAR END ECHO CANCELLATION SOFTWARE DESCRIPTION
e-Net will provide:
1. TMS320C203 Assembly source and object code that supports an 8 ms Echo Window
with a real time configurable delay parameter from 10 to 127 ms in 1 ms
increments. This code gives Com21 the capability to cancel Far End Echo.
2. Delay parameter function call which has an argument of port and returns the
delay parameter for the specified port. The Delay parameter function requires
that a call be made to a remote station which is answered and muted and then the
function called.
With the Far End Echo software development, the AIM unit will be able cancel
both near end echo (which is covered under prior contract) and far end echo when
the configurable delay parameter is tuned.
e-Net will provide the following test setup:
1. Use a two port AIM card, and communicating between the two ports.
2. Add delay to the call up to 120 ms in less than 6 ms increments and
configurable on a per call basis; and
3. Be able to enable/disable near end echo cancellation software (which is
covered under prior contract) and far end echo cancellation software on either
port
4. The above allows e-Net to demonstrate that Far End echo cancellation is
operational. A configurable delay parameter will be added in a Telephone Port 1
to Port 2 AAL1 local loopback as defined in Attachment C of the prior contract.
3. RESPONSIBILITIES OF E-NET AND COM21
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Description e-Net Com21
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Clock Synchronization X
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Setting Delay Parameter X
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Far End Echo integration into existing code X
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Far End test setup X
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Enable/Disable of near end echo cancellation
software and/or far end echo software X
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Delay Parameter Function that returns delay value per port X
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Calling of Delay Parameter Function X
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4. MILESTONE/PAYMENT
TIMEFRAME DESCRIPTION PAYMENT
MILESTONE 1 Within 2 week e-Net delivers $ 20,000
of Contract source, object
signing and test code
MILESTONE 2 2 weeks from e-Net delivers $ 5,000
Milestone 1 Delay Parameter
function
MILESTONE 3 4 weeks from Com21 verifies $ 15,000
Milestone 2 functionality
ADDITIONAL TECHNICAL, CONTRACTUAL, AND PRICE NOTES
a. Far End Echo Cancellation requires Clock Synchronization. If Clock
Synchronization is not provided, there may be Quality Issues. e-Net is not
providing Clock Synchronization hereunder.
b. Local/Near End Echo Tail may be reduced to 4 ms from 6 ms as stated
in the contract in Attachment C.
c. Processor Utilization may increase to 80 % for both channels with
Far End Echo Cancellation activated versus 65% stated in the contract in
Attachment C.
d. Enable/Disable of Near End Echo Cancellation Software and/or Far
End Echo Cancellation software must be configurable in real time and per
port.
[GRAPHIC]
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All other existing contract provisions remain as currently stated and are
unchanged hereby. IN WITNESS WHEREOF, the parties hereto have executed this
Attachment D to be added to the Software Development Agreement between
e-Net and Com21.
Com21, Inc e-Net, Inc
By: /S/ DAVID L. ROBERTSON By: /S/ DONALD J. SHOFF
------------------------ ---------------------
Name: DAVID L. ROBERTSON Name: DONALD J. SHOFF
------------------------ ---------------------
Title: V.P. FINANCE Title: V.P. FINANCE
------------------------ ---------------------
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ATTACHMENT E
VOICE OVER INTERNET PROTOCOL (VOIP) SOFTWARE, AND CALLER ID GENERATION,
1. BACKGROUND AND PURPOSE OF EXHIBIT
This exhibit describes the Voice Over Internet Protocol (VOIP) Software,
Caller ID Generation Software and AIM AMD Hardware Modifications
deliverables and presents milestones for deliverables, payments and
testing.
2. VOICE OVER INTERNET PROTOCOL (VOIP) SOFTWARE DESCRIPTION
VOIP LOAD
e-Net will provide a VOIP specific code base with:
1. TMS320C203 C and Assembly source and object code and documentation
that supports:
- IP Stack
- UDP process with length verification on received packets
- UDP process for transmit packets
- ARP and ICMP(Redirects and Echo responses)
- Basic Default route routing table
- Ethernet and AAL5 Header Generation and Parsing
- RTP/RTCP with Jitter and Buffer algorithms and silent insertion for lost
cells.
- DTMF Detection for digits `0-9, #, *,A,B,C,D'
- Software structure to Support configurable Ring Cadences
- Code base will remove Far End Echo Cancellation code
- Simple Gateway Control Protocol (SGCP) implementation based on CableLabs
PacketCableTM SGCP 1.1 Profile for Embedded Client Signaling limited to:
- Digit collection based Digit Map as defined in SGCP 1.1 for
Embedded Client Signaling.
- User tone signaling as defined in PacketCable Service
Requirements Draft Version 0.2 and a software structure to
configure tone characteristics for Internationalization.
- Tone generator function so that Com21 can generate/create single
and dual tones
- Basic State Machine for Incoming and Outgoing calls per SGCP 1.1
for Embedded Client Signaling
- Specific documentation covering the Call Flows and State Machine of
the AIM Client Software
Com21 will provide:
- Software at the Headend to process ARP and IP packets to the specific
AIM
- Software at the Headend or a remote agent to process SGCP messages for
call setup and control
- Any enhancement over basic Incoming and Outgoing Calls supported by
e-Net
CALLER ID GENERATION SPECIFICS
1. TMS320C203 C and Assembly source and object code that supports Caller
ID Generation for the US market which will meet the Bellcore Document
TR-NWT-000030 and TR-NWT-000031.
2. TMS320C203 C and Assembly source and object code that supports Caller
ID Generation for the Europe market which will meet European
Telecommunication Standard ETS 300 659-1 and ETS 300 659-2
3. Documentation of the functions for generating Caller ID and the
selection of type (US or Europe) and documented source code on the
generation.
The Caller ID Generation provided will work as described below:
1. A VOIP Gateway will receive Caller ID information from either the PSTN
or PBX .
2. The VOIP Gateway will send this information to the call agent at
either the Headend or remote agent in a H.323 or SGCP message.
3. The call agent will send the Caller ID information in Data Message
Format as described in Bellcore Document TR-NWT-000031 to AIM via SGCP
message or other mutually agreeable message.
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4. The AIM VOIP Card will ring the line called and outpulse the Caller ID
information per either the US or European Specification.
3. RESPONSIBILITIES OF E-NET AND COM21
DESCRIPTION E-NET COM21
SGCP on AIM X
SGCP on Headend or external Call Agent X
DTMF Detection on AIM X
(0-9 and `#' and `*')
RTP/RTCP on AIM X
IP Stack for UDP, with ARP and ICMP(Redirect and X
echo)
ARP and IP Processing at Headend X
Caller ID Generation (US and Europe
Implementations) X
Provide IP and DNS information to AIM X
Jitter Management and Silent Interpolation on AIM
X
Ethernet and AAL5 Header generation and parsing
X
Software structure to support various Ring Cadences
X
Caller ID in Data Message Format in an SGCP X
Message
Internationalization of Tones
X
Transmit and Receive of ATM Cells X
NOTES:
1. Conferencing is outside VOIP AIM scope and must be resolved by Com21
using an external MCU
2. ASDI display is outside VOIP AIM scope but Caller ID functionality is
supported as described above
3. The AIM implementation will not process or generate CRCs on the
Ethernet packet or AAL5
4. MILESTONE/PAYMENT
VOIP LOAD
DELIVERABLE TIMEFRAME DESCRIPTION PAYMENT
MILESTONE 1 Contract signing $ 10,000
MILESTONE 2 6 weeks from 1. E-Net deliverable of basic IP stack functionality with $ 10,000
Milestone 1 ARP, ICMP Echo and UDP Processing, DTMF Detection, an IP voice
encapsulation, and SGCP signaling. The deliverable will
include documentation, source and object code
2. Com21 to be able to receive an IP
Ping packet and route to specific AIM
card with the assigned IP address
from a PC outside the 100 Mbps
Ethernet interface on Headend.
3. Com21 to have SGCP signaling Call Agent that can
communicate with the AIM implementation
MILESTONE 3 4 weeks from 1. IP Stack with ICMP Redirect $ 10,000
Milestone 2 2. RTP/RTCP Support
MILESTONE 4 4 weeks from Com21 performs tests that e-Net ran to verify functionality or $ 16,000
Milestone 3 Com21 witnesses tests performed by e-Net
MILESTONE 5 10 weeks from Com21 verifies functionality in Integration testing $ 16,500
Milestone 4
PLUS
Note: In addition to the payment described above, the contract will be
modified to change the existing 30 months of Royalty payments of $5 (for
each unit of Company Product sold or otherwise distributed by the Company,
excluding Company Products distributed in connection with beta testing or
demonstration purposes, returns, products repurchased from inventory and
replacement) to 42 months Royalty payments of $5 for any Com21 product so
sold or distributed which is derived from e-Net's development effort under
the contract including contract modifications.
SGCP signaling software provided as part of the VOIP Load can be used
on other Com21 products without payment of royalty as stated above as
long as Com21 has met the milestone payments per the above VOIP Load
Schedule.
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CALLER IDENTIFICATION SOFTWARE
DELIVERABLE TIMEFRAME DESCRIPTION PAYMENT
MILESTONE 1 Milestone 3 of 1. Caller ID Generation (Bellcore and EU versions) $ 20,000
VOIP Load 2. SGCP signaling message for Caller ID
3. Deliverable will include documentation, source and object
code
MILESTONE 2 Milestone 4 of Com21 verifies functionality $ 20,000
VOIP Load
Note: Caller Identification Software is not subject to royalty payments as long
as Com21 has met the milestone payments per the above Caller Identification
Software schedule
5. STANDARDS IMPLEMENTATION CLARIFICATIONS
1. e-Net will support CABLELABS PACKETCABLETM SGCP 1.1 PROFILE FOR
EMBEDDED CLIENT SIGNALING with the following clarification:
- Com21 to provide IP Address and Endpoint names
- E-Net will support Digit Map with a "one-digit" digit map
approach supported and the full digit map approach.
- E-Net will support a minimum of four audio connections per
endpoint (2 calls with 2 connections each) but will not
support any mixing of input or output based on jitter buffer
size not to exceed 1K bytes.
- E-Net will support G.711 u-law and a-law encoding
- E-Net will provide a long duration connection event setable
to disconnect calls with minimum value of 1 hour and a
maximum value of 24 hours.
- Com21 to provided Caller ID Data Message Format as defined
in Bellcore Document TR-NWT-000031 in a mutually agreeable
packet format between the Head End and AIM.
- Com21 to finalize SGCP signaling messages between Call Agent
and AIM with an e-Net review to verify that the signaling is
in the SGCP implementation scope.
- e-Net will not implement any IP security.
6. VOIP LOAD TESTING
MILESTONE 2 ACCEPTANCE TESTING
Milestone 2 Acceptance Testing by e-Net will include:
1. Basic Load compiles and runs
2. DTMF Detection
3. Tones specified in PacketCable Service Requirements Draft Version
0.2 verified such as Busy, Dialtone, etc
4. Hook and Flash Detection
5. IP Stack verification with ARP and ICMP Echo using a Telset Card
6. Simulate Call Agent to test SGCP Gateway control functions
between 2 ports on an AIM
MILESTONE 3 ACCEPTANCE TESTING
Milestone 3 Acceptance Testing by e-Net will consist of:
1. ICMP Redirect using a Telset Card
2. RTP/RTCP working between 2 ports on an AIM
3. RTP/RTCP dropped packet test between 2 ports on an AIM
Note: Com21 will perform integration testing at their facility for end
to end functionality. Due to possible Com21 and e-Net development
schedule differences, Com21 is to verify e-Net deliverables in
Milestone 2 and 3 using basic tests that e-Net was able to perform at
their facility on a single AIM card to meet payment deliverables. The
Milestone 5 deliverable is positioned to allow Com21 to complete full
integration testing and proceed to Alpha Test.
7. CALLER ID TESTING
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Milestone 1 Acceptance Testing by e-Net will consist of:
1. Generate messages to EU Caller ID display device and US Caller ID
display device
Milestone 3 accomplished by Com21 will consist of:
1. Using the AIM provided code from e-Net, verify AIM to Call Agent
Interworking which involves - SGCP Message to AIM generates
message on both EU and US Caller ID displays
8. PRODUCT SUPPORT AND ACCEPTANCE TESTING
The Product Support for the VOIP Software, and Caller ID Generation
will as described in section 7 in the current contract
All other existing contract provisions remain as currently stated and
are unchanged hereby. IN WITNESS WHEREOF, the parties hereto have
executed this Attachment E to be added to the Software Development
Agreement between e-Net and Com21.
Com21, Inc e-Net, Inc
By: /s/ DAVID L. ROBERTSON By: /s/ DONALD J. SHOFF
------------------------ ----------------------
Name: DAVID L. ROBERTSON Name: DONALD J. SHOFF
---------------------- ---------------------
Title: V.P. FINANCE Title: V.P. FINANCE
--------------------- --------------------
EXHIBIT 10.2
E-NET, INC.
1998 STOCK COMPENSATION PLAN
EFFECTIVE AS OF JUNE 30, 1998
E-NET, INC.
1998 STOCK COMPENSATION PLAN
I. THE PLAN
1.1 PURPOSE. The purpose of the e-Net, Inc. 1998 Stock Compensation
Plan is to promote the success of the Corporation and its Subsidiaries by
providing an additional means through the grant of Awards to provide officers
and employees with stock compensation that is comparable with compensation for
employment with other similar companies in order to attract, motivate, retain
and reward officers and employees; to provide incentives for high levels of
individual performance and improved financial performance; to attract, motivate
and retain experienced and knowledgeable independent directors; to attract,
motivate and retain experienced and knowledgeable independent contractors; and
to promote a close identity of interests between directors, officers, employees,
independent contractors and stockholders.
1.2 DEFINITIONS.
The following terms shall have the meanings set forth below:
(1) "AWARD" shall mean an award of any Option authorized under
Section 1.6, that is authorized by and granted under this plan.
(2) "AWARD DATE" shall mean the date upon which the Outside Board
or the Board, as applicable as determined pursuant to Section 1.3,
takes the action granting an Award or such later date as the Outside
Board or the Board designates as the Award Date at the time of
granting the Award.
(3) "AWARD DOCUMENT" shall mean any writing, which may be an
agreement, setting forth the terms of an Award that has been granted
by the Outside Board or the Board.
(4) "AWARD PERIOD" shall mean the period beginning on an Award
Date and ending on the expiration date of such Award.
(5) "BENEFICIARY" shall mean the person or persons designated by
a Participant in writing to the Board to receive the benefits
specified in an Award Document and under this Plan in the event of the
Participant's death, or, if the Participant has not designated such
person or persons, or such person or persons shall all have
predeceased the Participant, the executor or administrator of the
Participant's estate.
(6) "BOARD" shall mean the Board of Directors of the Corporation.
(7) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Any reference herein to a section of the
Code shall include any corresponding future provision of federal tax
law.
(8) "COMMON STOCK" shall mean the common stock of the Corporation
and, in the event such common stock is converted to another security
or property pursuant to Section 3.2, such other security or property.
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(9) "CORPORATION" shall mean e-Net, Inc. and its successors, and,
where the context requires, its Subsidiaries.
(10) "EMPLOYEE" shall mean any employee of the Corporation or a
Subsidiary, including a director who is also an employee.
(11) "ELIGIBLE PARTICIPANT" shall mean any Employee or
Independent Contractor.
(12) "ERISA" shall mean the Employee Retirement Income Security
Act of 1947, as amended.
(13) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended from time to time, and any successor provision.
(14) "FAIR MARKET VALUE" shall have such meaning as determined by
the Outside Board from time to time based upon its reasonable
judgement as indicated by its written approval.
(15) "INDEPENDENT CONTRACTOR" shall mean any individual who
engages in service for hire for the Corporation or a Subsidiary under
a written contract approved by the Board.
(16) "INSIDER" shall mean an officer of the Corporation, a
director of the Corporation, or a beneficial owner of ten percent
(10%) or more of the Corporation's issued and outstanding Common Stock
or other equity security registered pursuant to Section 12 of the
Exchange Act, as defined pursuant to Section 16 of the Exchange Act
and the rules and regulations thereunder.
(17) "NONMANAGEMENT DIRECTOR" shall mean a member of the Board
who is not an officer or employee of the Corporation or a Subsidiary.
(18) "OPTION" shall mean an option to purchase Common Stock
pursuant to an Award.
(19) "OUTSIDE BOARD" shall mean the Outside Directors, as a
group.
(20) "OUTSIDE DIRECTOR" shall mean a member of the Board who is a
Non-management Director and who otherwise falls under the definition
of "Non-Employee Director" in Rule 16b-3.
(21) "PARTICIPANT" shall mean a Nonmanagement Director or an
Eligible Participant who has been granted an Award under this Plan.
(22) "PERSONAL REPRESENTATIVE" shall mean to person or persons
who, upon the incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding, pursuant to a durable
power of attorney or otherwise, the power to exercise the rights or
receive benefits under this Plan and who shall have become the legal
representative of the Participant.
(23) "PLAN" shall mean this e-Net, Inc. 1998 Stock Compensation
Plan.
(24) "PLAN TERMINATION DATE" shall mean the tenth anniversary of
the effective date of the Plan, as determined pursuant to Section 3.7.
(25) "QDRO" shall mean a qualified domestic relations order as
defined in Section 414(p) of the Code or Section 206(d)(3) of ERISA
(to the same extent as if this Plan were subject thereto), or the
applicable rules thereunder.
(26) "RETIREMENT" shall mean, in the case of an Employee,
retirement as defined in the Corporation's Retirement Pension Plan, as
amended from time to time.
(27) "RULE 16B-3" shall mean Rule 16b-3 as promulgated by the
Securities and Exchange Commission pursuant to the Exchange Act.
(28) "SUBSIDIARY" shall mean any subsidiary of the Corporation
which meets the definition of a "subsidiary corporation" set forth in
Section 424(f) of the Code.
(29) "TOTAL DISABILITY" shall mean complete and permanent
inability by reason of illness or accident to perform the duties of
the occupation at which the Participant was employed when the illness
commenced or accident occurred, as determined by
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the Corporation's independent medical consultant, and, in the case of
Eligible Participants who are Insiders, ratified by the Outside Board.
1.3 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) THE OUTSIDE BOARD AND THE BOARD. This Plan shall be administered by,
and all Awards to Eligible Participants shall be authorized by, the Outside
Board in the cases of Eligible Participants who are Insiders and of
Nonmanagement Directors, and the Board in the case of Eligible Participants who
are not Insiders. Action of the Outside Board or the Board with respect to the
administration of this Plan shall be taken pursuant to a majority vote or by
unanimous written consent of the respective members, PROVIDED, HOWEVER, that no
director may participate in a decision to grant an Award to himself or herself.
All references in this Plan to actions or determinations in respect of Awards by
the Outside Board shall be references to Awards granted to Eligible Participants
who are Insiders and to Nonmanagement Directors. All references in this Plan to
action or determinations in respect of Awards by the Board shall be references
to Awards granted to Eligible Participants who are not Insiders. The Outside
Board shall administer this Plan with respect to all Awards held by Eligible
Participants who are Insiders and by Nonmanagement Directors, including Awards
granted prior to the time that any such Eligible Participant becomes an Insider.
(b) PLAN AWARDS; INTERPRETATION; POWERS. Subject to the express provisions
of this Plan, the Outside Board or the Board shall have the authority:
(i) to determine the Eligible Participants and Nonmanagement
Directors who will receive Awards; PROVIDED, HOWEVER, that no director
may participate in a decision to grant an Award to himself or herself;
(ii) to grant Awards to such Eligible Participants and
Nonmanagement Directors, to determine the amount of and the price at
which Common Stock will be offered or awarded thereto, to determine
the other specific terms and conditions of such Awards consistent with
the express limits of this Plan, to establish the installments (if
any) in which such Awards shall become exercisable or shall vest, and
to establish the expiration date and the events of termination of such
Awards; PROVIDED, HOWEVER, no director may participate in a decision
to grant an Award to himself of herself;
(iii) to construe and interpret this Plan and any Award
Documents, to further define the terms used in this Plan, and to
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan;
(iv) to cancel, modify, or waive the Corporation's rights with
respect to, or modify, discontinue, suspend, or terminate any or all
outstanding Awards held by Eligible Participants and Nonmanagement
Directors, subject to any required consents under Section 3.5;
(v) to accelerate or extend the ability to exercise or extend the
term of any or all outstanding Awards (subject to the maximum term of
Awards under Section 1.7); and
(vi) to make all other determinations and take such other actions
as contemplated by this Plan or as may be necessary or advisable for
the administration of this Plan and effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Outside Board, relating or
pursuant to this Plan shall be within the absolute discretion of that entity or
body and shall be conclusive and binding upon all persons. Subject only to
compliance with the express provisions hereof, the Board and the Outside Board
may act in their absolute discretion in matters within their authority related
to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or not
taking any action under this Plan, the Board and the Outside Board may obtain
and may rely upon the advice of experts, including professional advisors to the
Corporation.
(e) DELEGATION. The Board may delegate some or all of its authority under
the Plan to one or more members of the Board. The Outside Board and the Board
may delegate ministerial, non-discretionary functions to individuals who are
officers or employees of the Corporation.
(f) NO LIABILITY. No member of the Board, or director, officer or employee
of the Corporation or any Subsidiary, shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such person so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.
(g) INDEMNIFICATION. To the extent permitted by law, each of the members of
the Board, and each of the directors, officers and employees of the Corporation
and any Subsidiary, shall be held harmless and be indemnified by the Corporation
for any liability, loss
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(including amounts paid in settlement), damages or expenses (including
reasonable attorneys' fees) suffered by virtue of any determinations, acts or
failures to act, or alleged acts or failures to act, in connection with the
administration of this Plan so long as such person is not determined by a final
adjudication to be guilty of willful misconduct with respect to such
determination, action or failure to act.
1.4 PARTICIPATION. Awards may be granted by the Outside Board or the Board
only to Eligible Participants or to Nonmanagement Directors; PROVIDED HOWEVER,
that no director may participate in a decision to grant an Award to himself or
herself. An Eligible Participant or Nonmanagement Director who has been granted
an Award may, if otherwise eligible, be granted additional Awards if the Outside
Board or the Board shall so determine.
1.5 SHARES AVAILABLE FOR AWARDS.
(a) COMMON STOCK. Subject to the provisions of Section 3.2, the Common
Stock that may be delivered under this Plan shall be shares of the Corporation's
authorized but unissued Common Stock, any shares of Common Stock held as
treasury shares, and shares of Common Stock purchased by the Corporation on the
open market.
(b) NUMBER OF SHARES. Subject to adjustments in accordance with Section
3.2, the maximum number of shares of Common Stock that may be delivered pursuant
to Awards granted to Eligible Participants and Nonmanagement Directors under
this Plan shall not exceed one million (1,000,000) shares.
(c) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. A good faith
estimate of the number of shares of Common Stock subject to outstanding Awards
that will be satisfied by delivery of shares of Common Stock, plus the number of
shares of Common Stock referenced for purposes of determining other Awards,
shall be reserved from the number of shares of Common Stock available for Awards
under this Plan. The aggregate number of shares of Common Stock delivered under
this Plan plus the number of shares referenced with respect to Awards paid in
cash shall reduce the number of shares of Common Stock remaining available. If
any Award shall expire or be canceled or terminated without having been
exercised in full, or any Common Stock subject to an Award shall not vest or be
delivered, the unpurchased, nonvested or undelivered shares of Common Stock
subject thereto or the shares of Common Stock referenced with respect thereto
shall again be available under this Plan; PROVIDED, HOWEVER, that no such
unpurchased, nonvested or undelivered shares shall again be available if the
holder received dividends with respect to such shares or any other benefits of
ownership of such shares, other than voting rights or the accumulation of
dividends that are never paid to the holder. If the Corporation withholds shares
of Common Stock pursuant to Section 3.4, the number of shares that would have
been deliverable with respect to an Award but that are withheld pursuant to the
provisions of Section 3.4 shall be treated as issued and the aggregate number of
shares issuable with respect to the applicable Award and under this Plan shall
be reduced by the number of shares so withheld and such shares shall not be
available for additional Awards.
1.6 GRANT OF AWARDS. Subject to the express provisions of this Plan, the
Outside Board or the Board shall determine the number of shares of Common Stock
subject to each Award, the price (if any) to be paid for the shares or the Award
and other terms and conditions of the Award. Each Award to an Eligible
Participant or a Nonmanagement Director shall be evidenced by an Award Document
signed by the Corporation and, if required by the Outside Board or the Board, by
the Eligible Participant or Nonmanagement Director.
1.7 AWARD PERIOD. Each Award and all executory rights or obligations under
the related Award Document shall expire on such date (if any) as shall be
determined by the Outside Board or the Board, but in the case of Options or
other rights to acquire Common Stock, not later than ten (10) years after the
Award Date.
1.8 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. An Award shall be exercisable or shall vest as
determined by the Outside Board or the Board.
(b) PROCEDURE. Any exercisable Award shall be exercised when the person
appointed by the Outside Board or the Board receives written notice of such
exercise from the Participant, together with satisfactory arrangements for any
required payment to be made in accordance with Sections 2.2. or 3.4 or the terms
of the Award Document, as the case may be.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall be
disregarded, but may be accumulated. However, the Outside Board or the Board may
determine that cash will be paid or transferred in lieu of any fractional share
interests.
(d) HOLDING PERIOD. Notwithstanding any provision of this Plan to the
contrary, except in the case of sales by an executor or administrator of the
estate of a deceased Participant, shares of Common Stock acquired by an Insider
through the exercise of an Award granted hereunder may not be sold until a date
six (6) months after the date of the grant of such Award as specified in the
Award Document.
1.9 ACCEPTANCE OF NOTES TO FINANCE EXERCISE. Where the Outside Board or the
Board deems it appropriate under the circumstances as indicated by its written
approval, the Corporation may accept one or more notes from any Participant in
connection with the exercise or
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receipt of any outstanding Award or the payment of the amount of any taxes that
the Corporation may be required to withhold with respect to such exercise or
receipt; PROVIDED, HOWEVER, that any such note shall be subject to the following
terms and conditions:
(1) The principal of the note shall not exceed the amount
required to be paid to the Corporation upon the exercise or receipt of
one or more Awards under the Plan, including the amount of any taxes
required to be withheld, and the note shall be delivered directly to
the Corporation in consideration of such exercise or receipt.
(2) The initial term of the note shall be determined by the
Outside Board or the Board; PROVIDED, HOWEVER, that the term of the
note, including extensions, shall not exceed ten (10) years.
(3) The note shall provide for full recourse of the
Participant, including a right of set-off against amounts otherwise
payable by the Corporation to the Participant, and shall bear interest
at a rate determined by the Outside Board or the Board, but not less
than the applicable federal rate determined under Section 1274.
(4) If the employment of the Participant terminates, the
unpaid principal balance of the note shall become due and payable on
the tenth business day after such termination.
(5) If required by the Outside Board or the Board or by
applicable law, the note shall be secured by a pledge of any shares or
rights financed thereby in compliance with applicable law.
(6) The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform
with applicable rules and regulations of the Federal Reserve Board as
then in effect.
1.10 NO TRANSFERABILITY. Awards may be exercised only by the
Participant or the Participant's Personal Representative, if any, or, if the
Participant has died, the Participant's Beneficiary. Amounts payable or shares
of Common Stock issuable pursuant to an Award shall be paid to (or registered in
the name of) such person or persons as specified by the person exercising the
Award. Other than by will or the laws of descent and distribution or pursuant to
a QDRO or other exception to transfer restrictions under Rule 16b-3, no right or
benefit under this Plan or any Award, including, without limitation, any Option
that has not vested, shall be transferable by the Participant or shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge (other than to the Corporation), and any such
attempted action shall be void. The Corporation shall disregard any attempt at
transfer, assignment or other alienation prohibited by the preceding sentences
and shall pay or deliver such cash or shares of Common Stock in accordance with
the provisions of this Plan. The designation of a Beneficiary hereunder shall
not constitute a transfer for these purposes.
1.11 SECTION 83(B) ELECTIONS. If a Participant shall file an election
with the Internal Revenue Service to include the value of any Award in the
Participant's gross income while such Award remains subject to restrictions, the
Participant shall promptly furnish the Corporation with a copy of such election.
II. OPTIONS
2.1 GRANTS. One or more Options may be granted under this Article to any
Eligible Participant or Nonmanagement Director.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The exercise price for shares of Common Stock
covered by Options shall be determined by the Outside Board or the Board at the
time of the Award.
(b) PAYMENT PROVISIONS. The exercise price for any shares of Common
Stock purchased on exercise of an Option granted under this Article shall be
paid in full at the time of each purchase in one or a combination of the
following methods: (i) in cash or by electronic funds transfer; (ii) by good
check payable to the order of the Corporation; (iii) by the delivery of shares
of Common Stock already owned by the Participant; or (iv) if authorized by the
Outside Board or the Board or specified in the applicable Award Document, by a
promissory note of the Participant consistent with the requirements of Section
1.9; PROVIDED, HOWEVER, that the Outside Board or the Board may, in its absolute
discretion, limit the Participant's ability to exercise an Option by delivering
shares of Common Stock, including by imposing a requirement that the Participant
satisfy a minimum holding period with respect to the shares so delivered. Shares
of Common Stock used to satisfy the exercise price of an Option shall be valued
at their Fair Market Value on the date of exercise.
2.3 NOT INCENTIVE STOCK OPTIONS. It is not intended that any Option
granted under this Plan shall constitute an incentive stock option as defined in
Section 422 of the Code.
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2.4. OPTION PERIOD.
(a) AWARD PERIOD. Each Option shall specify the Award Period for which
the Option is granted and shall provide that the Option shall expire at the end
of such Award Period. The Outside Board or the Board may extend the Award Period
by amendment of an Option. Notwithstanding the foregoing, the Award Period with
respect to an Option, including all extensions, shall not exceed ten (10) years.
(b) EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE. Notwithstanding the
provisions of Section 2.4(a), unless otherwise provided by the Outside Board or
the Board, an Option shall expire on the earliest to occur of (i) the end of the
Award Period, (ii) if the Participant is an Employee or Nonmanagement Director,
the date three (3) months following the Participant's termination of employment
or service for the Corporation for any reason other than Retirement, Total
Disability or death, (iii) if the Participant is an Employee or Nonmanagement
Director, the date twelve (12) months following the Participant's termination of
employment or service for the Corporation by reason of Retirement, Total
Disability or death, (iv) if the Participant is an Independent Contractor, the
date three (3) months following the termination of the Participant's contract
with the Corporation, and (v) the date of termination of the Option pursuant to
Section 3.14.
2.5. VESTING; FORFEITURE.
(a) An Option shall be exercisable or shall vest upon such terms and
conditions or pursuant to such schedule as the Outside Board or the Board shall
determine at the time of the Award. Notwithstanding the foregoing, unless
otherwise specified by the Outside Board or the Board, an Option shall become
immediately exercisable and fully vested upon the termination of the
Participant's employment by, service for or contract with the Corporation by
reason of Retirement, Total Disability or death. Unless otherwise specified by
the Outside Board or the Board, an Option that is not vested upon the
termination of the Participant's employment by, service for or contract with the
Corporation shall be forfeited.
(b) Notwithstanding the provisions of Section 2.5(a), an Option shall
become immediately exercisable and fully vested in the event of (i) a merger,
consolidation or reorganization to which the Corporation is a party other than
as the surviving entity, unless the surviving entity shall elect to continue the
Plan in its existing form and abide by the terms of all Awards granted
thereunder, (ii) a merger, consolidation or reorganization to which the
Corporation is a party as the surviving entity, other than any such merger,
consolidation or reorganization resulting in a change of ownership of less than
fifty percent (50%) of the then outstanding Common Stock; (iii) any transaction
or series of related transactions resulting in the acquisition of a majority of
the outstanding shares of Common Stock; (iv) any transfer of all or
substantially all of the assets of the Corporation; or (v) the liquidation or
dissolution of the Corporation. In such event, the Corporation may, but shall
not be required to, give the Participant prior written notice of the
effectiveness of any such event, and the Participant may exercise the Option (to
the extent it is still in effect) on or prior to the last day specified by the
Corporation; to the extent that the Option has not been exercised, it will
expire at 5:00 P.M.
on the last day specified in such notice by the Corporation.
2.6 OPTION REPRICING, CANCELLATION, SUBSTITUTION OR WAIVER OF
RESTRICTIONS. Subject to Sections 1.5 and 3.5 and the specific limitations on
Awards contained in this Plan, the Outside Board or the Board from time to time
may authorize, generally or in specific cases only, for the benefit of any
Participant who is an Employee or an Independent Contractor, any adjustment in
the exercise or purchase price, the vesting schedule, the number of shares
subject to, the restrictions upon or the term of, an Award granted under this
Article by cancellation of an outstanding Award and a subsequent granting of an
Award, by amendment, by substitution of an outstanding Award, by waiver or by
other legally valid means. Such amendment or other action may result, among
other changes, in an exercise or purchase price that is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
III. OTHER PROVISIONS
3.1 RIGHTS OF ELIGIBLE PARTICIPANTS, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status of an Eligible Participant or a
Nonmanagement Director shall not be construed as a commitment that any Award
will be made under this Plan to an Eligible Participant or a Nonmanagement
Director or to Eligible Participants or Nonmanagement Directors generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) shall confer upon any
Participant any right to continue in the employ or other service of the
Corporation or constitute any contract or agreement of employment or other
service, nor shall this Plan interfere in any way with the right of the
Corporation to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause; PROVIDED,
HOWEVER, that nothing contained in this Plan or any document related hereto
shall adversely affect any independent contractual right of any Participant
without his or her consent.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be payable in
shares of Common Stock or from the general assets of the Corporation, and
(except as provided in Section 1.5(c)) no special or separate reserve, fund or
deposit shall be made to assure payment of such
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Awards. No Participant, beneficiary or other person shall have any right, title
or interest in any fund or in any specific asset (including share of Common
Stock, except as expressly otherwise provided) of the corporation by reason of
any Award hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to create,
a trust of any kind or a fiduciary relationship between the Corporation and any
Participant, Beneficiary or other person. To the extent that a Participant,
Beneficiary or other person acquires right to receive payment pursuant to any
Award hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Corporation.
3.2 ADJUSTMENTS.
(a) EVENTS REQUIRING ADJUSTMENTS. If any of the following events occur,
the Outside Board or the Board shall make the adjustments described in Section
3.2(b): (i) any extraordinary dividend or other extraordinary distribution in
respect of the Common Stock (whether in the form of cash, Common Stock, other
securities, or other property), (ii) any recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the
Corporation, (iii) any issuance of warrants or other rights to purchase shares
of Common Stock or other securities of the Corporation (other than to employees)
at less than eighty percent (80%) of fair value on the date of such issuance, or
(iv) any other like corporate transaction or event in respect of the Common
Stock or a sale of substantially all the assets of the Corporation.
(b) ADJUSTMENTS TO AWARDS. If any of the events described in Section
3.2(a) occurs, then the Outside Board or the Board shall, in such manner and to
such extent (if any) as it deems appropriate and equitable, (i) proportionately
adjust any or all of (1) the number and type of shares of Common Stock that
thereafter may be made the subject of Awards (including the specific maximum set
forth in Section 1.5), (2) the number, amount and type of shares of Common Stock
subject to any or all outstanding Awards, (3) the grant, purchase, or exercise
price of any or all outstanding Awards, (4) the Common Stock or cash deliverable
upon exercise of any or all outstanding Awards, or (5) the performance standards
appropriate to any or all outstanding Awards; or (ii) make provision for a cash
payment or for the substitution or exchange of any or all outstanding Awards
based upon the distribution or consideration payable to holders of Common Stock
upon or in respect of the event.
3.3 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of Awards
under this Plan and the issuance and delivery of shares of Common Stock and the
payment of money under this Plan or under Awards granted hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Corporation, provide such assurances and
representations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements.
3.4 TAX WITHHOLDING. Upon any exercise, vesting, or payment of any Award,
the Outside Board or the Board may make such provisions and take such steps as
it may deem necessary or appropriate for the withholding by the Corporation of
all federal, state, local and other taxes required by law to be withheld,
including without limitation, the right, at its option, (i) to require the
Participant (or Personal Representative or Beneficiary, as the case may be) to
pay or provide for payment of the amount of any taxes that the Corporation may
be required to withhold with respect to such transaction as a condition to the
release of Common Stock or the making of any payment or distribution, (ii) to
deduct from any amount payable in cash, (iii) to reduce the number of shares of
Common Stock otherwise deliverable (or otherwise reacquire such shares), based
upon their Fair Market Value on the date of delivery, or to grant the
Participant the right to elect such reduction in the number of shares upon such
terms and conditions as it may establish, or (iv) to permit the Corporation to
accept a note for the amount of any taxes that the Corporation may be required
to withhold with respect to such transaction in accordance with Section 1.9.
3.5 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD AUTHORIZATION. Subject to this Section 3.5, the Board may, at
any time, terminate or, from time to time, amend, modify or suspend this Plan,
in whole or in part. No Awards may be granted during any suspension of this Plan
or after termination of this Plan, but the Outside Board or the Board shall
retain jurisdiction as to Awards then outstanding in accordance with the terms
of this Plan.
(b) STOCKHOLDER APPROVAL. If any amendment would (i) materially
increase the benefits accruing under this Plan, (ii) materially increase the
aggregate number of shares of Common Stock that may be issued under this Plan
(except as provided in Section 3.2), or (iii) materially modify the requirements
as to eligibility for participation in the Plan, such amendment shall be subject
to stockholder approval.
(c) AMENDMENTS TO AWARDS. Without limiting any other express authority
granted under this Plan, but subject to its express limits, the Outside Board or
the Board by agreement or resolution may waive conditions of or limitations on
Awards to Eligible Participants or Nonmanagement Directors that the Outside
Board or the Board in the prior exercise of its discretion has imposed, without
the consent of the Participant, and may make other changes to the terms and
conditions of Awards that do not affect the Participant's rights and benefits
under an Award in any materially adverse manner.
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(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of the Plan or any change affecting any outstanding
Award shall, without the written consent of the Participant, Beneficiary or
Personal Representative, as applicable, affect in any manner materially adverse
to such person any rights or benefits of any such person or any obligations of
the Corporation under any Award granted under this Plan prior to the effective
date of such change; however, any changes made pursuant to Section 3.2 shall not
be deemed to constitute changes or amendments for purposes of this Section 3.5.
3.6 PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise expressly
authorized by the Outside Board or the Board or this Plan and expressly stated
in an Award Document, a Participant shall not be entitled to any privilege of
stock ownership as to any shares of Common Stock not actually delivered to and
held of record by the Participant. No adjustment shall be made for dividends or
other stockholder rights for which a record date is prior to the date of
delivery of such shares.
3.7 EFFECTIVE DATE OF THE PLAN. This Plan shall be effective as of the
date the Plan is approved by the Board, subject to approval by a vote of the
holders of a majority of the outstanding shares of Common Stock at a meeting of
stockholders of the Corporation held within twelve (12) months before or after
the date the Plan is approved by the Board. Awards may be granted hereunder on
or after the effective date and prior to the termination of the Plan.
3.8 TERM OF THE PLAN. No Award shall be granted after the Plan
Termination Date. Unless otherwise expressly provided in this Plan or in an
applicable Award Document, any Award may extend beyond such date, and all
authority of the Outside Board or the Board with respect to Awards hereunder
shall continue during any suspension of this Plan and in respect of Awards
outstanding on the Plan Termination Date.
3.9 GOVERNING LAW/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards, and all other related documents shall be governed by, and construed in
accordance with the laws of the State of Delaware, without reference to any
otherwise applicable principles of conflicts of law.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be valid and unenforceable, the remaining provisions
of this Plan shall continue in effect.
3.10 CAPTIONS. Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
3.11 EFFECT OF CHANGE OF SUBSIDIARY STATUS. For purposes of this Plan
and any Award hereunder, if any entity ceases to be a Subsidiary, the
employment, service or contract of all Participants who are employed by, in the
service of or under contract with such entity shall be deemed to have
terminated, except any such Participant who continues as an employee, servant or
contractor of the Corporation or another Subsidiary.
3.12 NONEXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be
deemed to limit the authority of the Board to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any
other plan or authority.
3.13 PLAN BINDING ON SUCCESSORS. The obligations of the corporation
under the Plan shall be binding upon any successor corporation or organization
resulting from the merger, consolidation or other reorganization of the
corporation, or upon any successor corporation or organization succeeding to
substantially all of the assets and business of the Corporation. The Corporation
agrees that it will make appropriate provisions for the preservation of all
Participants' rights under the Plan in any agreement or plan that it may enter
into or adopt to effect any such merger, consolidation, reorganization or
transfer of assets.
3.14 COMPETITION BY PARTICIPANTS.
(a) In the event that the Outside Board or the Board determines that a
Participant, within such period of time as shall be specified in the related
Award Document, directly or indirectly, individually or as an employee, partner,
officer, director, or stockholder or in any other capacity whatsoever of any
person, firm, partnership or corporation: (i) recruits, hires, assists others in
recruiting or hiring, discusses employment with or refers to others any person
who is, or within the preceding twelve (12) months was, an employee of the
Corporation or any Subsidiary or any prospective or former Subsidiary; (ii)
competes with the Corporation or any Subsidiary in such segments of the business
of the Corporation and within such territory as shall be specified in such
related Award Documents; (iii) uses in competition with the Corporation or any
Subsidiary, customer, prospective customer or former customer, within such
segments and specified territory, any of the
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methods, information or systems developed by the Corporation or any Subsidiary
for its customers, prospective customers or former customers where the
Corporation or Subsidiary or such customer, prospective customer or former
customer does business; or (iv) calls upon, solicits, accepts employment with,
sells or endeavors to sell to, within such segments and specified territory, any
customer, prospective customer or former customer of the Corporations or any
Subsidiary; the following provision shall apply with respect to any shares of
Common Stock received and Awards granted under this Plans as of the date of the
first occurrence prohibited under this provision:
(i) Such Participant: (x) shall immediately sell and deliver
to the Corporation, upon demand, all shares of Common Stock sold or
awarded to the Participant under the Plan as to which the Participant
is still the direct or indirect beneficial owner at the cash price per
share, if any, paid by the Participant; and (y) shall pay to the
Corporation an amount in cash with respect to each share of Common
Stock not still so held equal to the Fair Market Value of each such
share on the first date on which such share is no longer held less the
price paid by the Participant for such share.
(ii) Any Award outstanding under the Plan shall automatically
terminate and shall no longer be exercisable and all Shares of
Restricted Stock then held shall automatically terminate.
(b) The provisions of this Section 3.14 shall not limit or restrict in
any manner any rights or remedies which the Corporation and its Subsidiaries may
have under any separate employment agreement with a Participant and or otherwise
with respect to competition by a Participant.
(c) If any provisions of this Section 3.14 should be found by any court
of competent jurisdiction to be unreasonable by reason of being too broad as to
the period of time, territory, aspects of business or customers covered or
otherwise, then and in that event, such provision shall nevertheless remain
valid and fully effective, but shall be considered to be amended so that the
period of time, territory, aspects of business or customers covered or otherwise
set forth shall be changed to be the maximum period of time, the largest
territory, the most aspects of business and customers covered and/or the
broadest other limitations, as the case may be, which would be found reasonable
and enforceable by such court, and similarly, if any remedy is so found to be
unenforceable in whole or in part, or to any extent, such provision shall remain
in effect only to the extent the remedies would be enforceable by such court.