EXHIBIT-10.1
STARMEDIA NETWORK, INC.
1997 STOCK OPTION PLAN
ARTICLE 1
Establishment and Purpose
Section 1.1. Establishment. Effective January 1, 1997 and subject to
the provisions of Article 10 hereof, StarMedia Network, Inc. (the "Company")
hereby establishes a stock option plan for the benefit of certain employees and
non-employee directors as described herein which shall be known as the StarMedia
Network, Inc. 1997 Stock Option Plan (the "Plan"). The Plan is intended to
provide for the grant of stock options which do not qualify as incentive stock
options under Section 422 of the Code (as defined in Section 2.3).
Section 1.2. Purpose. The purpose of the Plan is to promote the
interests of the company and its shareholders by ensuring continuity of
management and increased incentive on the part of officers, other key employees
and non-employee directors of the Company and its Affiliates, through
facilitating their acquisition of equity interests in the Company.
ARTICLE 2
Definitions
For purposes of the Plan, the following terms shall have the
meanings provided herein:
Section 2.1. "Affiliate" means any company which qualifies as a
"subsidiary corporation" of the Company under Section 424(f) of the Code or, if
applicable, as a "parent corporation" of the Company under Section 424(e) of the
Code.
Section 2.2. "Board" means the Board of Directors of the Company.
Section 2.3. "Code" means the Internal Revenue Code of 1986, as
amended.
Section 2.4. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code.
Section 2.5. "Employee" shall mean any active, full-time employee
or active, regular part-time employee of the Company or an Affiliate who
regularly works, or is anticipated to regularly work, at least 1,000 hours in a
twelve (12) consecutive month period.
Section 2.6. "Exercise Price" means the price per Share at which
each Option granted under the Plan can be exercised.
Section 2.7. "Fair Market Value" means, with respect to Shares on
any date, the average of the high and low sales prices of the Shares on such
date on the principal national securities exchange on which such Shares are
listed or admitted to trading, or if such Shares are not so listed or admitted
to trading, the arithmetic mean of the per Share closing bid price and per Share
closing asked price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System or such other market or medium in
which such prices are regularly quoted, or, if there have been no published bid
or asked quotations with respect to Shares on such date, the Fair Market Value
shall be the value established by the Board in good faith.
Section 2.8. "Grantee" shall mean any person to whom an Option has
been granted.
Section 2.9. "Non-Employee Director" means a member of the Board of
the Company who is not also an Employee of the Company or any Affiliate.
Section 2.10. "Option" means an option granted under the Plan to
purchase Shares.
Section 2.11. "Shares" means shares of the Company's common stock,
$.001. par value.
ARTICLE 3
Administration
Section 3.1. Plan Administrator. The Plan shall be administered by
the Chief Executive Officer of the Company; provided, however, that the Chief
Executive Officer, in his discretion, may delegate any of his or her authorities
or duties under the Plan to one or more other senior officers of the Company,
under such conditions and subject to such limitations as the Chief Executive
Officer may establish. The Chief Executive Officer or such other person or
persons exercising administrative authorities with respect to the Plan shall be
the Plan Administrator.
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Section 3.2. Authorities and Duties. Subject to the terms,
conditions and limitations set forth in the Plan, the Plan Administrator shall
have authority to (a) approve the selection of Employees and Non-Employee
Directors to receive Options and the terms and conditions applicable to such
Options, including, without limitation, the number of Shares, Exercise Price,
vesting terms and duration of such Options; (b) waive or amend the terms,
conditions, restrictions or limitations applicable to any outstanding Options,
including acceleration or extension of the exercisability of any outstanding
Options; (c) interpret the Plan; (d) prescribe, amend and rescind rules and
regulations for the operation and administration of the Plan; and (e) take any
and all other action it deems necessary or advisable for the proper operation or
administration of the Plan. All determinations of the Plan Administrator shall
be final, binding and conclusive. No Plan Administrator shall be liable for any
action, interpretation or construction made in good faith with respect to the
Plan or any Option granted thereunder.
ARTICLE 4
Eligibility and Participation
Subject to the approval of the Plan Administrator, Options may be
granted only to officers, other key Employees and Non-Employee Directors of the
Company and its Affiliates. The Plan Administrator shall determine the persons
to whom Options are to be granted, the number of Shares subject to each Option,
the period during which the Option can be exercised, the Exercise Price of the
Option, and any other terms applicable to the Options or the Shares, which
determinations shall take into consideration the person's present and potential
contribution to the success of the Company and such other factors as the Plan
Administrator may deem proper and relevant.
ARTICLE 5
Shares Subject to Plan
Section 5.1. Amount of Stock. There may be issued under the Plan an
aggregate of 2,000,000 Shares, subject to adjustment as provided in Section 5.2.
In the event that Options shall terminate or expire without being exercised in
whole or in part, new Options may be granted covering the Shares not purchased
under such lapsed Options.
Section 5.2. Dilution and Other Adjustments. (a) Subject to any
required action by stockholders, the aggregate number of Shares issuable under
the Plan, and the Exercise Price and/or the number of Shares issuable under any
Stock Option,
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shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a subdivision or consolidation of Shares or the
payment of a stock dividend on Shares other than a stock dividend that is a
substitute for a cash dividend, or any other increase in the number of Shares
effected without receipt of consideration by the Company; provided that no such
adjustment in Exercise Price may reduce the Exercise Price to an amount per
Share which is less than the par value of such Share.
(b) Subject to any required action by stockholders, in the event of
the dissolution or liquidation of the Company, a merger or consolidation in
which the Company is not the surviving corporation, or a merger or consolidation
in which the Company is the surviving corporation but the holders of Shares
receive securities of another corporation:
(i) any Option granted hereunder shall pertain to and apply to the
securities, cash or other property (subject to adjustment by cash payment
in lieu of fractional interests) to which a holder of the number of Shares
equal to the number of Shares the Grantee would have been entitled; and
(ii) the Plan Administrator shall, in his discretion, have the
power, prior to such event, (A) to cancel any or all Options which are
then exercisable and, in consideration of such cancellation, pay to each
Grantee an amount in cash with respect to each Share as to which an Option
is then exercisable equal to the difference between the value per Share of
the consideration, as determined by the Plan Administrator, received by
holders of Shares as a result of such dissolution, liquidation, merger or
consolidation and the Exercise Price, and to terminate without
consideration all Options not then exercisable; or (B) if the holders of
Shares receive property other than cash as a result of such dissolution,
liquidation, merger or consolidation, to provide for the exchange of an
Option which is then exercisable for an Option on some or all of such
property and, incident thereto, make an equitable adjustment, as
determined by the Plan Administrator, in the Exercise Price of each
affected Option, the number of Shares or other property subject to the
Option and, if appropriate, provide for a cash payment to the Grantees in
partial consideration for the exchange for their Option and to terminate
without consideration all Options not then exercisable. The foregoing
adjustment shall be made by the Plan Administrator, whose determination in
that respect shall be final, binding and conclusive.
(c) Except as provided herein, the Grantee shall have no rights by
reason of any subdivision or consolidation of shares
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of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class, any dissolution,
liquidation, merger, consolidation or change in control or any issue by the
company of shares of stock of any class, or securities convertible into shares
of stock of any class and no adjustment by reason thereof shall be made with
respect to the Exercise Price or number of Shares subject to an Option.
ARTICLE 6
Terms and Conditions of Options
Section 6.1. Terms of Options. An Option granted under the Plan
shall be in such form as the Plan Administrator may approve. Each Option shall
be subject to the terms and conditions provided in this Article 6 and shall
contain such additional terms and conditions as the Plan Administrator may deem
desirable, but in no event shall such terms and conditions be inconsistent with
the Plan.
Section 6.2. Option Price. The Exercise Price under an Option shall
be established by the Plan Administrator; provided, however, that in no event
shall the Exercise Price under an Option be less than 100% of the Fair Market
Value of a Share as of the grant date of the Option.
Section 6.3. Option Period. The period during which an Option may be
exercised shall be fixed by the Plan Administrator; provided, however, that no
Option shall be exercisable after the expiration of ten years from the date such
Option is granted.
Section 6.4. Vesting of Options. Options shall become exercisable in
accordance with the following schedule, based on the Grantee's years of service
with the Company following the date of grant; provided, however, that following
the first year of service with the Company after the date of grant, a
proportional amount of the Option shall become exercisable on a quarterly basis:
Years of Service
Completed After Grant % of Option Exercisable
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1 33%
2 66%
3 100%
All Options granted to a Grantee and not yet exercised shall become fully
exercisable upon the occurrence of the Grantee's retirement on or after
attainment of age 62, death or Disability
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within the limitations described in Sections 6.7(a), 6.8 and 6.9, respectively.
Notwithstanding the foregoing provisions of this Section 6.4, the Plan
Administrator shall have the authority to prescribe a more accelerated or a more
restrictive vesting schedule (including the authority to impose additional
conditions that must be met prior to vesting and exercisability) with respect to
a particular Option or group of Options, at any time and in his sole discretion.
Section 6.5. Exercise of Option. (a) Except as provided in Sections
6.7, 6.8 and 6.9, the Grantee must be either (i) in the employ of the Company or
an Affiliate, or (ii) a Non-Employee Director, at the time the Option is
exercised. A Grantee shall be deemed to be in the employ of the Company or an
Affiliate during any period of military, sick leave or other leave of absence
meeting the requirements of Section 1.421-7(h)(2) of the Federal Income Tax
Regulations, or similar or successor section.
(b) An Option may be exercised in whole or in part from time to time
during the Option period (or, if determined by the Plan Administrator, in
specified installments during the Option period) by giving written notice of
exercise to the Secretary of the Company specifying the number of Shares to be
purchased. Notice of exercise of an Option must be accompanied by payment in
full of the purchase price. Subject to the consent of the Plan Administrator
(and subject to any restrictions imposed by the Plan Administrator on the use of
any particular payment method), a Grantee may pay all or part of the purchase
price either (i) by cash or check, (ii) by using previously acquired Shares, or
(iii) by a combination of any of the foregoing methods. The value of previously
acquired Shares and withheld Shares for this purpose shall be the Fair Market
Value of such Shares on the date of exercise of the Option.
(c) No Shares shall be issued in connection with the exercise of an
Option until full payment therefor has been made. A Grantee shall have the
rights of a shareholder only with respect to Shares for which certificates have
been issued to such Grantee.
(d) As a condition to the issuance of Shares in respect of an Option
exercise, the Plan Administrator may require an Employee to execute an agreement
giving effect to any terms, conditions and restrictions applicable to such
Shares.
Section 6.6. Nontransferability of Options. No Option granted under
the Plan shall be transferable by the Grantee otherwise than by will or by the
laws of descent and distribution, and such Option shall be exercisable, during
such person's lifetime, only by such person.
Section 6.7. Retirement and Termination of Employment. (a) If a
Grantee retires from the Company and its Affiliates or
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resigns as a Non-Employee Director, as the case may be, on or after the date he
or she attains age 62, or upon such other retirement or resignation, as the case
may be, as may be approved by the Plan Administrator, then except as set forth
in the following sentence the Options granted to such person shall be
exercisable by such person to the extent provided in the Option Agreement during
the twelve-month period immediately following such person's retirement or
resignation, as the case may be. Notwithstanding the foregoing, the Plan
Administrator may, in his sole discretion and at any time, provide that the
Option may be exercisable during a period of up to 5 years following the date of
such retirement or resignation, but in no event beyond the Option period
provided in the Option agreement pursuant to Section 6.3.
(b) If a Grantee's employment with the Company or an Affiliate, or
service on the Board, as the case may be, terminates for any reason other than
death, Disability or retirement, the Option granted to such person shall, except
as otherwise provided by the Plan Administrator, expire on the date six months
following the date of such termination of employment or service on the Board, as
the case may be.
Section 6.8. Death of a Grantee. In the event of the death of a
Grantee while in the employ of the Company or an Affiliate or serving on the
Board, as the case may be, or during the twelve-month period referred to in
Section 6.9, the Option granted to such person shall be exercisable by the
executors, administrators, legatees or distributees of such person's estate, as
the case may be. In such case, the Option shall be exercisable, unless otherwise
provided in the Option agreement, for the total number of Shares remaining
unexercised under the Option. The period during which such Option may be
exercised shall end on the earlier of the date one year from the Grantee's death
or expiration of the option period provided in the Option agreement pursuant to
Section 6.3. In the event an Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased Grantee,
the Company shall be under no obligation to issue Shares thereunder unless and
until the Company is satisfied that the person or persons exercising the Option
are the duly appointed legal representatives of the deceased Grantee's estate or
the proper legatees or distributees thereof.
Section 6.9. Disability of a Grantee. In the event of the
termination of the employment or service on the Board, as the case may be, of a
Grantee due to Disability, the Options granted to such person shall be
exercisable by such person to the extent provided in the Option Agreement during
the twelve-month period immediately following such termination of such person's
employment or service on the Board, as the case may be.
Section 6.10. Withholding Obligations. As a condition to the
delivery of any Shares pursuant to the exercise of an Option, the Plan
Administrator may require that the Grantee, at
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the time of such exercise, pay to the Company an amount sufficient to satisfy
any applicable tax withholding obligations. Subject to the Consent of the Plan
Administrator (and subject to any restrictions imposed by the Plan Administrator
on the use of any particular payment method), a Grantee may pay all or part of
such withholding taxes either (i) by cash or check, (ii) by using previously
acquired Shares, or (iii) by a combination of any of the foregoing methods. The
value of previously acquired Shares and withheld Shares for this purpose shall
be the Fair Market Value of such Shares on the date of exercise of the Option.
ARTICLE 7
Miscellaneous Provisions
Section 7.1. No Implied Rights. No Employee, Non-Employee Director
or other person shall have any claim or right to be granted an Option under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any Employee any right to be retained in the employ of the Company or any
Affiliate or affect any right of the Company or any Affiliate to terminate any
Employee's employment.
Section 7.2. Securities Law Compliance. No Shares shall be issued
hereunder unless counsel for the Company shall be satisfied that such issuance
will be in compliance with applicable Federal and state securities laws.
Section 7.3. Ratification or Actions. By accepting any Option or
other benefit under the Plan, each Employee and each person claiming under or
through such person shall be conclusively deemed to have indicated such person's
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Plan Administrator or the Board.
Section 7.4. Gender. The masculine pronoun means the feminine and
the singular means the plural wherever appropriate.
ARTICLE 8
Amendments or Discontinuance
The Plan may be amended at any time and from time to time by the
Board and without the approval of shareholders of the Company. No amendment of
the Plan shall adversely affect any right of any Grantee with respect to any
Option theretofore granted without such Grantee's written consent.
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ARTICLE 9
Termination
The Plan shall terminate upon the earlier of the following dates or
events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) December 31, 1999
No termination of the Plan shall alter or impair any of the rights
or obligations of any person, without such person's consent, under any Option
theretofore granted under the Plan.
ARTICLE 10
Board Approval and Adoption
The Plan shall be submitted for approval to the Board. Options may
be granted hereunder prior to such approval but contingent upon such approval.
ARTICLE 12
Governing Law and Interpretation
The provisions of the Plan shall take precedence over any
conflicting provision contained in an Option. The Plan shall be governed by and
construed in accordance with the internal substantive laws, and not the choice
of law rules, of the State of Delaware. If any term or provision of the Plan is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms and provisions will remain in full force and effect
and will in no way be affected, impaired or invalidated.
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