KNOWLEDGEMAX, INC.
2000 EQUITY INCENTIVE PLAN
Adopted: June 14, 2000
Approved By Stockholders June 14, 2000
Termination Date: June 13, 2010
1. PURPOSES.
(a) Eligible Stock Award Recipients. The persons eligible to
receive Stock Awards are the Employees, Directors and Consultants of
the Company and its Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to
provide a means by which eligible recipients of Stock Awards may be
given an opportunity to benefit from increases in value of the Common
Stock through the granting of the following Stock Awards: (i)
Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock
bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks
to retain the services of the group of persons eligible to receive
Stock Awards, to secure and retain the services of new members of this
group and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of
the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee of one or more members of the
Board appointed by the Board in accordance with subsection 3(c).
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means KnowledgeMax, Inc., a Delaware corporation.
(g) "Consultant" means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or
advisory services and who is compensated for such services or (ii) who
is a member of the Board of Directors of an Affiliate. However, the
term "Consultant" shall not include either Directors who are not
compensated by the Company for their services as Directors or
Directors who are merely paid a director's fee by the Company for
their services as Directors.
(h) "Continuous Service" means that the Participant's service
with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Participant's
Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status
from an Employee of the Company to a Consultant of an Affiliate or a
Director will not constitute an interruption of Continuous Service.
The Board or the chief executive officer of the Company, in that
party's sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any
other personal leave.
(i) "Covered Employee" means the chief executive officer and
the four (4) other highest compensated officers of the Company for
whom total compensation is required to be reported to stockholders
under the Exchange Act, as determined for purposes of Section 162(m)
of the Code.
(j) "Director" means a member of the Board of Directors of the
Company.
(k) "Disability" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.
(l) "Employee" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee
by the Company or an Affiliate shall not be sufficient to constitute
"employment" by the Company or an Affiliate.
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" means, as of any date, the value of
the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or market (or
the exchange or market with the greatest volume of trading in the
Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(p) "Listing Date" means the first date upon which any security
of the Company is listed (or approved for listing) upon notice of
issuance on any securities exchange or designated (or approved for
designation) upon notice of issuance as a national market security on
an interdealer quotation system.
(q) "Non-Employee Director" means a Director who either (i) is
not a current Employee or Officer of the Company or its parent or a
subsidiary, does not receive compensation (directly or indirectly)
from the Company or its parent or a subsidiary for services rendered
as a consultant or in any capacity other than as a Director (except
for an amount as to which disclosure would not be required under Item
404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a)
of Regulation S-K and is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-
K; or (ii) is otherwise considered a "non-employee director" for
purposes of Rule 16b-3.
(r) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(s) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(t) "Option" means an Incentive Stock Option or a Nonstatutory
Stock Option granted pursuant to the Plan.
(u) "Option Agreement" means a written agreement between the
Company and an Optionholder evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.
(v) "Optionholder" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
(w) "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within
the meaning of Treasury Regulations promulgated under Section 162(m)
of the Code), is not a former employee of the Company or an
"affiliated corporation" receiving compensation for prior services
(other than benefits under a tax qualified pension plan), was not an
officer of the Company or an "affiliated corporation" at any time and
is not currently receiving direct or indirect remuneration from the
Company or an "affiliated corporation" for services in any capacity
other than as a Director or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.
(x) "Participant" means a person to whom a Stock Award is
granted pursuant to the Plan or, if applicable, such other person who
holds an outstanding Stock Award.
(y) "Plan" means this KnowledgeMax, Inc. 2000 Equity Incentive
Plan.
(z) "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act or any successor to Rule 16b-3, as in effect from time to
time.
(aa) "Securities Act" means the Securities Act of 1933, as
amended.
(bb) "Stock Award" means any right granted under the Plan,
including an Option, a stock bonus and a right to acquire restricted
stock.
(cc) "Stock Award Agreement" means a written agreement between
the Company and a holder of a Stock Award evidencing the terms and
conditions of an individual Stock Award grant. Each Stock Award
Agreement shall be subject to the terms and conditions of the Plan.
(dd) "Ten Percent Stockholder" means a person who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any of its Affiliates.
3. ADMINISTRATION.
(a) Administration by Board. The Board shall administer the
Plan unless and until the Board delegates administration to a
Committee, as provided in subsection 3(c).
(b) Powers of Board. The Board shall have the power, subject
to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types
of Stock Award shall be granted; the provisions of each Stock Award
granted (which need not be identical), including the time or times
when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to
which a Stock Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in the
Plan or in any Stock Award Agreement, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iii) To amend the Plan or a Stock Award as provided in
Section 12.
(iv) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions
of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the
Plan to a Committee or Committees of one (1) or more members of the
Board, and the term "Committee" shall apply to any person or persons
to whom such authority has been delegated. If administration is
delegated to a Committee, the Committee shall have, in connection with
the administration of the Plan, the powers theretofore possessed by
the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from
time to time by the Board. The Board may abolish the Committee at any
time and revest in the Board the administration of the Plan.
(ii) Committee Composition when Common Stock is Publicly
Traded. At such time as the Common Stock is publicly traded, in the
discretion of the Board, a Committee may consist solely of two or more
Outside Directors, in accordance with Section 162(m) of the Code,
and/or solely of two or more Non-Employee Directors, in accordance
with Rule 16b-3. Within the scope of such authority, the Board or the
Committee may (1) delegate to a committee of one or more members of
the Board who are not Outside Directors the authority to grant Stock
Awards to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award or (b) not
persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code and/or) (2) delegate to a committee of one
or more members of the Board who are not Non-Employee Directors the
authority to grant Stock Awards to eligible persons who are not then
subject to Section 16 of the Exchange Act.
(d) Effect of Board's Decision. All determinations,
interpretations and constructions made by the Board in good faith
shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.
4. SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to the provisions of Section 11
relating to adjustments upon changes in Common Stock, the Common Stock
that may be issued pursuant to Stock Awards shall not exceed in the
aggregate Five Hundred Fifty Thousand (550,000) shares of Common
Stock.
(b) Reversion of Shares to the Share Reserve. If any Stock
Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the shares of Common
Stock not acquired under such Stock Award shall revert to and again
become available for issuance under the Plan.
(c) Source of Shares. The shares of Common Stock subject to
the Plan may be unissued shares or reacquired shares, bought on the
market or otherwise.
5. ELIGIBILITY.
(a) Eligibility for Specific Stock Awards. Incentive Stock
Options may be granted only to Employees. Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and
Consultants.
(b) Ten Percent Stockholders. A Ten Percent Stockholder shall
not be granted an Incentive Stock Option unless the exercise price of
such Option is at least one hundred ten percent (110%) of the Fair
Market Value of the Common Stock at the date of grant and the Option
is not exercisable after the expiration of five (5) years from the
date of grant.
(c) Section 162(m) Limitation. Subject to the provisions of
Section 11 relating to adjustments upon changes in the shares of
Common Stock, no Employee shall be eligible to be granted Options
covering more than Two Hundred Seventy Five Thousand (275,000) shares
of Common Stock during any calendar year. This subsection 5(c) shall
not apply prior to the Listing Date and, following the Listing Date,
this subsection 5(c) shall not apply until (i) the earliest of: (1)
the first material modification of the Plan (including any increase in
the number of shares of Common Stock reserved for issuance under the
Plan in accordance with Section 4); (2) the issuance of all of the
shares of Common Stock reserved for issuance under the Plan; (3) the
expiration of the Plan; or (4) the first meeting of stockholders at
which Directors are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the
first registration of an equity security under Section 12 of the
Exchange Act; or (ii) such other date required by Section 162(m) of
the Code and the rules and regulations promulgated thereunder.
(d) Consultants.
(i) Prior to the Listing Date, a Consultant shall not be
eligible for the grant of a Stock Award if, at the time of grant,
either the offer or the sale of the Company's securities to such
Consultant is not exempt under Rule 701 of the Securities Act ("Rule
701") because of the nature of the services that the Consultant is
providing to the Company, or because the Consultant is not a natural
person, or as otherwise provided by Rule 701, unless the Company
determines that such grant need not comply with the requirements of
Rule 701 and will satisfy another exemption under the Securities Act
as well as comply with the securities laws of all other relevant
jurisdictions.
(ii) From and after the Listing Date, a Consultant shall
not be eligible for the grant of a Stock Award if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act
("Form S-8") is not available to register either the offer or the sale
of the Company's securities to such Consultant because of the nature
of the services that the Consultant is providing to the Company, or
because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be registered in
another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (ii) that such grant complies with
the securities laws of all other relevant jurisdictions.
(iii) Rule 701 and Form S-8 generally are available to
consultants and advisors only if (i) they are natural persons; (ii)
they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the
issuer's parent; and (iii) the services are not in connection with the
offer or sale of securities in a capital-raising transaction, and do
not directly or indirectly promote or maintain a market for the
issuer's securities.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. All Options shall
be separately designated Incentive Stock Options or Nonstatutory Stock
Options at the time of grant, and, if certificates are issued, a
separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. The
provisions of separate Options need not be identical, but each Option
shall include (through incorporation of provisions hereof by reference
in the Option or otherwise) the substance of each of the following
provisions:
(a) Term. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date it
was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to
the provisions of subsection 5(b) regarding Ten Percent Stockholders,
the exercise price of each Incentive Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption
or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
(c) Exercise Price of a Nonstatutory Stock Option. The
exercise price of each Nonstatutory Stock Option shall be not less
than eighty-five percent (85%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be
granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption
or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
(d) Consideration. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time
the Option is exercised or (ii) at the discretion of the Board at the
time of the grant of the Option (or subsequently in the case of a
Nonstatutory Stock Option) (1) by delivery to the Company of other
Common Stock, (2) according to a deferred payment or other similar
arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise
specifically provided in the Option, the purchase price of Common
Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from
the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such
longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stock's
"par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall
be compounded at least annually and shall be charged at the minimum
rate of interest necessary to avoid the treatment as interest, under
any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement.
(e) Transferability of an Incentive Stock Option. An Incentive
Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option. A
Nonstatutory Stock Option shall be transferable to the extent provided
in the Option Agreement. If the Nonstatutory Stock Option does not
provide for transferability, then the Nonstatutory Stock Option shall
not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
(g) Vesting Generally. The total number of shares of Common
Stock subject to an Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be
equal. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on
performance or other criteria) as the Board may deem appropriate. The
vesting provisions of individual Options may vary. The provisions of
this subsection 6(g) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may
be exercised.
(h) Termination of Continuous Service. In the event an
Optionholder's Continuous Service terminates (other than upon the
Optionholder's death or Disability), the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination) but only within
such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Optionholder's Continuous
Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate.
(i) Extension of Termination Date. An Optionholder's Option
Agreement may also provide that if the exercise of the Option
following the termination of the Optionholder's Continuous Service
(other than upon the Optionholder's death or Disability) would be
prohibited at any time solely because the issuance of shares of Common
Stock would violate the registration requirements under the Securities
Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in subsection 6(a) or
(ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.
(j) Disability of Optionholder. In the event that an
Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise
such Option as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period
specified in the Option Agreement) or (ii) the expiration of the term
of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option
within the time specified herein, the Option shall terminate.
(k) Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death
or (ii) the Optionholder dies within the period (if any) specified in
the Option Agreement after the termination of the Optionholder's
Continuous Service for a reason other than death, then the Option may
be exercised (to the extent the Optionholder was entitled to exercise
such Option as of the date of death) by the Optionholder's estate, by
a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the Option upon the
Optionholder's death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18)
months following the date of death (or such longer or shorter period
specified in the Option Agreement) or (2) the expiration of the term
of such Option as set forth in the Option Agreement. If, after death,
the Option is not exercised within the time specified herein, the
Option shall terminate.
(l) Early Exercise. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as
to any part or all of the shares of Common Stock subject to the Option
prior to the full vesting of the Option. Any unvested shares of
Common Stock so purchased may be subject to a repurchase option in
favor of the Company or to any other restriction the Board determines
to be appropriate.
(m) Right of Repurchase. The Option may, but need not,
include a provision whereby the Company may elect, prior to the
Listing Date, to repurchase all or any part of the vested shares of
Common Stock acquired by the Optionholder pursuant to the exercise of
the Option.
(n) Right of First Refusal. The Option may, but need not,
include a provision whereby the Company may elect, prior to the
Listing Date, to exercise a right of first refusal following receipt
of notice from the Optionholder of the intent to transfer all or any
part of the shares of Common Stock received upon the exercise of the
Option. Except as expressly provided in this subsection 6(n), such
right of first refusal shall otherwise comply with any applicable
provisions of the Bylaws of the Company.
7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) Stock Bonus Awards. Each stock bonus agreement shall be in
such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of stock bonus
agreements may change from time to time, and the terms and conditions
of separate stock bonus agreements need not be identical, but each
stock bonus agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:
(i) Consideration. A stock bonus may be awarded in
consideration for past services actually rendered to the Company or an
Affiliate for its benefit.
(ii) Vesting. Shares of Common Stock awarded under the
stock bonus agreement may, but need not, be subject to a share
repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.
(iii) Termination of Participant's Continuous Service. In
the event a Participant's Continuous Service terminates, the Company
may reacquire any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination under
the terms of the stock bonus agreement.
(iv) Transferability. Rights to acquire shares of Common
Stock under the stock bonus agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in
the stock bonus agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the stock bonus
agreement remains subject to the terms of the stock bonus agreement.
(b) Restricted Stock Awards. Each restricted stock purchase
agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from
time to time, and the terms and conditions of separate restricted
stock purchase agreements need not be identical, but each restricted
stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:
(i) Purchase Price. The purchase price of restricted
stock awards shall not be less than eighty-five percent (85%) of the
Common Stock's Fair Market Value on the date such award is made or at
the time the purchase is consummated.
(ii) Consideration. The purchase price of Common Stock
acquired pursuant to the restricted stock purchase agreement shall be
paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other
similar arrangement with the Participant; or (iii) in any other form
of legal consideration that may be acceptable to the Board in its
discretion; provided, however, that at any time that the Company is
incorporated in Delaware, then payment of the Common Stock's "par
value," as defined in the Delaware General Corporation Law, shall not
be made by deferred payment.
(iii) Vesting. Shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board.
(iv) Termination of Participant's Continuous Service. In
the event a Participant's Continuous Service terminates, the Company
may repurchase or otherwise reacquire any or all of the shares of
Common Stock held by the Participant which have not vested as of the
date of termination under the terms of the restricted stock purchase
agreement.
(v) Transferability. Rights to acquire shares of Common
Stock under the restricted stock purchase agreement shall be
transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board
shall determine in its discretion, so long as Common Stock awarded
under the restricted stock purchase agreement remains subject to the
terms of the restricted stock purchase agreement.
8. COVENANTS OF THE COMPANY.
(a) Availability of Shares. During the terms of the Stock
Awards, the Company shall keep available at all times the number of
shares of Common Stock required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to
obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards
and to issue and sell shares of Common Stock upon exercise of the
Stock Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any
Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is
obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to Stock Awards
shall constitute general funds of the Company.
10. MISCELLANEOUS.
(a) Acceleration of Exercisability and Vesting. The Board
shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part
thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first
be exercised or the time during which it will vest.
(b) Stockholder Rights. No Participant shall be deemed to be
the holder of, or to have any of the rights of a holder with respect
to, any shares of Common Stock subject to such Stock Award unless and
until such Participant has satisfied all requirements for exercise of
the Stock Award pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan
or any instrument executed or Stock Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the
Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or
without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with
the Company or an Affiliate or (iii) the service of a Director
pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the
Company or the Affiliate is incorporated, as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent
that the aggregate Fair Market Value (determined at the time of grant)
of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar
year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof
which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.
(e) Investment Assurances. The Company may require a
Participant, as a condition of exercising or acquiring Common Stock
under any Stock Award, (i) to give written assurances satisfactory to
the Company as to the Participant's knowledge and experience in
financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and
that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock
Award; and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the
Stock Award for the Participant's own account and not with any present
intention of selling or otherwise distributing the Common Stock. The
foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares
of Common Stock upon the exercise or acquisition of Common Stock under
the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) as to any
particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances
under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or appropriate
in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.
(f) Withholding Obligations. To the extent provided by the
terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of
the following means (in addition to the Company's right to withhold
from any compensation paid to the Participant by the Company) or by a
combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the
shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the Stock
Award, provided, however, that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) Capitalization Adjustments. If any change is made in the
Common Stock subject to the Plan, or subject to any Stock Award,
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of
securities subject to the Plan pursuant to subsection 4(a) and the
maximum number of securities subject to award to any person pursuant
to subsection 5(c), and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of securities and
price per share of Common Stock subject to such outstanding Stock
Awards. The Board shall make such adjustments, and its determination
shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a
transaction "without receipt of consideration" by the Company.)
(b) Dissolution or Liquidation. In the event of a dissolution
or liquidation of the Company, then all outstanding Stock Awards shall
terminate immediately prior to such event.
(c) Asset Sale, Merger, Consolidation or Reverse Merger. In
the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or
consolidation in which the Company is not the surviving corporation or
(iii) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise
(individually, a "Corporate Transaction"), then any surviving
corporation or acquiring corporation shall assume any Stock Awards
outstanding under the Plan or shall substitute similar stock awards
(including an award to acquire the same consideration paid to the
stockholders in the Corporate Transaction for those outstanding under
the Plan). In the event any surviving corporation or acquiring
corporation refuses to assume such Stock Awards or to substitute
similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service
has not terminated, the vesting of such Stock Awards (and, if
applicable, the time during which such Stock Awards may be exercised)
shall be accelerated to include an additional twelve (12) months of
vesting, and the Stock Awards shall terminate if not exercised (if
applicable) at or prior to the Corporate Transaction. With respect to
any other Stock Awards outstanding under the Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to the
Corporate Transaction.
(d) Change in Control--Securities Acquisition. After the
Listing Date, in the event of an acquisition by any person, entity or
group within the meaning of Section 13(d) or 14(d) of the Exchange
Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company
or an Affiliate) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor
rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
Directors and provided that such acquisition is not a result of, and
does not constitute a transaction described in, subsection 11(c)
hereof, then with respect to Stock Awards held by Participants whose
Continuous Service has not terminated, the vesting of such Stock
Awards (and, if applicable, the time during which such Stock Awards
may be exercised) shall be accelerated to include an additional twelve
(12) months of vesting.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) Amendment of Plan. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11
relating to adjustments upon changes in Common Stock, no amendment
shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary to satisfy the
requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.
(b) Stockholder Approval. The Board may, in its sole
discretion, submit any other amendment to the Plan for stockholder
approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and
the regulations thereunder regarding the exclusion of performance-
based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) Contemplated Amendments. It is expressly contemplated that
the Board may amend the Plan in any respect the Board deems necessary
or advisable to provide eligible Employees with the maximum benefits
provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under
it into compliance therewith.
(d) No Impairment of Rights. Rights under any Stock Award
granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of
the Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock Awards. The Board at any time, and from
time to time, may amend the terms of any one or more Stock Awards;
provided, however, that the rights under any Stock Award shall not be
impaired by any such amendment unless (i) the Company requests the
consent of the Participant and (ii) the Participant consents in
writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) Plan Term. The Board may suspend or terminate the Plan at
any time. Unless sooner terminated, the Plan shall terminate on the
day before the tenth (10th) anniversary of the date the Plan is
adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No Stock Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.
(b) No Impairment of Rights. Suspension or termination of the
Plan shall not impair rights and obligations under any Stock Award
granted while the Plan is in effect except with the written consent of
the Participant.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but
no Stock Award shall be exercised (or, in the case of a stock bonus,
shall be granted) unless and until the Plan has been approved by the
stockholders of the Company, which approval shall be within twelve
(12) months before or after the date the Plan is adopted by the Board.
15. CHOICE OF LAW.
The law of the State of Delaware shall govern all questions
concerning the construction, validity and interpretation of this Plan,
without regard to such state's conflict of laws rules.
FIRST AMENDMENT TO
KNOWLEDGEMAX, INC.
2000 EQUITY INCENTIVE PLAN
RECITALS
A. On June 14, 2000, the Board of Directors of KnowledgeMax,
Inc., a Delaware corporation (the "Company"), adopted the 2000 Equity
Incentive Plan (the "Plan").
B. By action of the Board of Directors as of December 22, 2001
and of the stockholders as of December 22, 2001, the Company adopted
the following amendment to the Plan.
AMENDMENT
1. Section 4(a) of the Plan shall be amended and restated in
its entirety as follows:
"Share Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in Common Stock, the Common Stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate
Seven Hundred Thousand (700,000) shares of Common Stock."
2. Except as set forth in this amendment, the Plan shall be
unaffected hereby and shall remain in full force and effect.
I hereby certify that the foregoing amendment to the Plan was
duly adopted by the Board of Directors of KnowledgeMax, Inc. as of
December , 2001.
Executed on this day of December, 2001.
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Secretary
I hereby certify that the foregoing amendment to the Plan was
duly approved by the stockholders of KnowledgeMax, Inc. as of December
, 2001.
Executed on this day of December, 2001.
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Secretary