Exhibit 10.1
INNUITY, INC.
AMENDED AND RESTATED 1999 STOCK OPTION PLAN
SECTION
1. PURPOSE
The purpose of the Innuity, Inc.
Amended and Restated 1999 Stock Option Plan (the
“Plan”) is to enhance the long-term shareholder value
of Innuity, Inc., a Utah corporation (the “Company”),
by offering opportunities to employees, directors, officers,
consultants, agents, advisors, and independent contractors of the
Company and its Subsidiaries (as defined in Section 2) to
participate in the Company’s growth and success, and to
encourage them to remain in the service of the Company and its
Subsidiaries and to acquire and maintain stock ownership in the
Company.
SECTION
2. DEFINITIONS
For purposes of the Plan, the
following terms shall be defined as set forth below:
2.1 AWARD
“Award” means any Option
or Stock Purchase Right granted under the Plan.
2.2 AWARD AGREEMENT
“Award Agreement” means a
written or electronic agreement between the Company and a
Participant setting forth the terms, conditions and restrictions of
the Award granted to the Participant.
2.3 BOARD
“Board” means the Board
of Directors of the Company.
2.4 CAUSE
“Cause” means dishonesty,
fraud, misconduct, unauthorized use or disclosure of confidential
information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as
determined by the Plan Administrator, whose determination shall be
conclusive and binding.
2.5 CODE
“Code” means the Internal
Revenue Code of 1986, as amended from time to time.
2.6 COMMON STOCK
“Common Stock” means the
common stock, no par value, of the Company.
1
2.7 CORPORATE TRANSACTION
“Corporate Transaction”
means any of the following events:
(a) Consummation
of any merger or consolidation of the Company in which the Company
is not the continuing or surviving corporation, or pursuant to
which shares of Common Stock are converted into cash, securities,
or other property, if following such merger or consolidation the
holders of the Company’s outstanding voting securities
immediately prior to such merger or consolidation own less than
66-2/3% of the outstanding voting securities of the surviving
corporation;
(b) Consummation
of any sale, lease, exchange, or other transfer, in one transaction
or a series of related transactions, of all or substantially all of
the Company’s assets, other than a transfer of the
Company’s assets to a majority-owned subsidiary corporation
(as the term “subsidiary corporation” is defined in
Section 8.3) of the Company; or
(c) Approval by the holders of
the Common Stock of any plan or proposal for the liquidation or
dissolution of the Company.
Ownership of voting securities shall
take into account and shall include ownership as determined by
applying Rule 13d-3(d)(1)(i) (as in effect on the date of
adoption of the Plan) under the Exchange Act.
2.8 DISABILITY
“Disability” means
“permanent and total disability” as that term is
defined for purposes of Section 22(e)(3) of the Code.
2.9 EXCHANGE ACT
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
The “Fair Market Value”
shall be as established in good faith by the Plan Administrator or
(a) if the Common Stock is listed on the Nasdaq National Market,
the average of the high and low per share sales prices for the
Common Stock as reported by the Nasdaq National Market for a single
trading day or (b) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, the average of
the high and low per share sales prices for the Common Stock as
such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is
no such reported price for the Common Stock for the date in
question, then such price on the last preceding date for which such
price exists shall be determinative of the Fair Market Value.
2.11 GOOD REASON
“Good Reason” means the
occurrence of any one of the following events, in the event that
the Participant (i) has given the Successor Corporation
written notice of such occurrence and
2
the
Successor Corporation has failed to cure such event within thirty
(30) days, and (ii) Participant resigns within sixty
(60) days following the expiration of such thirty-day
period:
(a) relocation
of the Participant to any place greater than fifty (50) miles
from his or her principal location prior to the occurrence of the
Corporate Transaction, except for reasonably required travel on the
Successor Corporation’s business that is not materially
greater than such travel requirements prior to the Corporate
Transaction; or
(b) substantial
reduction of the Participant’s compensation package, unless
such a reduction is made by the Company ratably with all other
employees at similar levels of responsibility.
2.12 GRANT DATE
“Grant Date” means the
date on which the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan
Administrator as the date an Option is to be granted.
2.13 INCENTIVE STOCK OPTION
“Incentive Stock Option”
means an Option to purchase Common Stock granted under
Section 7 with the intention that it qualify as an
“incentive stock option” as that term is defined in
Section 422 of the Code.
2.14 NONQUALIFIED STOCK OPTION
“Nonqualified Stock
Option” means an Option to purchase Common Stock granted
under Section 7 other than an Incentive Stock Option.
2.15 OPTION
“Option” means the right
to purchase Common Stock granted under Section 7.
2.16 PARTICIPANT
“Participant” means
(i) the person to whom an Award is granted; (ii) for a
Participant who has died, the personal representative of the
Participant’s estate, the person(s) to whom the
Participant’s rights under the Award have passed by will or
by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 9; or
(iii) person(s) to whom an Award has been transferred in
accordance with Section 9.
2.17 PLAN ADMINISTRATOR
“Plan Administrator”
means the Board or any committee of the Board designated to
administer the Plan under Section 3.1.
3
2.18 RESTRICTED STOCK
“Restricted Stock” means
shares of Common Stock acquired pursuant to a grant of Stock
Purchase Rights under Section 17.
2.19 RETIREMENT
“Retirement” means
retirement as of the individual’s normal retirement date as
that term is defined by the Plan Administrator from time to time
for purposes of the Plan.
2.20 SECURITIES ACT
“Securities Act” means
the Securities Act of 1933, as amended.
2.21 SERVICE
“Service” means a
Participant’s employment or service with the Company or its
Subsidiaries, whether in the capacity of an employee, a director, a
consultant, an agent, an advisor, or an independent contractor.
Unless otherwise provided by the Plan Administrator, a
Participant’s Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant
renders such Service or a change in the Company or its Subsidiary
for which the Participant renders such Service, provided that there
is no interruption or termination of the Participant’s
Service.
2.22 STOCK PURCHASE RIGHT
“Stock Purchase Right”
means the right to purchase Common Stock granted to a Participant
pursuant to Section 17.
2.23 SUBSIDIARY
“Subsidiary”, except as
provided in Section 8.3 in connection with Incentive Stock
Options, means any entity that is directly or indirectly controlled
by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity
that may become a direct or indirect parent of the Company.
2.24 SUCCESSOR CORPORATION
“Successor Corporation”
has the meaning set forth under Section 10.2
2.25 VESTING CONDITIONS
“Vesting Conditions” mean
those conditions established in accordance with the Plan prior to
the satisfaction of which shares subject to an Award remain subject
to forfeiture or a repurchase option in favor of the Company
exercisable for the Participant’s monetary purchase price, if
any, for such shares upon the Participant’s termination of
Service.
4
SECTION
3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the
Board or a committee or committees (which term includes
subcommittees) appointed by, and consisting of two or more members
of, the Board. If and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, the Board shall
consider in selecting the Plan Administrator and the membership of
any committee acting as Plan Administrator, with respect to any
persons subject or likely to become subject to Section 16 of
the Exchange Act, the provisions regarding (a) “outside
directors” as contemplated by Section 162(m) of the Code and
(b) “Non-Employee Directors” as contemplated by
Rule 16b-3 under the Exchange Act. The Board may delegate the
responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees
consisting of two or more members of the Board, subject to such
limitations as the Board deems appropriate. Committee members shall
serve for such term as the Board may determine, subject to removal
by the Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION
BY THE PLAN ADMINISTRATOR
Except for the terms and conditions
explicitly set forth in the Plan, the Plan Administrator shall have
exclusive authority, in its discretion, to determine all matters
relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions,
restrictions and limitations, if any, of an Award and the terms of
any instrument that evidences the Award. The Plan Administrator
shall also have exclusive authority to interpret the Plan and may
from time to time adopt, and change, rules and regulations of
general application for the Plan’s administration. The Plan
Administrator’s interpretation of the Plan and its rules and
regulations, and all actions taken and determinations made by the
Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator
may delegate administrative duties to such of the Company’s
officers as it so determines.
SECTION
4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to
time as provided in Section 10.1, a maximum of
6,440,466 shares of Common Stock shall be available for
issuance under the Plan. Shares issued under the Plan shall be
drawn from authorized and unissued shares or shares now held or
subsequently acquired by the Company. Except as adjusted pursuant
to Section 10.1, in no event shall more than
6,440,466 shares of Stock be available for issuance pursuant
to the exercise of Incentive Stock Options.
4.2 REUSE OF SHARES
Any shares of Common Stock that have
been made subject to an Award but that cease to be subject to the
Award (other than by reason of exercise of the Award to the extent
it is
5
exercised for shares) shall again be available for issuance in
connection with future grants of Awards under the Plan.
SECTION
5. ELIGIBILITY
Awards may be granted under the Plan
to those officers, directors, and key employees of the Company and
its Subsidiaries as the Plan Administrator from time to time
selects. Awards may also be made to consultants, agents, advisors,
and independent contractors who provide Service to the Company and
its Subsidiaries.
SECTION
6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the
authority, in its sole discretion, to determine the type or types
of awards to be made under the Plan. Such awards may consist of
Incentive Stock Options, Nonqualified Stock Options, and/or Stock
Purchase Rights. Awards may be granted singly or in
combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan
to the contrary, the Plan Administrator may grant Awards under the
Plan in substitution for awards issued under other plans, or assume
under the Plan awards issued under other plans, if the other plans
are or were plans of other acquired entities (“Acquired
Entities”) (or the parent of the Acquired Entity) and the new
Award is substituted, or the old award is assumed, by reason of a
merger, consolidation, acquisition of property or of stock,
reorganization or liquidation (the “Acquisition
Transaction”). In the event that a written agreement pursuant
to which the Acquisition Transaction is completed is approved by
the Board and said agreement sets forth the terms and conditions of
the substitution for or assumption of outstanding awards of the
Acquired Entity, said terms and conditions shall be deemed to be
the action of the Plan Administrator without any further action by
the Plan Administrator, except as may be required for compliance
with Rule 16b-3 under the Exchange Act, and the persons
holding such awards shall be deemed to be Participants.
SECTION
7. TERMS AND CONDITIONS OF AWARDS
7.1 GRANT OF AWARDS
The Plan Administrator is authorized
under the Plan, in its sole discretion, to issue Awards as
Incentive Stock Options, Nonqualified Stock Options and/or Stock
Purchase Rights, which shall be appropriately designated.
7.2 AWARD EXERCISE PRICE
The exercise price for shares
purchased under an Award shall be as determined by the Plan
Administrator, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options.
6
7.3 TERM OF OPTIONS
The term of each Option shall be as
established by the Plan Administrator or, if not so established,
shall be ten (10) years from the Grant Date.
7.4 EXERCISE OF AWARDS
The Plan Administrator shall
establish and set forth in each instrument that evidences an Award
the time at which or the installments in which the Award shall
become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the
instrument evidencing an Option, the Option will become exercisable
according to the following schedule, which may be waived or
modified by the Plan Administrator at any time:
| |
|
|
| Period of Holder’s Continuous
Employment |
|
|
| or Service With the Company or Its
Subsidiaries |
|
Percent of Total Option That Is |
|
From the Option Grant Date |
|
Exercisable |
|
After
6 months
|
|
25% |
|
|
|
|
|
Each three-month
period of continuous service completed thereafter
|
|
An additional 6.25% |
|
|
|
|
|
After 3
1/2 years
|
|
100% |
A Stock Purchase Right shall be
exercisable within a period established by the Plan
Administrator.
To the extent that the right to
purchase shares has accrued thereunder, an Award may be exercised
from time to time by written notice to the Company, in accordance
with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Award is being
exercised and accompanied by payment in full as described in
Section 7.5. Subject to the provisions of this Plan, an Award
may be exercised at different times for portions of the total
number of shares for which the right to purchase shall have vested,
provided that such portions are in multiples of ten
(10) shares if the Participant holds vested Awards for
ninety-nine (99) or fewer shares and otherwise in multiples of
one hundred (100) shares.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares
purchased under an Option shall be paid in full to the Company by
delivery of consideration equal to the product of the Option
exercise price and the number of shares purchased. Such
consideration must be paid in cash or by check or, unless the Plan
Administrator in its sole discretion determines otherwise, either
at the time the Option is granted or at any time before it is
exercised, a combination of cash and/or check and one or both of
the following alternative forms: (a) tendering (either
actually or, if and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, by attestation) Common
Stock already owned by the Participant for at least six months (or
any shorter period necessary to avoid a charge to the
Company’s earnings for financial reporting purposes) having
a
7
Fair
Market Value on the day prior to the exercise date equal to the
aggregate Option exercise price or (b) if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage
firm designated by the Company to deliver promptly to the Company
the aggregate amount of sale or loan proceeds to pay the Option
exercise price and any withholding tax obligations that may arise
in connection with the exercise and (ii) the Company to
deliver the certificates for such purchased shares directly to such
brokerage firm, all in accordance with the regulations of the
Federal Reserve Board. In addition, the exercise price for shares
purchased under an Option may be paid, either singly or in
combination with one or more of the alternative forms of payment
authorized by this Section 7.5, by such other consideration as
the Plan Administrator may permit.
The purchase price for shares
purchased under a Stock Purchase Right shall be paid in full to the
Company (a) in cash or by check or cash equivalent,
(b) by such other consideration as may be approved by the Plan
Administrator from time to time to the extent permitted by
applicable law, or (c) by any combination thereof.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall
establish and set forth in each instrument that evidences an Award
whether the Award will continue to be exercisable, and the terms
and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its
Subsidiaries, which provisions may be waived or modified by the
Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option will be exercisable
according to the following terms and conditions, which may be
waived or modified by the Plan Administrator at any time.
In case of termination of the
Participant’s employment or services other than by reason of
death or Cause, the Option shall be exercisable, to the extent of
the number of shares purchasable by the Participant at the date of
such termination, only (a) within one year if the termination
of the Participant’s employment or services is coincident
with Retirement or Disability or (b) within three months after
the date the Participant ceases to be an employee, director,
officer, consultant, agent, advisor or independent contractor of
the Company or a Subsidiary if termination of the
Participant’s employment or services is for any reason other
than Retirement or Disability, but in no event later than the
remaining term of the Option. Any Option exercisable at the time of
the Participant’s death may be exercised, to the extent of
the number of shares purchasable by the Participant at the date of
the Participant’s death, by the personal representative of
the Participant’s estate, the person(s) to whom the
Participant’s rights under the Option have passed by will or
the applicable laws of descent and distribution or the beneficiary
designated pursuant to Section 9 at any time or from time to
time within one year after the date of death, but in no event later
than the remaining term of the Option. Any portion of an Option
that is not exercisable on the date of termination of the
Participant’s employment or services shall terminate on such
date, unless the Plan Administrator determines otherwise. In case
of termination of the Participant’s employment or services
for Cause, the Option shall automatically terminate upon first
notification to the Participant of such termination, unless the
Plan Administrator determines otherwise. If a Participant’s
employment or services with the Company are suspended pending
8
an
investigation of whether the Participant shall be terminated for
Cause, all the Participant’s rights under any Option likewise
shall be suspended during the period of investigation.
A transfer of employment or services
between or among the Company and its Subsidiaries shall not be
considered a termination of employment or services. The effect of a
Company-approved leave of absence on the terms and conditions of an
Option shall be determined by the Plan Administrator, in its sole
discretion.
SECTION
8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by
Section 422 of the Code, Incentive Stock Options shall be
subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair
Market Value (determined as of the Grant Date) of Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time during any calendar year (under the Plan and all other
stock option plans of the Company) exceeds $100,000, such portion
in excess of $100,000 shall be treated as a Nonqualified Stock
Option. In the event the Participant holds two or more such Options
that become exercisable for the first time in the same calendar
year, such limitation shall be applied on the basis of the order in
which such Options are granted.
8.2 10% SHAREHOLDERS
If an individual owns more than 10%
of the total voting power of all classes of the Company’s
stock, then the exercise price per share of an Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the
Common Stock on the Grant Date and the Option term shall not exceed
five years. The determination of 10% ownership shall be made in
accordance with Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of
the Company or one of its parent corporations or subsidiary
corporations may not be granted Incentive Stock Options. For
purposes of this Section 8.3, “parent corporation” and
“subsidiary corporation” shall have the meanings
attributed to those terms for purposes of Section 422 of the
Code.
8.4 TERM
The term of an Incentive Stock Option
shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option
tax treatment, an Option designated as an Incentive Stock Option
must be exercised within three months after termination of
employment for reasons other than death, except that, in the case
of termination of employment due to total disability, such Option
must be exercised within one year after such termination.
Employment shall not be
9
deemed
to continue beyond the first 90 days of a leave of absence
unless the Participant’s reemployment rights are guaranteed
by statute or contract. For purposes of this Section 8.5,
“total disability” shall mean a mental or physical
impairment of the Participant that is expected to result in death
or that has lasted or is expected to last for a continuous period
of 12 months or more and that causes the Participant to be
unable, in the opinion of the Company and two independent
physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall
be deemed to have occurred on the first day after the Company and
the two independent physicians have furnished their opinion of
total disability to the Plan Administrator.
8.6 TAXATION OF INCENTIVE STOCK
OPTIONS
In order to obtain certain tax
benefits afforded to Incentive Stock Options under Section 422
of the Code, the Participant must hold the shares issued upon the
exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of
exercise. A Participant may be subject to the alternative minimum
tax at the time of exercise of an Incentive Stock Option. The Plan
Administrator may require a Participant to give the Company prompt
notice of any disposition of shares acquired by the exercise of an
Incentive Stock Option prior to the expiration of such holding
periods.
SECTION
9. ASSIGNABILITY
No Option granted under the Plan may
be assigned, pledged, or transferred by the Participant other than
by will or by the applicable laws of descent and distribution, and,
during the Participant’s lifetime, such Option may be
exercised only by the Participant or a permitted assignee or
transferee of the Participant (as provided below). Notwithstanding
the foregoing, and to the extent permitted by Section 422 of
the Code, the Plan Administrator, in its sole discretion, may
permit such assignment, transfer, and exercisability and may permit
a Participant to designate a beneficiary who may exercise the
Option after the Participant’s death; provided, however, that
any Option so assigned or transferred shall be subject to all the
same terms and conditions contained in the instrument evidencing
the Option.
SECTION
10. ADJUSTMENTS
10.1 ADJUSTMENT OF SHARES
In the event that, at any time or
from time to time, a stock dividend, stock split, spin-off,
combination or exchange of shares, reclassification,
recapitalization, merger, consolidation, distribution to
shareholders other than a
| 
