STUDIO ONE MEDIA,
INC.
2009 Long-Term Incentive
Plan
1.
Purposes of the Plan . The
Company, by means of the Plan, seeks to attract and retain the best
available qualified personnel for positions of substantial
responsibility, such as Employees, Directors and Consultants, and
to provide additional incentives to such personnel to exert maximum
efforts for the success of the Company.
The Plan permits the grant of
Incentive Stock Options, Nonstatutory Stock Options, and Restricted
Stock Awards.
2.
Definitions . As used
herein, the following definitions shall apply:
“ Administrator ” means the
Board or any of its Committees as shall be administering the Plan
in accordance with Section 4 hereof.
“ Applicable Laws ” means the
requirements relating to the administration of stock option plans
under U.S. state laws, U.S. federal laws, the Code, the rules and
regulations of any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any
other country or jurisdiction where Options or Stock Awards are
granted under the Plan.
“ Awardholder ” means the
holder of an outstanding Option or Stock Award granted under the
Plan.
“ Board ” means the Board of
Directors of the Company.
“ Cause ” shall, with respect
to any Participant, have the meaning specified in the Award
Agreement. In the absence of any definition in the Award
Agreement, “Cause” shall have the equivalent meaning or
the same meaning as “cause” or “for cause”
set forth in any employment, consulting, change in control or other
agreement for the performance of services between the Participant
and the Company or a Related Entity or, in the absence of any such
definition in such agreement, such term shall mean (i) the
failure by the Participant to perform his or her duties as assigned
by the Company (or a Related Entity) in a reasonable manner,
(ii) any violation or breach by the Participant of his or her
employment, consulting or other similar agreement with the Company
(or a Related Entity), if any, (iii) any violation or breach
by the Participant of his or her confidential information and
invention assignment, non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a
Related Entity, if any, (iv) any act by the Participant of
dishonesty or bad faith with respect to the Company (or
a Related Entity), (v) any material violation or breach
by the Participant of the Company’s or a Related
Entity’s policy for employee conduct, if any, (vi) use
of alcohol, drugs or other similar substances in a manner that
adversely affects the Participant’s work performance, or
(vii) the commission by the Participant of any act,
misdemeanor, or crime reflecting unfavorably upon the Participant
or the Company or any Related Entity. The good faith
determination by the Plan Administrator of whether the
Participant’s continuous service was terminated by the
Company for “Cause” shall be final and binding for all
purposes hereunder.
“ Change in Control
” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following
events:
(i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) (an “ Exchange Act Person
”) becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then
outstanding securities other than by virtue of a merger,
consolidation or similar transaction. Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur (A)
on account of the acquisition of securities of the Company by any
institutional investor, any affiliate thereof or any other Exchange
Act Person that acquires the Company’s securities in a
transaction or series of related transactions that are primarily a
private financing transaction for the Company or (B) solely because
the level of ownership held by any Exchange Act Person (the “
Subject Person ”) exceeds the designated percentage
threshold of the outstanding voting securities as a result of a
repurchase or other acquisition of voting securities by the Company
reducing the number of voting securities outstanding, provided that
if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by
the Company, and after such acquisition, the Subject Person becomes
the owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities owned by the
Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;
(ii) there
is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company if, immediately
after the consummation of such merger, consolidation or similar
transaction, the stockholders of the Company immediately prior
thereto do not own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such
merger, consolidation or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the
parent of the surviving entity in such merger, consolidation or
similar transaction; or
(iii) there
is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries, other than a sale, lease,
exclusive license or other disposition of all or substantially all
of the consolidated assets of the Company and its Subsidiaries to
an entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are owned by stockholders
of the Company in substantially the same proportion as their
ownership of the Company immediately prior to such sale, lease,
license or other disposition.
The term Change in Control shall not include a
sale of assets, merger or other transaction effected exclusively
for the purpose of changing the domicile of the Company.
Notwithstanding the foregoing or any other
provision of this Plan, the definition of Change in Control (or any
analogous term) in an individual written agreement between the
Company or any affiliate and the Awardholder shall supersede the
foregoing definition with respect to Stock Awards or Options
subject to such agreement (it being understood, however, that if no
definition of Change in Control or any analogous term is set forth
in such an individual written agreement, the foregoing definition
shall apply).
“ Code ” means the Internal
Revenue Code of 1986, as amended.
“ Committee ”
means a committee of Directors or other individuals satisfying
Applicable Laws appointed by the Board in accordance with
Section 4 hereof.
“ Common Stock ” means the
common stock of the Company, par value $0.001 per share.
“ Company ” means Studio One
Media, Inc., a Delaware corporation.
“ Consultant ”
means any person who is engaged by the Company or any Parent or
Subsidiary to render consulting or advisory services to such
entity.
“ Corporate Transaction
” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following
events:
(i) a
sale, lease or license, or other disposition of all
or substantially all, as determined by the Board, of the
consolidated assets of the Company and its Subsidiaries;
(ii) a
sale or other disposition of at least thirty percent (30%) of the
outstanding securities of the Company; or
(iii) a
merger, consolidation or similar transaction whether or not the
Company is the surviving Company.
“ Director ” means a member
of the Board.
“ Disability ” means total
and permanent disability as defined in Section 22(e)(3) of the
Code.
“ Employee ”
means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the
Company. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to
constitute “ employment ” by the
Company.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended.
“ Fair Market Value ” means,
as of any date, the value of Common Stock determined as
follows:
(i) If
the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system on the day of determination, as
reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If
the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the
Common Stock on the day of determination; or
(iii) In
the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the
Administrator.
“ Good Reason ” shall, with
respect to any Participant, have the meaning specified in the Award
Agreement. In the absence of any definition in the Award
Agreement, “Good Reason” shall have the equivalent
meaning (or the same meaning as “good reason” or
“for good reason”) set forth in any employment,
consulting, change in control or other agreement for the
performance of services between the Participant and the Company or
a Related Entity or, in the absence of any such definition in such
agreement(s), such term shall mean (i) the assignment to the
Participant of any duties inconsistent in any material respect with
the Participant’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities
as assigned by the Company (or a Related Entity) or any other
action by the Company (or a Related Entity) which results in
a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company (or a Related Entity) promptly
after receipt of notice thereof given by the Participant;
(ii) any failure by the Company (or a Related Entity) to
comply with its obligations to the Participant as agreed upon,
other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company (or a
Related Entity) promptly after receipt of notice thereof given by
the Participant; (iii) the Company’s (or Related
Entity’s) requiring the Participant to be based at any office
or location more than fifty (50) miles from the location of
employment as of the date of Award, except for travel reasonably
required in the performance of the Participant’s
responsibilities; (iv) any purported termination by the
Company (or a Related Entity) of the Participant’s continuous
service otherwise than for Cause, as defined Section 2(e), death,
or by reason of the Participant’s Disability as defined in
Section 2(o); or (v) any reduction in the
Participant’s base salary (unless such reduction is part of
Company-wide reduction that affects a majority of the persons of
comparable level to the Participant). The Participant
must give the Company written notice of any event the Participant
believes constitutes Good Reason. Such notice must be
delivered to the Company within 90 days of the first occurrence of
such event and the Company shall have 30 days to cure, if
possible.
“ Incentive Stock Option ”
means an Option intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the
Code.
“ Nonstatutory Stock Option ”
means an Option not intended to qualify as an Incentive Stock
Option.
“ Option ” means a stock
option granted pursuant to the Plan.
“ Option Agreement
” means a written or electronic agreement between the Company
and an Awardholder evidencing the terms and conditions of an
individual Option. The Option Agreement is subject to
the terms and conditions of the Plan.
“ Optioned Stock ” means
the Common Stock subject to an Option or a Stock Award.
“ Parent ” means a
“parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
“ Plan ” means this 2008
Long-Term Incentive Plan.
“ Restricted Stock
” means Shares issued pursuant to a Stock Award or Shares of
restricted stock issued pursuant to an Option that are subject to a
repurchase option by the Company.
“ Restricted Stock
Agreement ” means a written or electronic
agreement between the Company and the Awardholder evidencing the
terms and conditions of the individual Stock Award. The
Restricted Stock Agreement is subject to the terms and conditions
of the Plan.
“ Securities Act ” means the
Securities Act of 1933, as amended.
“ Service Provider ” means an
Employee, Director or Consultant.
“ Share ” means a share of
the Common Stock, as adjusted in accordance with Section 13
below.
“ Stock Award ” means a right
to receive or purchase Common Stock pursuant to Section 11
below.
“ Subsidiary ” means a
“subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3.
Stock Subject to the Plan .
General . Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares that
may be issued under the Plan is One Million Five Hundred Thousand
(1,500,000) Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
Availability of Shares Not Delivered under
Awards .
(i) If
any Shares subject to an Option or Stock Award, are forfeited,
expire or otherwise terminate without issuance of such Shares, or
any Option or Stock Award, is settled for cash or otherwise does
not result in the issuance of all or a portion of the Shares
subject to such Option or Stock Award, the Shares shall, to the
extent of such forfeiture, expiration, termination, cash settlement
or non-issuance, again be available for Award under the Plan,
subject to Section 3(b)(iv) below.
(ii) If
any Shares issued pursuant to an Option or Stock Award are
forfeited back to or repurchased by the Company, including, but not
limited to, any repurchase or forfeiture caused by the failure to
meet a contingency or condition required for the vesting of such
shares, then the Shares not acquired under such Option or Stock
Award shall revert to and again become available for issuance under
the Plan.
(iii) In
the event that any Option or Stock Award granted hereunder is
exercised through the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the
Company, or withholding tax liabilities arising from such Option or
Stock Award are satisfied by the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the
Company, then only the number of Shares issued net of the Shares
tendered or withheld shall be counted for purposes of determining
the maximum number of Shares available for grant under the
Plan.
(iv) Notwithstanding
anything in this Section 3(b) to the contrary and solely for
purposes of determining whether Shares are available for the grant
of Incentive Stock Options, the maximum aggregate number of shares
that may be granted under this Plan shall be determined without
regard to any Shares restored pursuant to this Section 3(b) that,
if taken into account, would cause the Plan to fail the requirement
under Code Section 422 that the Plan designate a maximum aggregate
number of shares that may be issued.
4.
Administration of the Plan
.
Administrator
. The Plan shall be administered by
the Board or a Committee appointed by the Board, which Committee
shall be constituted to comply with Applicable Laws.
Powers of the Administrator
. Subject to the
provisions of the Plan and, in the case of a Committee, the
specific duties delegated by the Board to such Committee, and
subject to the approval of any relevant authorities, the
Administrator shall have the authority in its
discretion:
(i) to
determine the Fair Market Value;
(ii) to
select the Service Providers to whom Options and Stock
Awards may from time to time be granted
hereunder;
(iii) to
approve forms of agreement for use under the Plan;
(iv) to
determine the terms and conditions of any Option or Stock Award
granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the number of Shares
subject to the award, the time or times when Options or Stock
Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any
Option or Stock Award or the Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(v) to
prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign
laws;
(vi) to
allow or require Awardholders to satisfy withholding tax
obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Option or Stock Award that
number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld. The Fair Market Value of
the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All
elections by Awardholders to have Shares withheld for this purpose
shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and
(vii) to
construe and interpret the terms of the Plan and Options granted
pursuant to the Plan.
Effect of Administrator’s Decision
. All decisions,
determinations and interpretations of the Administrator shall be
final and binding on all Awardholders.
5.
Eligibility
. Nonstatutory Stock Options and Stock Awards may be
granted to Service Providers. Incentive Stock Options
may be granted only to Employees.
6.
Limitations .
Incentive Stock Option Limit
. Each Option shall be
designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Awardholder
during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For p
