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EXHIBIT 10.4
PRIMUS KNOWLEDGE SOLUTIONS, INC.
1999 AMENDED AND RESTATED NONOFFICER EMPLOYEE
STOCK COMPENSATION PLAN
SECTION 1. PURPOSE
The
purpose of the Primus Knowledge Solutions, Inc. 1999 Nonofficer
Employee Stock Compensation Plan (the
"Plan") is to enhance the long-term
shareholder value of Primus Knowledge
Solutions, Inc., a Washington corporation
(the "Company"), by offering opportunities
to selected persons to participate in
the Company's growth and success, and to
encourage them to remain in the service
of the Company and its Related Corporations
(as defined in Section 2) 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:
"AWARD"
means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of
Stock Awards and Options, or any
combination of the foregoing.
"BOARD"
means the Board of Directors of the Company.
"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,
and its determination shall be
conclusive and binding.
"CODE"
means the Internal Revenue Code of 1986, as amended from time
to
time.
"COMMON
STOCK" means the common stock, par value $.025 per share, of
the
Company.
"CORPORATE
TRANSACTION" means any of the following events:
(a)
Consummation of any merger or consolidation of the Company with
or
into another corporation; or
(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
defined in Section 8.3) of the
Company.
"DISABILITY," unless otherwise defined by the Plan Administrator,
means 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, to perform his or her duties
for the Company or a Related
Corporation and to be engaged in any
substantial gainful activity.
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"EFFECTIVE
DATE" has the meaning set forth in Section 15.
"EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended.
"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
Fair Market Value.
"GRANT
DATE" means the date on which the Plan Administrator completes
the
corporate action relating to the grant of
an Award and all conditions precedent
to the grant have been satisfied, provided
that conditions to the exercisability
or vesting of Awards shall not defer the
Grant Date.
"OPTION"
means an option to purchase Common Stock granted under Section
7
that is not intended to qualify as an
incentive stock option as that term is
defined in Section 422 of the Code.
"OPTION
TERM" has the meaning set forth in Section 7.3.
"PARENT"
means any entity, whether now or hereafter existing, that
directly or indirectly controls the
Company.
"PARTICIPANT" means (a) the person to whom an Award is granted; (b)
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 10; or (c) the person(s) to
whom an Award has been transferred in
accordance with Section 10.
"PLAN
ADMINISTRATOR" means the Board or any committee or committees
designated by the Board or any person to
whom the Board has delegated authority
to administer the Plan under Section
3.1.
"RELATED
CORPORATION" means any Parent or Subsidiary of the Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK
AWARD" means shares of Common Stock or units denominated in
Common
Stock granted under Section 8, the rights
of ownership of which may be subject
to restrictions prescribed by the Plan
Administrator.
"SUBSIDIARY" means any entity that is directly or indirectly
controlled by
the Company.
"SUCCESSOR
CORPORATION" has the meaning set forth in Section 11.3.
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"TERMINATION DATE" has the meaning set forth in Section 7.6.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan
shall be administered by the Board and/or a committee or
committees (which term includes
subcommittees) appointed by, and consisting of
two or more members of, the Board (a "Plan
Administrator"). 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. To the extent consistent
with applicable law, the Board may
authorize a senior executive officer of the
Company to grant Awards to specified
eligible persons, within the limits
specifically prescribed by the Board.
3.2 ADMINISTRATION AND
INTERPRETATION BY 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 the terms of any
instrument evidencing the Award 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 11.1, the
number of shares of Common Stock that shall
be available for issuance under the
Plan shall be 2,000,000 shares.
No more
than 30% of the Shares authorized for issuance under the Plan
may
be issued to officers or directors of the
Company.
Shares
issued under the Plan shall be drawn from authorized and
unissued
shares or shares now held or subsequently
acquired by the Company.
4.2 REUSE OF SHARES
Any shares
of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other
than by reason of exercise or payment of
the Award to the extent it is
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exercised for or settled in vested and
nonforfeitable 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 any individual who, at the time of
the grant is an employee, director,
consultant, agent, advisor, or independent
contractor who provides services to the
Company or its Related Corporations;
provided, however, that such Participants
render bona fide services that are not
in connection with the offer and sale of
the Company's securities in a
capital-raising transaction and do not
directly or indirectly promote or
maintain a market for the Company's
securities.
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 include, but are not limited to Options
and Stock Awards. Awards may be
granted singly or in combination.
6.2 SETTLEMENT OF AWARDS
The
Company may settle Awards through the delivery of shares of
Common
Stock, cash payments, the granting of
replacement Awards or any combination
thereof as the Plan Administrator shall
determine. Any Award settlement,
including payment deferrals, may be subject
to such conditions, restrictions and
contingencies as the Plan Administrator
shall determine. The Plan Administrator
may permit or require the deferral of any
Award payment, subject to such rules
and procedures as it may establish, which
may include provisions for the payment
or crediting of interest, or dividend
equivalents, including converting such
credits into deferred stock equivalents.
The Plan Administrator may at any time
offer to buy out, for a payment in cash or
Common Stock, an Award previously
granted based on such terms and conditions
as the Plan Administrator shall
establish and communicate to the
Participant at the time such offer is made.
6.3 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.
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SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan
Administrator is authorized under the Plan, in its sole
discretion, to issue Options.
7.2 OPTION EXERCISE PRICE
The
exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but
shall not be less than 85% of the Fair
Market Value of the Common Stock on the
Grant Date.
7.3 TERM OF OPTIONS
The term
of each Option (the "Option Term") shall be as established by
the
Plan Administrator or, if not so
established, shall be ten years from the Grant
Date.
7.4 EXERCISE OF OPTIONS
The Plan
Administrator shall establish and set forth in each instrument
that evidences an Option the time at which,
or the installments in which, the
Option shall vest and become exercisable,
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 shall vest and become exercisable
according to the following schedule, which
may be waived or modified by the Plan
Administrator at any time:
<TABLE>
<CAPTION>
PERIOD OF PARTICIPANT'S
CONTINUOUS
EMPLOYMENT OR SERVICE WITH THE COMPANY
OR ITS RELATED CORPORATIONS FROM
THE
PERCENT OF TOTAL OPTION
OPTION GRANT DATE
THAT IS VESTED AND EXERCISABLE
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<S>
<C>
After 1 year
25%
Each additional one-month period
of
continuous service completed thereafter
An additional 1/48
After 4 years
100%
</TABLE>
The Plan
Administrator may adjust the vesting schedule of an Option held
by a Participant who works less than
"full-time" as that term is defined by the
Plan Administrator.
To the
extent that an Option has vested and become exercisable, the
Option
may be exercised from time to time by
delivery to the Company of a written stock
option exercise agreement or notice, in a
form and in accordance with procedures
established by the Plan Administrator,
setting forth the number of shares with
respect to which the Option is being
exercised, the restrictions imposed on the
shares purchased under such exercise
agreement, if any, and such representations
and agreements as may be required by the
Plan Administrator, accompanied by
payment in full as described in Section
7.5. An Option may not be exercised as
to less than a reasonable number of shares
at any one time, as determined by the
Plan Administrator.
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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, in any
combination of
(a) cash
or check;
(b)
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)
shares of 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 Fair
Market Value on the day prior to the
exercise date equal to the aggregate Option
exercise price;
(c) 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; or
(d) such
other consideration as the Plan Administrator may permit.
In
addition, to assist a Participant (includ
