Exhibit 10.1
EXACTTARGET, INC. 2004
STOCK OPTION PLAN
ExactTarget, Inc.
("Company") hereby establishes the ExactTarget, Inc. 2004
Stock Option Plan ("Plan"), effective July 14,
2004.
ARTICLE 1.
GENERAL PROVISIONS
Section 1.01. Approval
and Application. This Plan was approved by the Company's
Board of Directors by unanimous written consent, contingent on
approval by the Company's shareholders within 12 months
following its adoption by the Board. It was approved by the
requisite percentage of the Company's shareholders by written
consent within such 12-month period. This Plan, in addition to
governing Stock Options granted hereunder, shall govern all options
granted to employees of the Company's predecessor, ExactTarget,
LLC, that became options of the Company on July 14, 2004
(which options account for 2,444,392 of the aggregate number of
Common Shares with respect to which Stock Options may be granted
hereunder, as specified in Section 5.01 hereof), and
revised option agreements reflecting this fact shall be entered
into between the grantees of those prior options and the
Company.
Section 1.02. Description.
The Plan is designed to
promote the interests of the Company and its shareholders by
providing a means by which the Board can award stock options to
designated employees and directors of the Company or any
Subsidiary. The Plan permits the Board to grant Incentive Stock
Options and Non-Qualified Stock Options as provided
herein.
Section 1.03. Purpose.
The purpose of the Plan is
to further the growth, development, and financial success of the
Company by providing for stock-based incentives intended to
(i) attract and retain key employees and directors,
(ii) motivate those employees and directors to use their best
efforts on behalf of the Company, and (iii) more closely align
the interests of those employees and directors with those of the
Company's shareholders.
ARTICLE 2.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 2.01. Definitions.
Whenever used herein,
capitalized terms shall have the meanings indicated
below:
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(a) "Agreement"
means an agreement between an Optionee and the Company setting out
the terms of a Stock Option award.
(b) "Board"
or "Board of Directors" means the Company's Board of Directors, as
constituted from time to time.
(c) "Cause"
means, with respect to an Optionee, that the Board has made a good
faith determination that one or more of the following has occurred:
(i) the Optionee's material breach of the terms of his
employment (continuing for 10 days after receipt of written
notice of the need to cure); (ii) the Optionee's gross
negligence or willful misconduct in the performance or intentional
non-performance (continuing for 10 days after receipt of
written notice of the need to cure) of any of the material duties
under the Optionee's employment agreement; (iii) the
Optionee's dishonesty, fraud, or misconduct with respect to the
business or affairs of the Employer (monetarily or otherwise);
(iv) the Optionee's conviction of (or entry of a plea
of nolo condentere with respect to) a felony or a lesser crime involving moral
turpitude; or (v) the Optionee's chronic alcohol abuse or
illegal drug abuse that is determined by the Board following a
reasonable investigation to materially impair the Optionee's
ability to perform his duties and responsibilities.
(d) "Code"
means the Internal Revenue Code of 1986, as amended from time to
time.
(e) "Committee"
means the compensation committee of the Board; provided, however,
during any period in which there is not a properly constituted
compensation committee, the term "Committee" means the
Board.
(f) "Common
Share" means a share of the Company's common stock.
(g) "Company"
means ExactTarget, Inc.
(h) "Director"
means a director of the Company or a Subsidiary who is not also an
Employee.
(i) "Disability"
means, with respect to an Optionee, the Optionee's inability due to
physical or mental illness or injury to carry out effectively his
duties and obligations to the Employer or to participate
effectively and actively in the management of the Employer for a
period of at least six consecutive months, as determined in the
reasonable judgment of the Board.
(j) "Employee"
means any individual employed by the Employer as a common law
employee, including an officer or employee who is also a member of
the Board of Directors or the board of directors of a
Subsidiary.
(k) "Employer"
means the Company and/or any Subsidiary.
(l) "Exercise
Price" means the purchase price established by the Committee for
exercising a Stock Option. With respect to a Prior Option, the
Exercise Price is the purchase price resulting from the conversion
of units in the Predecessor Employer to Common Shares.
(m) "Fair
Market Value" means, with respect to a Common Share as of a
particular date, the value of a Common Share as determined by the
Committee on a basis consistent with applicable regulations under
the Code.
(n) "Grant
Date" means the effective date of the grant of a Stock Option. With
respect to a Prior Option, the Grant Date is the effective date of
the grant of the Prior Option.
(o) "Incentive
Stock Option" means a stock option that satisfies the requirements
of Code Section 422.
(p) "Non-Qualified
Stock Option" means a stock option that does not satisfy the
requirements of Code Section 422.
(q) "Optionee"
means an Employee or Director to whom a Stock Option has been
granted; provided, however, an Optionee shall cease to be such at
such time as all Options granted to him have expired or been
exercised or forfeited.
(r) "Plan"
means the Exact Target, Inc. 2004 Stock Option Plan, as set
forth in this document, as amended from time to time.
(s) "Predecessor
Employer" means ExactTarget, LLC.
(t) "Prior
Option" means an option granted by the Predecessor Employer that
became an option for Common Shares on July 14,
2004.
(u) "Retirement"
means, in the case of an Employee, Termination of Service for any
reason other than Disability or death on or after the day on which
the Employee has both completed 10 years of employment with
the Company and reached age 60.
(v) "Securities
Act" means the Securities Act of 1933, as amended from time to
time.
(w) "Stock
Option" means an Incentive Stock Option or Non-Qualified Stock
Option granted pursuant to the Plan or an option issued by the
Predecessor Employer that is governed by the Plan.
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(x) "Subsidiary"
means any company (other than the Company) that is a subsidiary
within the meaning of Code Section 424.
(y) "10%
Shareholder" means an individual who owns stock representing more
than 10% of the total combined voting power of all classes of stock
of the Company or any parent or Subsidiary.
(z) "Terminates
Service", "Termination of Service" or "Service is Terminated"
means, (i) in the case of an Employee, a complete termination
of the employment relationship between the Employee and the
Employer and, (ii) in the case of a Director, termination of
service as a Director.
Section 2.02. Rules of
Construction. The
following rules shall apply in construing the Plan and any
Agreement:
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(a) Words
used in the masculine gender shall be construed to include the
feminine gender, where appropriate, and words used in the singular
or plural shall be construed as being in the plural or singular,
where appropriate.
(b) The
Plan and any Agreement shall be construed, enforced, and
administered and the validity thereof determined in accordance with
the laws of the State of Indiana without regard to conflict of law
principles.
(c) Provisions
of the Plan applicable to Incentive Stock Options shall be
construed to effect compliance with Code
Section 422.
(d) Headings
are used for convenience only, and they shall not affect the
construction of this Plan or any Agreement.
(e) If
a court of competent jurisdiction holds any provision invalid and
unenforceable, the remaining provisions of the Plan shall continue
in effect, provided that the essential economic terms of the Plan
and any Agreement can still be enforced.
(f) Reference
to any provision of the Code or other law shall be deemed to
include a reference to the successor of such provision.
ARTICLE 3.
ADMINISTRATION
Section 3.01. Committee.
The Plan shall be
administered by the Committee. Any action of the Committee with
respect to the administration of the Plan shall be taken by a
majority vote or written consent. No member of the Committee shall
participate in the grant of a Stock Option to himself; provided,
however, a Committee member may participate in the decision to
grant Stock Options for the same number of Common Shares to all
similarly situated Directors.
Section 3.02. Powers
of the Committee. Subject to the express provisions of
the Plan and any express limitations on its delegated authority,
the Committee is authorized and empowered to (i) designate
those persons eligible to receive Stock Options, (ii) grant
Stock Options, (iii) determine the Grant Date of each Stock
Option grant, the number of Common Shares subject to the grant, and
the other terms and conditions of the grant, which terms and
conditions need not be the same for each grant, (iv) interpret
the Plan, (v) determine the Fair Market Value of the Common
Shares, (vi) accelerate the time during which a Stock Option
may be exercised, notwithstanding any provisions of an Agreement to
the contrary, (vii) prescribe, amend, and rescind
rules relating to the Plan, (viii) authorize any person
to execute on behalf of the Company any instrument required to
effectuate a grant, (ix) determine the rights and obligations
of Optionees under the Plan, (x) determine the
terms
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and provisions of each Agreement under the Plan
(which Agreements need not be identical), including the designation
of those Stock Options intended to be Incentive Stock Options,
(xi) revise the Exercise Price, or otherwise amend or modify
the terms, of any existing Stock Options with the consent of the
Optionee, and (xii) make all other determinations deemed
necessary or advisable for the administration of the
Plan.
Section 3.03. Binding
Determinations. Any action taken by, or inaction of,
the Company, the Board, or the Committee relating or pursuant to
the Plan (including, without limitation, any determination of Fair
Market Value) shall be within the sole discretion of that entity or
body and shall be conclusive and binding on all persons. Subject
only to compliance with the express provisions hereof, the Board
and the Committee may act in their sole discretion on all matters
within their authority relating to the Plan.
Section 3.04. Delegation.
The Committee may delegate
ministerial non-discretionary functions to one or more Company
officers or employees.
Section 3.05. Limitation
of Liability. No
director, officer, or agent of the Company shall be liable for any
act, omission, or decision under the Plan that is taken, made, or
omitted in good faith.
ARTICLE 4.
ELIGIBILITY
The Committee
shall, from time to time, designate those persons eligible to
receive Stock Option grants from among key Employees and Directors;
provided, however, Incentive Stock Options may be granted only to
Employees. The Committee may make more than one grant to any
person.
ARTICLE 5.
COMMON SHARES SUBJECT TO AWARDS
Section 5.01. Shares
Available. The
only shares subject to Stock Options shall be the Company's
authorized, but unissued, or reacquired Common Shares. The
aggregate number of Common Shares with respect to which Stock
Options may be granted, including Prior Options, is 3,557,624. If a
Stock Option under the Plan expires, or for any reason is
terminated or unexercised with respect to any Comm
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