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Exhibit 10
NATIONAL LAMPOON, INC.
AMENDED AND RESTATED
1999 STOCK OPTION, DEFERRED STOCK
AND
RESTRICTED STOCK PLAN
(As amended on November 15, 2005)
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS
1.1 This plan is intended to implement and govern the 2002 Stock
Option,
Deferred Stock and Restricted Stock Plan (as amended, the
"Plan") of J2
Communications, Inc. a California corporation (the "Company").
The plan was
originally adopted by the Board of Directors as of October 14,
1999 subject to
the approval of the Company's shareholders and the Plan was
amended and restated
by the Board of Directors as of January 30, 2002 subject to the
approval of the
Company's shareholders. The purpose of the Plan is to enable the
Company and its
Subsidiaries to obtain and retain competent personnel who will
contribute to the
Company's success by their ability, ingenuity and industry, and
to provide
incentives to such personnel and members that are linked
directly to increases
in shareholder value, and will therefore, inure to the benefit
of all
shareholders of the Company.
1.2 For purposes of the Plan, the following terms shall be
defined as set
forth below:
(a) "Administrator" means the Board, or if the Board does
not
administer the Plan, the Committee in accordance with Section
2.
(b) "Award" means any award of Deferred Stock, Restricted Stock,
or
Stock Option.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from
time to time, or any successor thereto.
(e) "Committee" means the Compensation Committee of the Board,
or
any other Committee the Board may subsequently appoint to
administer the Plan.
If at any time the Board shall administer the Plan, then the
functions of the
Board specified in the Plan shall be exercised by the
Committee.
(f) "Company" means J2 Communications, a corporation organized
under
the laws of the State of California (or any successor
corporation).
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(g) "Covered Security" means any security listed under
Subsection
(b) of Section 18 of the Securities Act of 1933, as amended, or
defined as such
pursuant to the Rules and Regulations of the SEC.
(h) "Deferred Stock" means an award made pursuant to Section 7
below
of the right to receive Stock at the end of a specified deferral
period.
(i) "Disability" means permanent and total disability as
determined
under the Company's disability program or policy.
(j) "Effective Date" shall mean the date provided pursuant
to
Section 18.
(k) "Eligible Employee" means an employee, officer,
director,
consultant or advisor of the Company, any Subsidiary or Parent
Corporation
eligible to participate in the Plan pursuant to Section 4.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as
amended.
(m) "Fair Market Value" means, as of any given date, with
respect to
any Awards granted hereunder, at the discretion of the
Administrator and subject
to such limitations as the Administrator may impose, (A) the
closing sale price
of the Stock on such date as reported in the Western Edition of
the Wall Street
Journal Composite Tape, or (B) the average of the closing price
of the Stock on
each day on which the Stock was traded over a period of up to
twenty trading
days immediately prior to such date, or (C) the fair market
value of the Stock
as otherwise determined by the Administrator in the good faith
exercise of its
discretion.
(n) "Incentive Stock Option" means any Stock Option intended to
be
designated as an "Incentive Stock Option" within the meaning of
Section 422 of
the Code.
(o) "Non-Qualified Stock Option" means any Stock Option that is
not
an Incentive Stock Option, including any Stock Option that
provides (as of the
time such option is granted) that it will not be treated as an
Incentive Stock
Option.
(p) "Parent Corporation" means any corporation (other than
the
Company) in an unbroken chain of corporations ending with the
Company, if each
of the corporations other than the Company owns stock possessing
50% or more of
the total combined voting power of all classes of stock in one
of the other
corporations in the chain.
(q) "Participant" means any Eligible Employee selected by
the
Administrator pursuant to the Administrator's authority in
Section 2 below, to
receive grants of Stock Options or Awards or any combination of
the foregoing.
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(r) "Restricted Period" means the period set by the
Administrator as
it pertains to Deferred Stock or Restricted Stock Awards
pursuant to Section 7.
(s) "Restricted Stock" means an award of shares of Stock
granted
pursuant to Section 7 subject to restrictions that will lapse
with the passage
of time or upon the attainment of performance objectives.
(t) "Stock" means the Common Stock, no par value per share, of
the
Company.
(u) "SEC" means the Securities and Exchange Commission.
(v) "Stock Appreciation Rights" ("SAR") means a stock
appreciation
right granted alone or in tandem with a Stock Option pursuant to
Article 6.
(w) "Stock Option" means an option to purchase shares of
Stock
granted pursuant to Section 5; and with respect to SARs, also
includes options
to purchase shares of Stock granted pursuant to Other Plans.
(x) "Subsidiary" means any corporation (other than the Company)
in
an unbroken chain of corporations beginning with the Company, if
each of the
corporations (other than the last corporation) in the unbroken
chain owns stock
possessing 50% or more of the total combined voting power of all
classes of
stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION
2.1 The Plan shall be administered by the Board or by a
Committee
appointed by the Board, which shall serve at the pleasure of the
Board;
provided, however, that if the Committee does not consist solely
of
"Non-Employee Directors," as defined in Rule 16b-3 as
promulgated by the SEC
under the Exchange Act, as such Rule may be amended from time to
time, or any
successor definition adopted by the Commission, then the Plan
shall be
administered, and each grant shall be approved, by the
Board.
2.2 The Administrator shall have the power and authority to
grant to
Eligible Employees, pursuant to the terms of the Plan: (A) Stock
Options, (B)
Deferred Stock, (C) Restricted Stock, (D) Stock Appreciation
Rights, or (E) any
combination of the foregoing.
In particular, the Administrator shall have the authority:
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(a) to select those employees of the Company or any Subsidiary
or
Parent Corporation who are Eligible Employees;
(b) to determine whether and to what extent Stock Options,
Deferred
Stock, Restricted Stock or a combination of the foregoing, are
to be granted to
Eligible Employees of the Company or any Subsidiary
hereunder;
(c) to determine the number of shares of Stock to be covered by
each
such Award;
(d) to determine the terms and conditions, not inconsistent with
the
terms of the Plan, of any such Award including, but not limited
to, (x) the
restricted period applicable to Deferred Stock or Restricted
Stock Awards, (y)
the date or dates on which restrictions applicable to such
Deferred Stock or
Restricted Stock shall lapse during such period, and (z) when
and in what
increments shares covered by Stock Options may be purchased;
and
(e) to determine the terms and conditions, not inconsistent with
the
terms of the Plan, which shall govern all written instruments
evidencing the
Stock Options, Deferred Stock, Restricted Stock or any
combination of the
foregoing.
2.3 The Administrator shall have the authority, in its
discretion, to
adopt, alter and repeal such administrative rules, guidelines
and practices
governing the Plan as it shall from time to time deem advisable;
to interpret
the terms and provisions of the Plan and any Award issued under
the Plan (and
any agreements relating thereto); and to otherwise supervise the
administration
of the Plan.
2.4 All decisions made by the Administrator pursuant to the
provisions of
the Plan shall be final and binding on all persons, including
the Company, any
Subsidiaries, Parent Corporation and the Participants.
SECTION 3. STOCK SUBJECT TO PLAN
3.1 The total number of shares of Stock reserved and available
for
issuance under the Plan shall be Six Million Seven Hundred
Sixty-Seven Thousand
Four Hundred Forty-Six (6,767,446) shares. Such shares shall
consist of
authorized but unissued shares.
3.2 To the extent that (i) a Stock Option expires or is
otherwise
terminated without being exercised or (ii) any shares of Stock
subject to any
Deferred Stock or Restricted Stock Award granted hereunder are
forfeited, such
shares shall again be available for issuance in connection with
future Awards
under the Plan. If any shares of Stock have been pledged as
collateral for
indebtedness incurred by a Participant in connection with the
exercise of a
Stock Option and such shares are returned to the Company in
satisfaction of such
indebtedness, such shares shall again be available for issuance
in connection
with future Awards under the Plan.
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3.3 In the event of any merger, reorganization,
consolidation,
recapitalization, stock dividend, or other change in corporate
structure
affecting the Stock, a substitution or adjustment may be made in
(i) the
aggregate number of shares reserved for issuance under the Plan,
and (ii) the
kind, number and option price of shares subject to outstanding
Stock Options
granted under the Plan as may be determined by the
Administrator, in its sole
discretion. Such other substitutions or adjustments shall be
made as may be
determined by the Administrator, in its sole discretion;
provided, however, that
with respect to Incentive Stock Options, such adjustment shall
be made in
accordance with Section 424 of the Code.
SECTION 4. ELIGIBILITY
Officers and other key employees, directors and consultants and
advisors
of the Company, any Subsidiary or Parent Corporation who are
responsible for or
contribute to the management, growth and/or profitability of the
business of the
Company, shall be eligible to be granted Non- Qualified Stock
Options and
Deferred Stock or Restricted Stock Awards hereunder. Officers
and other key
employees of the Company, any Subsidiary or Parent Corporation
shall also be
eligible to be granted Incentive Stock Options hereunder. The
Participants under
the Plan shall be selected from time to time by the
Administrator, in its sole
discretion, from among the Eligible Employees recommended by the
senior
management of the Company, and the Administrator shall
determine, in its sole
discretion, the number of shares covered by each Award. No
Participant shall be
granted, in any calendar year, Awards to purchase more than
500,000 shares of
Stock.
SECTION 5. STOCK OPTIONS FOR ELIGIBLE EMPLOYEES
5.1 Stock Options may be granted to Eligible Employees alone or
in
addition to other Awards granted under the Plan. Any Stock
Option granted under
the Plan shall be in such form as the Administrator may from
time to time
approve, and the provisions of Stock Option awards need not be
the same with
respect to each optionee. Recipients of Stock Options shall
enter into a stock
option agreement with the Company, in such form as the
Administrator shall
determine, which agreement shall set forth, among other things,
the exercise
price, the term, and provisions regarding exercisability of the
option granted
thereunder.
The Stock Options granted under the Plan to Eligible Employees
may
be of two types: (x) Incentive Stock Options and (y)
Non-Qualified Stock
Options.
5.2 The Administrator shall have the authority under this
Section 5 to
grant any optionee Incentive Stock Options, Non-Qualified Stock
Options, or both
types of options; provided, however, that Incentive Stock
Options may not be
granted to any individual who is not an employee of the Company,
its
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Subsidiaries or Parent Corporation. To the extent that any Stock
Option does not
qualify as an Incentive Stock Option, it shall constitute a
separate
Non-Qualified Stock Option. More than one option may be granted
to the same
optionee and be outstanding concurrently hereunder.
5.3 Stock Options granted under the Plan shall be subject to the
following
terms and conditions and shall contain such additional terms and
conditions, not
inconsistent with the terms of the Plan, as the Administrator
shall deem
desirable:
(a) Option Price. The option price per share of Stock
purchasable
under an Incentive Stock Option shall be determined by the
Administrator in its
sole discretion at the time of grant but shall be not less than
100% of the Fair
Market Value of the Stock on such date, and shall not, in any
event, be less
than the par value of the Stock. The option price per share of
Stock purchasable
under a Non-Qualified Stock Option may not be less than 85% of
such Fair Market
Value. If an employee owns or is deemed to own (by reason of the
attribution
rules applicable under Section 424(d) of the Code) more than 10%
of the combined
voting power of all classes of stock of the Company or any
Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such
employee, the option
price of such Incentive Stock Option (to the extent required by
the Code at the
time of grant) shall be no less than 110% of the Fair Market
Value of the Stock
on the date such Incentive Stock Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by
the
Administrator, but no Stock Option shall be exercisable more
than ten years
after the date such Stock Option is granted; provided, however,
that if an
employee owns or is deemed to own (by reason of the attribution
rules of Section
424(d) of the Code) more than 10% of the combined voting power
of all classes of
stock of the Company or any Parent Corporation or Subsidiary and
an Incentive
Stock Option is granted to such employee, the term of such
Incentive Stock
Option (to the extent required by the Code at the time of grant)
shall be no
more than five years from the date of grant.
(c) Exercisability. Stock Options shall be exercisable at such
time
or times and subject to such terms and conditions as shall be
determined by the
Administrator at or after grant; provided, however, that, except
as provided
herein or unless otherwise determined by the Administrator at or
after grant,
Stock Options shall be exercisable one year following the date
of grant of the
option, but in no case, less than six (6) months following the
date of the grant
of the option. To the extent not exercised, installments shall
accumulate and be
exercisable in whole or in part at any time after becoming
exercisable but not
later than the date the Stock Option expires. The Administrator
may provide, in
its discretion, that any Stock Option shall be exercisable only
in installments,
and the Administrator may waive such installment exercise
provisions at any time
in whole or in part based on such factors as the Administrator
may determine in
its sole discretion.
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(d) Method of Exercise. Subject to Section 5(c) above, Stock
Options
may be exercised in whole or in part at any time during the
option period, by
giving written notice of exercise to the Company specifying the
number of shares
to be purchased, accompanied by payment in full of the purchase
price in cash or
its equivalent, as determined by the Administrator. As
determined by the
Administrator, in its sole discretion, payment in whole or in
part may also be
made (A) in the form of unrestricted Stock (if held for at least
six [6] months)
already owned by the optionee, or (B) by cancellation of any
indebtedness owed
by the Company to the optionee, (C) by a full recourse
promissory note executed
by the optionee, (D) through the surrender of shares of Stock
then issuable upon
exercise of the Stock Option having a Fair Market Value on the
date of exercise
thereof equal to the aggregate exercise price of the Stock
Option exercised or
portion thereof, or (E) by any combination of the foregoing;
provided, however,
that in the case of an Incentive Stock Option, the right to make
payment in the
form of already owned shares may be authorized only at the time
of grant. Any
payment in the form of Stock already owned by the optionee may
be effected by
use of an attestation form approved by the Administrator. An
optionee shall
generally have the rights to dividends and other rights of a
shareholder with
respect to shares subject to the option only after the optionee
has given
written notice of exercise, has paid in full for such shares,
and, if requested,
has given the representation described in paragraph (a) of
Section 11.
5.4 The Administrator may require the voluntary surrender of all
or a
portion of any Stock Option granted under the Plan as a
condition precedent to a
grant of a new Stock Option. Subject to the provisions of the
Plan, such new
Stock Option shall be exercisable at the price, during such
period and on such
other terms and conditions as are specified by the Administrator
at the time the
new Stock Option is granted; provided, however, that should the
Administrator so
require, the number of shares subject to such new Stock Option
shall not be
greater than the number of shares subject to the surrendered
Stock Option. Upon
their surrender, the Stock Options shall be canceled and the
shares previously
subject to such canceled Stock Options shall again be available
for grants of
Stock Options and other Awards hereunder.
5.5 Loans. The Company may make loans available to Stock Option
holders in
connection with the exercise of outstanding options granted
under the Plan, as
the Administrator, in its discretion, may determine. Such loans
shall (i) be
evidenced by full recourse promissory notes entered into by the
Stock Option
holders in favor of the Company, (ii) be subject to the terms
and conditions set
forth in this Section 5(e) and such other terms and conditions,
not inconsistent
with the Plan, as the Administrator shall determine, (iii) bear
interest, if
any, at such rate as the Administrator shall determine and (iv)
be subject to
Board approval. In no event may the principal amount of any such
loan exceed the
sum of (x) the exercise price less the par value of the shares
of Stock covered
by the option, or portion thereof, exercised by the holder and
(y) any Federal,
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state, and local income tax attributable to such exercise. The
initial term of
the loan, the schedule of payments of principal and interest
under the loan and
the conditions upon which the loan will become payable in the
event of the
holder's termination of employment shall be determined by the
Administrator;
provided, however, that the term of the loan, including
extensions, shall not
exceed seven years. Unless the Administrator determines
otherwise, when a loan
is made, shares of Stock having a Fair Market Value at least
equal to the
principal amount of the loan shall be pledged by the holder to
the Company as
security for payment of the unpaid balance of the loan, and such
pledge shall be
evidenced by a pledge agreement, the terms of which shall be
determined by the
Administrator, in its discretion; provided, however, that each
loan shall comply
with all applicable laws, regulations and rules of the Board of
Governors of the
Federal Reserve System and any other governmental agency having
jurisdiction,
and provided further that in the case of a loan to an Eligible
Employee who is
not an officer, director or employee of the Company, the loan
shall be secured
by adequate collateral other than the shares of Stock
acquired.
5.6 Limits on Transferability of Options. No Stock Option shall
be
transferable by the optionee otherwise than by will or by the
laws of descent
and distribution, and all Stock Options shall be exercisable,
during the
optionee's lifetime, only by the optionee.
5.7 Termination by Death. Except as otherwise determined by
the
Administrator or
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