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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
BOARD
"Board"
means the Board of Directors of the Company.
2.2
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.
2.3
CODE
"Code"
means the Internal Revenue Code of 1986, as amended from time
to
time.
2.4 COMMON
STOCK
"Common
Stock" means the common stock, no par value, of the Company.
2.5
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;
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(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.
2.6
DISABILITY
"Disability" means "permanent and total disability" as that term
is
defined for purposes of Section 22(e)(3) of the Code.
2.7
EXCHANGE ACT
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
2.8 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.
2.9 GOOD
REASON
"Good
Reason" means the occurrence of any one of the following events,
in
the event that the Optionee (i) has given the Successor Corporation
written
notice of such occurrence and the Successor Corporation has failed
to cure such
event within thirty (30) days, and (ii) Optionee resigns within
sixty (60) days
following the expiration of such thirty-day period:
(a) relocation of the Optionee 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 Optionee's compensation
package,
unless such a reduction is made by the Company ratably with all
other employees
at similar levels of responsibility.
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2.10 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.
2.11
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.
2.12
NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common
Stock
granted under Section 7 other than an Incentive Stock Option.
2.13
OPTION
"Option"
means the right to purchase Common Stock granted under Section
7.
2.14
OPTIONEE
"Optionee"
means (i) the person to whom an Option is granted; (ii) for an
Optionee who has died, the personal representative of the
Optionee's estate, the
person(s) to whom the Optionee's rights under the Option 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 Option
has been transferred in accordance with Section 9.
2.15 PLAN
ADMINISTRATOR
"Plan
Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.16
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.
2.17
SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.18
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.
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2.19
SUCCESSOR CORPORATION
"Successor
Corporation" has the meaning set forth under Section 10.2.
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 Options under the Plan, including
the
selection of individuals to be granted Options, the type of
Options, the number
of shares of Common Stock subject to an Option, all terms,
conditions,
restrictions and limitations, if any, of an Option and the terms of
any
instrument that evidences the Option. 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 2,440,466 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.
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4.2 REUSE
OF SHARES
Any shares
of Common Stock that have been made subject to an Option but
that cease to be subject to the Option (other than by reason of
exercise of the
Option to the extent it is exercised for shares) shall again be
available for
issuance in connection with future grants of Options under the
Plan.
SECTION 5. ELIGIBILITY
Options
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. Options may also be made to consultants,
agents, advisors,
and independent contractors who provide services to the Company and
its
Subsidiaries.
SECTION 6. AWARDS
6.1 FORM
AND GRANT OF OPTIONS
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 and/or Nonqualified Stock
Options.
Options may be granted singly or in combination.
6.2
ACQUIRED COMPANY OPTION AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Options 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
Option 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 Optionees.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS
7.1 GRANT
OF OPTIONS
The Plan
Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as
Nonqualified Stock
Options, which shall be appropriately designated.
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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
100% of the
Fair Market Value of the Common Stock on the Grant Date with
respect to
Incentive Stock Options.
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 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 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 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
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-------------------------------
After 6 months
25%
Each three-month period of continuous
An additional 6.25%
service completed thereafter
After 3 1/2 years
100%
To the
extent that the right to purchase shares has accrued thereunder,
an
Option 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 Option is being
exercised and
accompanied by payment in full as described in Section 7.5. Subject
to the
provisions of this Plan, an Option 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 Optionee holds vested Options 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
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Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, by
attestation) Common Stock already owned by the Optionee 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 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.
7.6
POST-TERMINATION EXERCISES
The Plan
Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be
exercisable, and
the terms and conditions of such exercise, if an Optionee 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 Optionee'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 Optionee at the date of
such
termination, only (a) within one year if the termination of the
Optionee's
employment or services is coincident with Retirement or Disability
or (b) within
three months after the date the Optionee ceases to be an employee,
director,
officer, consultant, agent, advisor or independent contractor of
the Company or
a Subsidiary if termination of the Optionee'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
Optionee's death may be exercised, to the extent of the number of
shares
purchasable by the Optionee at the date of the Optionee's death, by
the personal
representative of the Optionee's estate, the person(s) to whom the
Optionee'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 Optionee's
employment or
services shall terminate on such date, unless the Plan
Administrator determines
otherwise. In case of termination of the Optionee's employment or
services for
Cause, the Option shall automatically terminate upon first
notification to the
Optionee of such termination, unless the Plan Administrator
determines
otherwise. If a Optionee's employment or services with the Company
are suspended
pending an investigation of whether the Optionee shall be
terminated for Cause,
all the Optionee's rights under any Option likewise shall be
suspended during
the period of investigation.
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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 Optionee 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 deemed
to continue beyond the first 90 days of a leave of absence unless
the Optionee'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 Optionee that is expected to
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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 Optionee 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 Optionee 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. An
Optionee may be subject to the alternative minimum tax at the time
of exercise
of an Incentive Stock Option. The Plan Administrator may require an
Optionee 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 Optionee other than by will or by the applicable
laws of
descent and distribution, and, during the Optionee's lifetime, such
Option may
be exercised only by the Optionee or a permitted assignee or
transferee of the
Optionee (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 an Optionee to designate a beneficiary who may exercise the
Option after
the Optionee'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
shareholde
