Exhibit 10.1
FUNDAMENTAL SOFTWARE,
INC.
2000 STOCK OPTION/STOCK
ISSUANCE PLAN
ARTICLE ONE
GENERAL
PROVISIONS
This 2000 Stock Option/Stock
Issuance Plan is intended to promote the interests of Fundamental
Software, Inc., a Delaware corporation, by providing eligible
persons in the Corporation’s employ or service with the
opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Corporation as an
incentive for them to continue in such employ or
service.
Capitalized terms herein shall have
the meanings assigned to such terms in the attached
Appendix.
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II.
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STRUCTURE OF
THE PLAN
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A. The Plan shall be divided into
two (2) separate equity programs:
(i) the Option Grant Program under
which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common
Stock, and
(ii) the Stock Issuance Program
under which eligible persons may, at the discretion of the Plan
Administrator, be issued shares of Common Stock directly, either
through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or
Subsidiary).
B. The provisions of Articles One
and Four shall apply to both equity programs under the Plan and
shall accordingly govern the interests of all persons under the
Plan.
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III.
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ADMINISTRATION OF THE PLAN
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A. The Plan shall be administered by
the Board. However, any or all administrative functions otherwise
exercisable by the Board may be delegated to the Committee. Members
of the Committee shall service for such period of time as the Board
may determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously
delegated to the Committee.
B. The Plan Administrator shall have
full power and authority (subject to the provisions of the Plan) to
establish such rules and regulations as it may deem appropriate for
proper administration of the Plan and to make such determinations
under, and issue such interpretations of, the Plan and any
outstanding options or stock issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall
be final and binding on all parties who have an interest in the
Plan or any option grant or stock issuance thereunder.
A. The persons eligible to
participate in the Plan are as follows:
(i) Employees,
(ii) non-employee members of the
Board or the non-employee members of the board of directors of any
Parent or Subsidiary, and
(iii) consultants and other
independent advisors who provide services to the Corporation (or
any Parent or Subsidiary).
B. The Plan Administrator shall have
full authority to determine, (i) with respect to the grants
made under the Option Grant Program, which eligible persons are to
receive such grants, the time or times when those grants are to be
made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to
become exercisable, the vesting schedule (if any) applicable to the
option shares and the maximum term for which the option is to
remain outstanding, and (ii) with respect to stock issuances
made under the Stock Issuance Program, which eligible persons are
to receive such issuances, the time or times when those issuances
are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the issued
shares and the consideration to be paid by the Participant for such
shares.
C. The Plan Administrator shall have
the absolute discretion either to grant options in accordance with
the Option Grant Program or to effect stock issuances in accordance
with the Stock Issuance Program.
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V.
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STOCK
SUBJECT TO THE PLAN
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A. The stock issuable under the Plan
shall be shares of authorized but unissued or reacquired Common
Stock. The maximum number of shares of Common Stock which may be
issued over the term of the Plan shall not exceed 1,800,000
shares.
B. Shares of Common Stock subject to
outstanding options shall be available for subsequent issuance
under the Plan to the extent (i) the options expire or
terminate for any reason prior to exercise in full or (ii) the
options are cancelled in accordance with the cancellation-regrant
provisions of Article Two. Unvested shares issued under the Plan
and subsequently repurchased by the Corporation, at the option
exercise or direct issue price paid per share, pursuant to the
Corporation’s repurchase rights under the Plan
shall be added back to the number of shares of
Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the
Plan.
C. Should any change be made to the
Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration,
appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan and
(ii) the number and/or class of securities and the exercise
price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The
adjustments determined by the Plan Administrator shall be final,
binding and conclusive. In no event shall any such adjustments be
made in connection with the conversion of one or more outstanding
shares of the Corporation’s preferred stock into shares of
Common Stock.
ARTICLE TWO
OPTION GRANT
PROGRAM
Each option shall be evidenced by
one or more documents in the form approved by the Plan
Administrator; provided , however, that each such document
shall comply with the terms specified below. Each document
evidencing an Incentive Option shall, in addition, be subject to
the provisions of the Plan applicable to such options.
A. Exercise Price
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1. The exercise price per share
shall be fixed by the Plan Administrator in accordance with the
following provisions:
(i) The exercise price per share
shall not be less than eighty-five percent (85%) of the Fair
Market Value per share of Common Stock on the option grant
date.
(ii) If the person to whom the
option is granted is a 10% Stockholder, then the exercise price per
share shall not be less than one hundred ten percent (110%) of
the Fair Market Value per share of Common Stock on the option grant
date.
2. The exercise price shall become
immediately due upon exercise of the option and shall, subject to
the provisions of Section I of Article Four and the documents
evidencing the option, be payable in cash or check made payable to
the Corporation. Should the Common Stock be registered under
Section 12 of the 1934 Act at the time the option is
exercised, then the exercise price may also be paid as
follows:
(i) in shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date, or
(ii) to the extent the option is
exercised for vested shares, through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions (A) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased shares
and remit to the Corporation, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and
(B) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale.
Except to the extent such sale and
remittance procedure is utilized, payment of the exercise price for
the purchased shares must be made on the Exercise Date.
B. Exercise and Term of
Options . Each option shall be exercisable at such time or
times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents
evidencing the option grant. However, no option shall have a term
in excess of ten (10) years measured from the option grant
date.
C. Effect of Termination of
Service .
1. The following provisions shall
govern the exercise of any options held by the Optionee at the time
of cessation of Service or death:
(i) Should the Optionee cease to
remain in Service for any reason other than death, Disability or
Misconduct, then the Optionee shall have a period of three
(3) months following the date of such cessation of Service
during which to exercise each outstanding option held by such
Optionee.
(ii) Should Optionee’s Service
terminate by reason of Disability, then the Optionee shall have a
period of twelve (12) months following the date of such
cessation of Service during which to exercise each outstanding
option held by such Optionee.
(iii) If the Optionee dies while
holding an outstanding option, then the personal representative of
his or her estate or the person or persons to whom the option is
transferred pursuant to the Optionee’s will or the laws of
inheritance or the Optionee’s designated beneficiary or
beneficiaries of that option shall have a twelve (12)-month period
following the date of the Optionee’s death to exercise such
option.
(iv) Under no circumstances,
however, shall any such option be exercisable after the specified
expiration of the option term.
(v) During the applicable
post-Service exercise period, the option may not be exercised in
the aggregate for more than the number of vested shares for which
the option is exercisable on the date of the Optionee’s
cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for
any vested shares for which the option has not been exercised.
However, the option shall, immediately upon the Optionee’s
cessation of Service, terminate and cease to be outstanding with
respect to any and all option shares for which the option is not
otherwise at the time exercisable or in which the Optionee is not
otherwise at that time vested.
(vi) Should Optionee’s Service
be terminated for Misconduct or should Optionee otherwise engage in
Misconduct while holding one or more outstanding options under the
Plan, then all those options shall terminate immediately and cease
to remain outstanding.
2. The Plan Administrator shall have
the discretion, exercisable either at the time an option is granted
or at any time while the option remains outstanding, to:
(i) extend the period of time for
which the option is to remain exercisable following
Optionee’s cessation of Service or death from the limited
period otherwise in effect for that option to such greater period
of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) permit the option to be
exercised, during the applicable post-Service exercise period, not
only with respect to the number of vested shares of Common Stock
for which such option is exercisable at the time of the
Optionee’s cessation of Service but also with respect to one
or more additional installments in which the Optionee would have
vested under the option had the Optionee continued in
Service.
D. Stockholder Rights
. The holder of an option shall have no stockholder rights with
respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become the
recordholder of the purchased shares.
E. Unvested Shares .
The Plan Administrator shall have the discretion to grant options
which are exercisable for unvested shares of Common Stock. Should
the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The
terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document
evidencing such repurchase right. The Plan Administrator may not
impose a vesting schedule upon any option grant or the shares of
Common Stock subject to that option which is more restrictive than
twenty percent (20%) per year vesting, with the initial
vesting to occur not later than one (1) year after the option
grant date. However, such limitation shall not be applicable to any
option grants made to individuals who are officers of the
Corporation, non-employee Board members or independent
consultants.
F. First Refusal
Rights . Until such time as the Common Stock is first
registered under Section 12 of the 1934 Act, the Corporation
shall have the right of first refusal with respect to any proposed
disposition by the Optionee (or any successor in interest) of any
shares of Common Stock issued under the Plan. Such right of first
refusal shall be exercisable in accordance with the terms
established by the Plan Administrator and set forth in the document
evidencing such right.
G. Limited Transferability of
Options . An Incentive Stock Option shall be exercisable
only by the Optionee during his or her lifetime and shall not be
assignable or transferable other than by will or by the laws of
inheritance following the Optionee’s death. A Non-Statutory
Option may be assigned in whole or in part during the
Optionee’s lifetime to one or more members of the
Optionee’s family or to a trust established exclusively for
one or more such family members or to Optionee’s former
spouse, to the extent such assignment is in connection with the
Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the Non-Statutory
Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth
in such documents issued to the assignee as the Plan Administrator
may deem appropriate. Notwithstanding the foregoing, the Optionee
may also designate one or more persons as the beneficiary or
beneficiaries of his or her outstanding options under the Plan, and
those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement
evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be
exercised following the Optionee’s death.
The terms specified below shall be
applicable to all Incentive Options. Except as modified by the
provisions of this Section II, all the provisions of Articles One,
Two and Four shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options shall
not be subject to the terms of this Section II.
A. Eligibility .
Incentive Options may only be granted to Employees.
B. Exercise Price .
The exercise price per share shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.
C. Dollar Limitation .
The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any
other option plan of the Corporation or any Parent or Subsidiary)
may for the first time become exercisable as Incentive Options
during any one (1) calendar year shall not exceed the sum of
One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such
options are granted.
D. 10% Stockholder .
If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the option term shall not exceed five
(5) years measured from the option grant date.
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III.
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CORPORATE
TRANSACTION
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A. The shares subject to each option
outstanding under the Plan at the time of a Corporate Transaction
shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Corpo