Exhibit 10.16

 

CSI EQUITY INCENTIVE PLAN

 

SECTION ONE

PURPOSE

 

The purpose of the CSI Equity Incentive Plan (the “Plan”) is to provide a means
whereby Computer Software Innovations, Inc., a South Carolina corporation (the
“Corporation”), may attract able persons to remain in or to enter the employ of
the Corporation, and to provide a means whereby those employees, officers, and
other individuals or entities upon whom the responsibilities of the successful
administration, management, planning, and/or organization of the Corporation may
rest, and whose present and potential contributions to the welfare of the
Corporation are of importance, can acquire and maintain stock ownership, thereby
strengthening their concern for the long-term welfare of the Corporation. A
further purpose of the Plan is to provide such employees and individuals or
entities with additional incentive and reward opportunities designed to enhance
the profitable growth of the Corporation over the long-term. Accordingly the
Plan provides for granting Stock Options as is best suited to the circumstances
of the particular employees and individuals or entities as provided herein.

 

SECTION TWO

DEFINITIONS

 

The following definitions shall be applicable during the term of the Plan unless
specifically modified by any paragraph:

 

a) Change of Control Value means the amount determined in the following clauses:
(i), (ii) or (iii), whichever is applicable: ( i) the price per share offered to
shareholders of the Corporation in any merger, consolidation, sale of assets or
dissolution transaction, (ii) the price per share offered to shareholders of the
Corporation in any tender offer or exchange offer whereby a Corporate Change
(defined below) takes place or (iii) if a Corporate Change occurs other than as
described in Clause (i) or Clause (ii), the fair market value per share
determined by the shareholders as of the date determined by the shareholders to
be the date of cancellation and surrender of an Option. If the consideration
offered to shareholders of the Corporation in any transaction described in
Paragraph (d) of Section Eight consists of anything other than cash, the
shareholders shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.

 

b) Code means the Internal Revenue Code of 1986, as amended. Reference in the
Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations under such section.

 

c) Common Stock means the common stock of the Corporation.

 

d) Corporation means Computer Software Innovations, Inc.

 

e) Corporate Change means one of the following events: (i) the merger,
consolidation or other reorganization of the Corporation; (ii) the lease or
exchange of all or substantially all of the assets of the Corporation to any
other corporation or entity; (iii) the adoption by the shareholders of the
Corporation of a plan of liquidation and dissolution; (iv) the acquisition by
any person of beneficial ownership, of more than twenty-five percent (25%)
(based on voting power) of the Corporation’s outstanding capital stock.

 

f) Designated Officer means an officer of the Corporation, such as the President
or Chief Financial Officer, who is given authority by the shareholders to grant
options or make stock grants under the Plan.

 

g) Exchange Act means the Securities Exchange Act of 1934, as amended.

 

h) Fair Market Value. Since the stock is not publicly traded, the determination
of the Fair Market Value shall be made by the shareholders in such manner as
they deem appropriate (such determination will be made in good-faith and may be
based on the advice of an independent investment banker or appraiser recognized
to be expert in making such valuations).

 

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i) Grant means individually or collectively any Common Stock granted pursuant to
the Plan.

 

j) Grantee means an employee, officer, or other individual or entity who has
been granted Common Stock pursuant to the Plan.

 

k) Holder means an individual or entity who has been granted an Option.

 

l) Option means any Option granted pursuant to the Plan.

 

m) Option Agreement means a written agreement between the Corporation and an
employee with respect to an Option.

 

n) Plan means the CSI Equity Incentive Plan.

 

SECTION THREE

EFFECTIVE DATE AND DURATION OF THE PLAN

 

The Plan shall be effective as of August 1, 2000. Subject to the provisions of
Section Nine, the Plan shall remain in effect until all Options granted under
the Plan have been fully exercised as to all Shares subject to them, or have
expired by reason of lapse of time and all restrictions imposed upon restricted
stock options have lapsed.

 

SECTION FOUR

ADMINISTRATION

 

The Plan shall be administered by the shareholders and decisions of shareholders
shall be effective if approved by a majority vote of holders of the outstanding
shares of the Corporation. Shareholders shall abstain from participating in and
deciding matters which directly affect their individual ownership interests
under the Plan. The shareholders are authorized to construe and interpret the
Plan and the respective agreements executed thereunder, to prescribe such rules
and regulations relating to the Plan as they may deem advisable to carry out the
Plan, and to determine the terms, restrictions and provisions of each Option or
Grant.

 

SECTION FIVE

GRANT OF OPTIONS AND STOCK SUBJECT TO THE PLAN

 

a) Option Limits. The total number of shares issuable upon exercise of all
outstanding Options shall not exceed a number of shares which is equal to twenty
percent (20%) of the then outstanding shares of the Corporation. Any of such
shares which remain unissued and which are not subject to outstanding Options
and/or Grants at the termination of the Plan shall cease to be subject to the
Plan. Shares shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Option or Grant. To the
extent that an Option or Grant lapses or the rights of its Holder or Grantee
terminate, any shares of Common Stock subject to such Option or Grant shall
again be available for the grant of an Option or making of a Grant. The
aggregate number of shares which may be issued under the Plan shall be subject
to adjustment in the same manner as provided in Section Eight of the Plan with
respect to shares of Common Stock subject to Options then outstanding. Separate
stock certificates shall be issued by the Corporation for those shares acquired
pursuant to a Grant or Option.

 

b) Stock Offered. The stock to be offered pursuant to an Option or Grant may be
authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Corporation.

 

SECTION SIX

ELIGIBILITY

 

An Award of an Option may be made to an individual who, at the time of the
Award, is an employee of the Corporation, and has been identified by the
shareholders or Designated Officer to receive an Option or Grant due to his/her
contribution or service to the Corporation, including shareholders of the
Corporation. Each Option or Grant shall be evidenced by a written agreement duly
executed by or on behalf of the Corporation and the Holder of the Option. Each
agreement shall provide that as a condition of exercising any Option granted
under the Plan, the Holder shall agree to enter into and be bound by the
agreement in force at the time of such exercise among the Corporation and its
shareholders relating to the repurchase by the Corporation of its outstanding
Shares in certain circumstances.

 

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SECTION SEVEN

STOCK OPTIONS/GRANTS

 

a) Stock Option Agreement. Each Option shall be evidenced by an Option Agreement
between the Corporation and the Holder which shall contain such terms and
conditions as may be approved by the shareholders and agreed upon by the Holder.
The terms and conditions of the respective Option Agreements need not be
identical. Each Option Agreement shall specify the effect of termination of
employment, total and permanent disability, retirement or death on the
exercisability of the Option. Under each Option Agreement, a Holder shall have
the right to appoint any individual or legal entity in writing as his/her
beneficiary under the Plan in the event of his/her death. Such designation may
be revoked in writing by the Holder at any time and a new beneficiary may be
appointed in writing on the form provided by the shareholders for such purpose.
In the absence of such appointment, the beneficiary shall be the legal
representative of the Holder’s estate.

 

b) Option Period. The term of each Option shall be as specified by the
shareholders at the date of the Grant and shall be stated in the Option
Agreement; provided, however, that an Option may not be exercised more than one
hundred twenty (120) months from the date it is granted unless the Option Period
is extended in writing at the discretion of the shareholders.

 

c) Limitations on Exercise of Option. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
shareholders and as shall be permissible under the terms of the Plan, which
shall be specified in the Option Agreement evidencing the Option.

 

d) Option Price. The purchase price of Common Stock issued under each Option
shall be determined by the shareholders and shall be stated in the Option
Agreement.

 

e) Non-Qualified Stock Option Purchase Agreement. At the election of the Holder,
the Option can be exercised provided that the Holder shall, as a condition of
such exercise, execute and deliver the Non-Qualified Stock Option Purchase
Agreement ( the “Purchase Agreement”), pursuant to which the Corporation shall
be granted a “Repurchase Option” and “Right of First Refusal” as to all “Shares”
(as such terms are defined in the Purchase Agreement).

 

SECTION EIGHT

RECAPITALIZATION OR REORGANIZATION

 

a) Except as hereinafter otherwise provided, Options or Grants shall be subject
to adjustment by the shareholders at their discretion as to the number and price
of shares of Common Stock in the event of changes in the outstanding Common
Stock by reason of reclassifications, recapitalizations, reorganizations,
mergers, consolidations, or other relevant changes in capitalization occurring
after the date of the grant of any such Options or Common Stock.

 

b) The existence of the Plan and the Options and/or Grants made hereunder shall
not affect in any way the right or power of the shareholders of the Corporation
to make or authorize any adjustment, recapitalization, reorganization or other
change in the capital structure of the Corporation.

 

c) The shares with respect to which Options may be granted are shares of Common
Stock as presently constituted. If and whenever, prior to the expiration of an
Option theretofore granted, the Corporation shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Corporation, then in the
discretion of the shareholders, the number of shares of Common Stock with
respect to which such Option may thereafter be exercised (i) in the event of an
increase in the number of outstanding shares shall be proportionately increased,
and the purchase price per share shall be proportionately reduced, and (ii) in
the event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased.

 

d) If the Corporation recapitalizes or otherwise changes its capital structure,
then the shareholders have the discretion thereafter upon any exercise of an
Option theretofore granted, to allow the Holder to purchase under such Option,
in lieu of the number of shares of Common Stock as to which such Option shall
then be exercisable, the number and class of shares of stock and securities, and
the cash and other property to which the Holder would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to such
recapitalization, the Holder has been the holder of such record of the number of
shares of Common Stock then covered by such Option.

 

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SECTION NINE

AMENDMENT OR TERMINATION OF THE PLAN

 

The shareholders in their discretion may terminate the Plan or any Option or
Grant or alter or amend the Plan or any part thereof or any Option from time to
time; provided that no change in any Option or Grant previously made may be made
which would impair the rights of the Holder or Grantee without the consent of
the Holder or Grantee.

 

SECTION TEN

OTHER

 

a) No Employment Rights Conferred. Nothing contained in the Plan or in any
Option or Grant made hereunder shall (i) confer upon any employee any right with
respect to continuation of employment with the Corporation, or (ii) interfere in
any way with the right of the Corporation to terminate any employee’s employment
at any time.

 

b) Other Laws; Withholding. The Corporation shall have the right to deduct in
connection with all Options and Grants any taxes required by law to be withheld
and to require any payments necessary to enable it to satisfy its withholding
obligations. The shareholders may permit the Holder of an Option or Grant to
elect to surrender, or authorize the Corporation to withhold shares of Common
Stock (valued at their Fair Market Value on the date of surrender or withholding
of such shares) in satisfaction of the Corporation’s withholding obligation,
subject to such restrictions as the shareholders deem necessary to satisfy the
requirements of Rule 16b-3.

 

c) Securities Law Restrictions. If the shareholders at any time determine that
registration or qualification of the Shares or any Option under state or Federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable, then the Option may not be exercised, in whole or in
part, until such registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the
shareholders and any person exercising an Option to purchase Shares may be
required by the Corporation to give a written representation that he/she is
acquiring such Shares for his/her own account for investment and not with a view
to the distribution of such Shares.

 

d) No Restriction of Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Corporation from taking any corporate action which is
deemed by the Corporation to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any Option granted
under the Plan. No employee, beneficiary or other person shall have any claim
against the Corporation as a result of such action.

 

e) Proceeds. The proceeds received by the Corporation from the sale of Shares
pursuant to the Plan will be used for general Corporation purposes.

 

f) Restrictions on Transfer. An Option shall not be transferable except by
testamentary will or the laws of descent and distribution, and shall be
exercisable during the lifetime of the Holder only by such Holder or the
Holder’s guardian or legal representative. Except as permitted by the preceding
sentence, no Option granted under the Plan or any of the rights and privileges
thereby conferred shall be transferred, assigned, pledged, or hypothecated in
any way (whether by operation of law or otherwise), and no such Option, right or
privilege shall be subject to execution, attachment, or similar process. Upon
any attempt so to transfer, assign, pledge, hypothecate, or otherwise dispose of
the Option, or of any right or privilege conferred thereby, contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
such Option, right, or privilege, the Option and such rights and privileges
shall immediately become null and void.

 

g) Effect of Death, Disability, Retirement or other Termination of Employment.
The Option Agreement or other written instrument evidencing an Option shall
specify the effect of the death, disability, retirement or other termination of
employment of the Holder on the Option. In the event the Holder retires from
employment, the Holder shall be entitled to exercise his/her Option within three
(3) months from the date of termination of employment with the Corporation. In
the event the Holder’s termination is caused by his/her death or disability, the
Holder shall be entitled to exercise his/her Option within one (1) year from the
date of termination of employment with the Corporation. If the Holder’s
employment is terminated for any other reason, Holder’s right to exercise
his/her Option expires on the date of the termination.

 

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h) Information to Employees. Holders and Grantees under the Plan shall receive
financial statements annually regarding the Corporation during the period the
Options are outstanding.

 

i) Governing Law. The Plan shall by construed in accordance with the laws of the
State of South Carolina and all applicable Federal law. The securities issued
hereunder shall be governed by and in accordance with the Corporate Securities
Laws of the State of South Carolina.

 

ADOPTED AND APPROVED BY COMPUTER SOFTWARE INNOVATION’S SHAREHOLDERS AS OF AUGUST
1, 2000.

 

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