Document:

exv10w2

 

EXHIBIT 10.2

STOCK OPTION AGREEMENT

     THIS AGREEMENT is dated as of ___, 20___(the “Date of Grant”) and is made by and
between PFSWEB, INC., a Delaware corporation (hereinafter
referred to as “Company”) and the
individual whose name and signature appear on the signature page hereof (hereinafter referred to as
“Holder”):

     WHEREAS, the Company wishes to evidence the issuance to the Holder of the Options set forth
herein, subject to, and in accordance with, the terms and provisions of the Company’s Stock Option
Plan (as amended and/or restated from time to time, the “Plan”) (the terms of which are hereby
incorporated by reference and made a part of this Agreement); and

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

I. DEFINITIONS

     Except as otherwise defined herein, terms defined in the Plan shall have the same meaning when
used herein.

II. GRANT OF OPTION

     2.1 Grant of Option. For good and valuable consideration, effective as of the Date of Grant,
the Company hereby grants to the Holder the option to purchase any part or all of the number of
shares of the Company’s Common Stock, $.001 par value (the “Common Stock”) set forth on the
signature page hereof, subject to and upon the terms and conditions set forth in the Plan and this
Agreement.

     2.2 Purchase Price. The purchase price per share of the shares of Common Stock covered by the
Option shall be                      ($___) (the “Purchase Price”), without commission or other charge.

     2.3 Consideration to Company. In consideration of the granting of this Option by the Company,
the Holder agrees to render faithful and efficient services to the Company, a Parent Corporation or
a Subsidiary, with such duties and responsibilities as the Company shall from time to time
prescribe. Nothing in this Agreement or in the Plan shall confer upon the Holder any right to
continue in the employ of the Company, any Parent Corporation or any Subsidiary or shall interfere
with or restrict in any way the rights of the Company, its Parent Corporation and its Subsidiaries,
which are hereby expressly reserved, to discharge the Holder at any time for any reason whatsoever,
with or without cause.

     2.4 Adjustments in Option. In the event that the outstanding shares of Common Stock subject to
the Option are increased, decreased, changed into or exchanged

 

 

for a different number or kind of shares of the Company or other securities of the Company by
reason of merger, consolidation, recapitalization, reclassification, stock split up, spin-off,
stock dividend or combination of shares or other recapitalization or reorganization, the Committee
shall make an appropriate and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable. Such adjustment in the Option
shall be made without change in the total price applicable to the unexercised portion of the Option
(except for any change in the aggregate price resulting from rounding-off of share quantities or
prices) and with any necessary corresponding adjustment in the Option price per share; provided,
however, that, with respect to Incentive Stock Options, each such adjustment shall be made in such
manner as not to constitute a “modification” within the meaning of Section 424(h)(3) of the Code.
Any such adjustment made by the Committee shall be final and binding upon the Holder, the Company
and all other interested persons.

     2.5 Incentive Stock Option. Subject to the provisions of Section 7.7 of the Plan, this Option
shall be deemed an “incentive stock option” under the Code unless otherwise designated as a
Non-qualified Option on the signature page hereof.

III. PERIOD OF EXERCISABILITY

     3.1 Commencement of Exercisability.

          (a) The Option shall vest in installments in accordance with the terms and provisions of the
vesting schedule attached to the signature page hereto and incorporated herein.

          (b) Except as otherwise set forth in the Plan, no portion of the Option which is unexercisable
at Termination of Employment shall thereafter become exercisable.

     3.2 Duration of Exercisability. The installments provided for in Section 3.1 are cumulative.
Each such installment which becomes exercisable pursuant to Section 3.1 shall remain exercisable
until it becomes unexercisable under Section 3.3.

     3.3 Expiration of Option. Subject to the terms and provisions of the Plan, the Option may not
be exercised to any extent by anyone after the first to occur of the following events:

          (i) The expiration of ten (10) years from the Date of Grant;

          (ii) With respect to an Incentive Stock Option, if the Holder owned (within the meaning of
Section 424(d) of the Code), at the time the Option was granted, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company, any Subsidiary or any Parent
Corporation, the expiration of five (5) years from the Date of Grant;

 

 

          (iii) The date of the Holder’s Termination of Employment for any reason, other than death or
disability (within the meaning of Section 22(e)(3) of the Code), unless the Committee otherwise
elects to permit the exercise of such Option for a period of time thereafter; provided, however (a)
such period of time shall end no later than ten years from the Date of Grant, (b) with respect to
Incentive Stock Options, such period of time shall not exceed three months from such Termination of
Employment and (c) the Committee may make such elections in such manner as it deems appropriate,
which may be non-uniform and selective, and based upon such factors as it deems relevant;

          (iv) With respect to an Option held by an Holder who is disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of one year from the date of the Holder’s Termination
of Employment for any reason other than death, unless the Holder dies within said one-year period;

          (v) The expiration of one year from the date of the Holder’s death with respect to all Options
held by such Holder; and

          (vi) With respect to all Options, and notwithstanding any other provision contained herein,
the date of the Holder’s Termination of Employment in the event such Termination is for “cause”.

     3.4 Acceleration of Exercisability. In the event of the merger or consolidation of the Company
with or into another corporation, or the acquisition by another corporation or person of all or
substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then
outstanding voting stock, or the liquidation or dissolution of the Company, the Committee may, in
its absolute discretion and upon such terms and conditions as it deems appropriate, provide by
resolution, adopted prior to such event, that at some time prior to the effective date of such
event this Option shall be exercisable as to all the shares covered hereby, notwithstanding that
this Option may not yet have become fully exercisable under Section 3.1(a); provided, however, that
the Committee, in its sole discretion, may forego this acceleration of exercisability if:

          (i) This Option becomes unexercisable under Section 3.3 prior to said effective date; or

          (ii) In connection with such an event, provision is made for an assumption of this Option or a
substitution therefor of a new option by an employer corporation or a parent or subsidiary of such
corporation, so that such assumption or substitution complies with the provisions of Section 424(a)
of the Code.

          The Committee may make such determinations and adopt such rules and conditions as it, in its
absolute discretion, deems appropriate in connection with such acceleration of exercisability,
including, but not by way of limitation, provisions to ensure that any such acceleration and
resulting exercise shall be conditioned upon the consummation of the contemplated corporate
transaction, and determinations regarding

 

 

whether provisions for assumption or substitution have been made as defined in clause (ii) above.

     3.5 Limitation on Exercisability. Notwithstanding any other provision of this Agreement, to
the extent that the aggregate fair market value (determined at the time the Incentive Stock Option
is granted) of the shares of the Company’s stock with respect to which “incentive stock options”
(within the meaning of Section 422 of the Code) are exercisable for the first time by the Holder
during any calendar year (under the Plan and all other incentive stock option plans of the Company,
any Subsidiary and any Parent Corporation) exceeds $100,000, such Options shall be treated as
Non-Qualified Options. For purposes of this Section, Options shall be taken into account in the
order in which they were granted.

IV. EXERCISE OF OPTION

     4.1 Person Eligible to Exercise. During the lifetime of the Holder, only he or she may
exercise the Option or any portion thereof. After the death of the Holder, any exercisable portion
of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be
exercised by his or her personal representative or by any person empowered to do so under the
Holder’s will or under the then applicable laws of descent and distribution. Notwithstanding the
foregoing, the Committee may, in its sole discretion, permit the transfer of any Non-Qualified
Option, in whole or in part, and the exercise thereof by any transferee thereof.

     4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to the time when the
Option or portion thereof becomes unexercisable under Section 3.3; provided, however, that each
partial exercise shall be for not less than one-hundred (100) shares (or the minimum installment
set forth in Section 3.1, if a smaller number of shares) and shall be for whole shares only.

     4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following (except as otherwise
waived by such officer) prior to the time when the Option or such portion becomes unexercisable
under Section 3.3:

          (a) Notice in writing signed by the Holder or the other person then entitled to exercise the
Option or portion, stating that the Option or portion is thereby exercised, such notice complying
with all applicable rules established by the Committee; and

          (b) (i) Full payment (in cash or by check) for the shares with respect to which such Option or
portion is exercised; or

               (ii) With the consent of the Committee, (A) shares of the Company’s Common Stock owned by the
Holder duly endorsed for transfer to the Company

 

 

or (B) subject to the requirements of Section 5.4 of the Plan, shares of the Company’s Common Stock
issuable to the Holder upon exercise of the Option, in each case, with a fair market value (as
determined under Section 4.2(b) of the Plan) on the date of Option exercise equal to the aggregate
Option price of the shares with respect to which such Option or portion is thereby exercised; or

               (iii) With the consent of the Committee, a promissory note duly executed and delivered by the
Holder in the principal amount of the exercise price thereof, or any portion thereof, in each case
upon such terms and conditions (including without limitation, terms regarding rates of interest,
payment schedule, collateral or other security) as the Committee may establish in its sole and
absolute discretion; or

               (iv) With the consent of the Committee, any combination of the consideration provided in the
foregoing subsections (i), (ii) and (iii);

          (c) A bona fide written representation and agreement, in a form satisfactory to the Committee,
signed by the Holder or other person then entitled to exercise such Option or portion, stating that
the shares of stock are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may be permitted under
the Securities Act and then applicable rules and regulations thereunder, and that the Holder or
other person then entitled to exercise such Option or portion will indemnify the Company against,
and hold it free and harmless from, any loss, damage, expense or liability resulting to the Company
if any sale or distribution of the shares by such person is contrary to the representation and
agreement referred to above. The Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to insure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act and any other federal
or state securities laws or regulations. Without limiting the generality of the foregoing, the
Committee may require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired upon exercise of an Option does not violate the Securities Act, and may
issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on
exercise of this Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and agreement referred to in
the first sentence of this subsection (c) shall, however, not be required if the shares to be
issued pursuant to such exercise have been registered under the Securities Act, and such
registration is then effective in respect of such shares; and

          (d) Full payment to the Company (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the Option; provided,
however, with the consent of the Committee, any combination of the consideration provided in the
foregoing subsections (i), (ii) and (iii) of the preceding paragraph (b) may be used to make all or
part of such payment; and

 

 

          (e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any
person or persons other than the Holder, appropriate proof of the right of such person or persons
to exercise the Option.

     4.4 Conditions to Issuance of Stock Certificates. The shares of stock deliverable upon the
exercise of the Option, or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. Such shares shall be fully
paid and nonassessable. The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of the Option or portion thereof prior
to fulfillment of all of the following conditions (except as otherwise waived by the Committee):

          (a) The admission of such shares to listing on all stock exchanges on which such class of
stock is then listed; and

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Committee shall, in its absolute discretion, deem
necessary or advisable; and

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be necessary or
advisable; and

          (d) The payment to the Company (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the Option; and

          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative convenience.

     4.5 Rights as a Shareholder. The holder of the Option shall not be, nor have any of the rights
or privileges of, a shareholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing such shares shall
have been issued by the Company to such holder.

V. OTHER PROVISIONS

     5.1 Administration. The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and
all interpretations and determinations made by the Committee in good faith shall be final and
binding upon the Holder, the Company and all other interested persons. No member of the Committee
shall be personally liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Option.

 

 

     5.2 Option not Transferable. Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Holder or his successors in
interest or shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or
by operation of law by judgment, levy, attachment, garnishment of any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void
and of no effect; provided, however, that this Section 5.2 shall not prevent transfers by will or
by the applicable laws of descent and distribution. Notwithstanding the foregoing, the Committee
may, in its discretion, permit the holder of any Non-Qualified Option to transfer such Option, or
any portion thereof, to such holder’s spouse, lineal descendent or trust established for the
benefit thereof or any other person or entity.

     5.3 Shares to be Reserved. The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be sufficient to satisfy the
requirements of this Agreement.

     5.4 Notices. Any notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its Secretary, and any notice to be given to the Holder shall
be addressed to him or her at the address given beneath his or her signature hereto. By a notice
given pursuant to this Section 5.4, either party may hereafter designate a different address for
notices to be given to such party. Any notice which is required to be given to the Holder shall, if
the Holder is then deceased, be given to the Holder’s personal representative if such
representative has previously informed the Company of his status and address by written notice
under this Section 5.4. Any notice shall be deemed duly given upon receipt and shall be delivered
by hand, reputable overnight courier or deposited (with postage prepaid) in a post office or branch
post office regularly maintained by the United States Postal Service.

     5.5 Titles. Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

     5.6 Terms of the Plan. All of the terms and provisions of the Plan are incorporated herein by
reference as if fully set forth at length herein, and the Holder acknowledges receipt and review of
the Plan. In the event of any conflict or inconsistency between the Plan and the terms set forth
herein, the same shall be determined and interpreted by the Committee, whose determination and
interpretation shall be final and binding in all respects and upon all interested persons.

     5.7 Notification of Disposition. The Holder shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired upon exercise of this Option if such
disposition or transfer is made (a) within two (2) years from the date of grant of the Option with
respect to such shares so exercised or (b) within one (1) year after the exercise of the Option
with respect to such shares. Such notice shall specify the date of such disposition or other
transfer and the amount realized, in cash, other
property, assumption of indebtedness or other consideration, by the Holder in such disposition or
other transfer.

***********exv10w3

 

EXHIBIT 10.3

PFSWEB, INC.

2005 EMPLOYEE STOCK PURCHASE PLAN

     WHEREAS, PFSweb, Inc., a Delaware corporation (the “Company”) has adopted that certain 2000
Employee Stock Purchase Plan (as amended to date, the “2000 Plan”); and

     WHEREAS, the Company has authorized and adopted certain amendments to the 2000 Plan;

     NOW, THEREFORE,, in order to implement and effectuate said amendments, the 2000 Plan is hereby
amended and restated as follows:

ARTICLE I

BACKGROUND

     1.1 Establishment of the Plan. The Company hereby establishes a stock purchase plan
to be known as the “PFSweb, Inc. 2005 Employee Stock Purchase Plan” (the “Plan”), as set forth in
this document. The Plan is intended to be a qualified employee stock purchase plan within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended, and the regulations and
rulings thereunder.

     1.2 Applicability of the Plan. The provisions of this Plan are applicable only to
certain individuals who, on or after the Effective Date (as defined herein), are employees of the
Company and its Subsidiaries participating in the Plan. The Committee shall indicate from time to
time which of its Subsidiaries, if any, are participating in the Plan.

     1.3 Purpose. The purpose of the Plan is to enhance the proprietary interest among
the employees of the Company and its participating Subsidiaries through ownership of Common Stock
of the Company.

ARTICLE II

DEFINITIONS

     As used herein, the following terms shall have the respective meanings set forth below.

     2.1 Administrator. Administrator shall mean the person or persons (who may be officers
or employees of the Company) selected by the Committee to operate the Plan, perform day-to-day
administration of the Plan, and maintain records of the Plan.

     2.2 Board. Board shall mean the Board of Directors of the Company.

     2.3 Code. Code shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations thereunder.

     2.4 Committee. Committee shall mean the committee of the Board described in Article III.

     2.5 Common Stock. Common Stock shall mean the common stock of the Company.

     2.6 Company. Company shall mean PFSweb, Inc., a Delaware corporation.

     2.7 Compensation. Compensation shall mean, for any Participant, for any Offering
Period, the Participant’s gross base wages for the respective period, including salary and
commissions where applicable, but does not include items such as bonuses, overtime pay, non-cash
compensation and reimbursement of moving, travel, trade or business expenses.

     2.8 Contribution Account. Contribution Account shall mean the bookkeeping account
established by the Administrator on behalf of each Participant, which shall be credited with the
amounts

 

 

deducted from the Participant’s Compensation pursuant to Section 4.2 or Article VII. The
Administrator shall establish a separate Contribution Account for each Participant for each
Offering Period.

     2.9 Effective Date. Effective Date shall mean the date following the approval of the
Plan by the stockholders of the Company which is the earlier of (i) the date upon which there are
no longer any shares available for purchase under the 2000 Plan or (ii) January 1, 2006.

     2.10 Eligible Employee. An Employee eligible to participate in the Plan pursuant to
Section 4.1.

     2.11 Employee. Employee shall mean an individual employed by an Employer who meets the
employment relationship described in Treasury Regulation Sections 1.423-2(b) and Section
1.421-7(h).

     2.12 Employer. Employer shall mean the Company and any Subsidiary designated from time
to time by the Committee as an employer participating in the Plan.

     2.13 Fair Market Value. Fair Market Value of a share of Common Stock, as of any
designated date, shall mean the closing sales price of the Common Stock on the Nasdaq National
Market or Small Cap Market on such date or on the last previous date on which such stock was
traded.

     2.14 Offering Date. Offering Date shall mean the first Trading Date of each Offering
Period.

     2.15 Offering Period. Offering Period shall mean the period of time during which
offers to purchase Common Stock are outstanding under the Plan. The Committee shall determine the
length of each Offering Period, which need not be uniform; provided that no Offering Period shall
exceed twenty-four (24) months in length. Unless specified otherwise by the Committee, the Offering
Periods will be the 3-month periods beginning January 1, April 1, July 1 and October 1 of each
year. No voluntary payroll deductions shall be solicited until after the effective date of a
registration statement on Form S-8 filed under the Securities Act of 1933, as amended, covering the
shares to be issued under the Plan.

     2.16 Option. Option shall mean the option to purchase Common Stock granted under the
Plan on each Offering Date.

     2.17 Participant. Participant shall mean any Eligible Employee who has elected to
participate in the Plan under Section 4.2.

     2.18 Plan. Plan shall mean the PFSweb, Inc. 2005 Employee Stock Purchase Plan, as
amended and in effect from time to time.

     2.19 Purchase Date. Purchase Date shall mean the last Trading Date of each Offering
Period.

     2.20 Purchase Price. Purchase Price shall mean the purchase price of Common Stock
determined under Section 6.1.

     2.21 Request Form. Request Form shall mean an Employee’s authorization either in
writing on a form approved by the Administrator or through electronic communication approved by the
Administrator which specifies the Employee’s payroll deduction in accordance with Section 7.2, and
contains such other terms and provisions as may be required by the Administrator.

     2.22 Stock Account. Stock Account shall mean the account established by the
Administrator on behalf of each Participant, which shall be credited with shares of Common Stock
purchased pursuant to the Plan and dividends thereon (which may be reinvested in shares of Common
Stock), until such shares are distributed in accordance with Article VIII of the Plan.

     2.23 Subsidiary. Subsidiary shall mean any present or future corporation which is a
“subsidiary corporation” of the Company as defined in Code Section 424(f).

 

 

     2.24 Trading Date. Trading Date shall mean a date on which shares of Common Stock are
traded on the Nasdaq National Market or Small Cap Market or any other national securities exchange.

     Except when otherwise indicated by the context, the definition of any term herein in the
singular may also include the plural.

ARTICLE III

ADMINISTRATION

     3.1 Committee. The Plan shall be administered by a Committee appointed by the
Board (which Committee shall consist of at least two directors) or, at the discretion of the Board
from time to time, the Plan may be administered by the Board. Unless otherwise designated by the
Board, the Compensation Committee of the Board of Directors of the Company shall serve as the
Committee administering the Plan.

     3.2 Action and Interpretations By the Committee. For purposes of administering
the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures
for carrying out the provisions and purposes of the Plan and make such other determinations, not
inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s determinations
on the foregoing matters shall be conclusive and binding upon all persons. Each member of the
Committee is entitled to, in good faith, rely or act upon any report or other information furnished
to that member by any officer or other employee of the Company or any affiliate, the Company’s or
an affiliate’s independent certified public accountants, Company counsel or any executive
compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.

     3.3 Authority of Committee. Subject to the express provisions of the Plan, the
Committee has the exclusive power, authority and discretion to:

     (a) interpret and construe any and all provisions of the Plan;

     (b) adopt rules and regulations for administering the Plan,;

     (c) make all other determinations necessary or advisable for administering the Plan; and

     (d) adopt such modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of non-U.S. jurisdictions in which the Company or any
participating Subsidiary may operate, in order to assure the viability of the benefits of Awards
granted to Participants located in such other jurisdictions and to meet the objectives of the Plan.

ARTICLE IV

ELIGIBILITY AND PARTICIPATION

     4.1 Eligibility. Subject to such other requirements as the Committee shall
determine, an Eligible Employee is an Employee who is regularly scheduled to work at least 32 hours
each week and has been employed for at least 90 days shall be eligible to participate in the Plan
as of the later of:

     (a) the first Offering Date that occurs following the Employee’s most recent date of hire by
an Employer; or

     (b) the Effective Date.

     On each Offering Date, Options will automatically be granted to all Employees then eligible to
participate in the Plan; provided, however, that no Employee shall be granted an Option for an
Offering Period if, immediately after the grant, the Employee would own stock, and/or hold
outstanding options to purchase stock, possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or any Subsidiary. For purposes of
this Section, the attribution rules of

 

 

Code Section 424(d) shall apply in determining stock ownership of any Employee. If an Employee
is granted an Option for an Offering Period and such Employee does not participate in the Plan for
such Offering Period, such Option will be deemed never to have been granted for purposes of
applying the $25,000 annual limitation described in Section 6.2.

     4.2 Participation. An Eligible Employee having been granted an Option under
Section 4.1 may submit a Request Form to the Administrator to participate in the Plan for such
Offering Period. The Request Form shall authorize a regular payroll deduction from the Employee’s
Compensation for the Offering Period, subject to the limits and procedures described in Article
VII. A Participant’s Request Form authorizing a regular payroll deduction shall remain effective
from Offering Period to Offering Period until amended or canceled under Section 8.1.

     4.3 Leave of Absence. For purposes of Section 4.1, an individual on a leave of
absence from an Employer shall be deemed to be an Employee for the first 90 days of such leave, or
for such longer period of time that his or her entitlement to return to work is protected by
statute or agreement with the Employer, if applicable. For purposes of this Plan, such individual’s
employment with the Employer shall be deemed to terminate at the close of business on the 90th day
of the leave, unless the individual has returned to regular employment with an Employer before the
close of business on such 90th day or his entitlement to return to work is protected by statute or
agreement with the employer. Termination of any individual’s leave of absence by an Employer, other
than on account of a return to employment with an Employer, shall be deemed to terminate an
individual’s employment with the Employer for all purposes of the Plan.

ARTICLE V

STOCK AVAILABLE

     5.1 General. Subject to the adjustments in Sections 5.2 and 5.3, an aggregate of
(i) 2,000,000 shares of Common Stock plus (ii) a number of additional Shares equal to the number of
Shares remaining available for issuance pursuant to the Company’s 2000 Plan as of the Effective
Date, shall be available for purchase by Participants pursuant to the provisions of the Plan. These
shares may be authorized and unissued shares or may be shares issued and subsequently acquired by
the Company. If an Option under the Plan expires or terminates for any reason without having been
exercised in whole or part, the shares subject to such Option that are not purchased shall again be
available for subsequent Option grants under the Plan. If the total number of shares of Common
Stock for which Options are exercised on any Purchase Date exceeds the maximum number of shares
then available under the Plan, the Administrator shall make a pro rata allocation of the shares
available in as nearly a uniform manner as shall be practicable and as it shall determine to be
equitable; and the balance of the cash credited to Participants’ Contribution Accounts shall be
distributed to the Participants as soon as practicable.

     5.2 Adjustment in Event of Changes in Capitalization. In the event of a stock
dividend, stock split or combination of shares, recapitalization or other change in the Company’s
capitalization, or other distribution with respect to holders of the Company’s Common Stock other
than normal cash dividends, an automatic adjustment shall be made in the number and kind of shares
as to which outstanding Options or portions thereof then unexercised shall be exercisable and in
the available shares set forth in Section 5.1, so that the proportionate interest of the
Participants shall be maintained as before the occurrence of such event; provided, however, that in
no event shall any adjustment be made that would cause any Option to fail to qualify as an option
pursuant to an employee stock purchase plan within the meaning of Section 423 of the Code.

     5.3 Dissolution or Liquidation. In the event of a proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Purchase Date (the “New Purchase Date”), and shall terminate immediately prior to the
consummation of the dissolution or liquidation, unless otherwise provided by the Committee. The
Company shall notify each Participant, at least ten (10) days prior to the New Purchase Date, that
the next Purchase Date has been changed to the New Purchase Date and that the Participant’s Option
shall be exercised automatically on the New Purchase Date, unless the Participant has withdrawn
from the Offering Period, as provided in Section 8.1 hereof, prior to the New Purchase Date.

 

 

     5.4 Merger or Asset Sale. In the event of a reorganization, merger, or
consolidation of the Company with one or more corporations in which the Company is not the
surviving corporation (or survives as a direct or indirect subsidiary of such other constituent
corporation or its parent), or upon a sale of substantially all of the property or stock of the
Company to another corporation, then, in the discretion of the Committee, (i) each outstanding
Option shall be assumed, or an equivalent option substituted, by the successor corporation or its
parent, or (ii) the Offering Period then in progress shall be shortened by setting a New Purchase
Date, which shall be before the date of the proposed transaction. If the Committee sets a New
Purchase Date, the Company shall notify each Participant, at least ten (10) days prior to the New
Purchase Date, that the Purchase Date has been changed to the New Purchase Date and that the
Participant’s Option shall be exercised automatically on the New Purchase Date, unless the
Participant has withdrawn from the Offering Period, as provided in Section 8.1 hereof, prior to the
New Purchase Date. In lieu of the foregoing, the Committee may terminate the Plan in accordance
with Section 9.2.

ARTICLE VI

OPTION PROVISIONS

     6.1 Purchase Price. The Purchase Price of a share of Common Stock purchased for a
Participant pursuant to each exercise of an Option shall be the “Designated Percent” of the Fair
Market Value of a share of Common Stock on the Purchase Date. Unless otherwise provided by the
Committee, the “Designated Percent” for purposes of the foregoing sentence is 95 percent (95%). The
Committee may change the Designated Percent for any Offering Period but in no event shall the
Designated Percent be less than 85 percent (85%).

     6.2 Calendar Year $25,000 Limit. Notwithstanding anything else contained herein,
no Employee may be granted an Option for any Offering Period which permits such Employee’s rights
to purchase Common Stock under this Plan and any other qualified employee stock purchase plan
(within the meaning of Code Section 423) of the Company and its Subsidiaries to accrue at a rate
which exceeds $25,000 of Fair Market Value of such Common Stock for each calendar year in which an
Option is outstanding at any time. For purposes of this Section, Fair Market Value shall be
determined as of the Offering Date.

ARTICLE VII

PURCHASING COMMON STOCK

     7.1 Participant’s Contribution and Stock Accounts.

     (a) Contribution Account. The Administrator shall establish a book account in the name of
each Participant for each Offering Period, which shall be the Participant’s Contribution Account.
As discussed in Section 7.2 below, a Participant’s payroll deductions shall be credited to the
Participant’s Contribution Account, without interest, until such cash is withdrawn, distributed, or
used to purchase Common Stock as described below. All cash received or held by the Company under
the Plan may be used by the Company for any corporate purpose. The Company shall not be obligated
to segregate any assets held under the Plan.

     (b) Stock Account and Registration of Shares. At the election of the Administrator, shares
of Common Stock acquired upon exercise of an Option may be (i) registered in book entry form on the
registration books maintained by the Company’s transfer agent, (ii) certificated in the name of the
Company and held by the Company as the nominee for the Participant, or (iii) registered in
book-entry form in an account established on behalf of the Participant with a third-party brokerage
firm. These shares shall be credited to the Participant’s Stock Account. A Participant shall have
all ownership rights as to the shares credited to his or her Stock Account, and the Company shall
have no ownership or other rights of any kind with respect to any such certificates or the shares
represented thereby. The Company may enter into an arrangement with one or more third-party firms
to administer the Stock Accounts of Participants.

 

 

     7.2 Payroll Deductions; Dividends.

     (a) Payroll Deductions. By submitting a Request Form at any time before an Offering Period
in accordance with rules adopted by the Administrator, an Eligible Employee may authorize a payroll
deduction to purchase Common Stock under the Plan for any Offering Period. The payroll deduction
shall be effective on the first pay period during the Offering Period commencing after receipt of
the Request Form by the Administrator. The payroll deduction shall be subject to such requirements
as may be determined by the Administrator and in any event shall be in a whole dollar amount
($10.00 minimum) . Notwithstanding the foregoing, the Committee may impose a maximum dollar limit
for payroll deductions in any one Offering Period, subject to Section 6.2.

     (b) Dividends. Cash or stock dividends paid on Common Stock which is credited to a
Participant’s Stock Account as of the dividend payment date may, at the election of the Company, be
automatically reinvested in shares of Common Stock and credited to the Participant’s Stock Account
or paid or distributed to the Participant as soon as practicable.

     7.3 Automatic Exercise. Unless the cash credited to a Participant’s Contribution
Account is withdrawn or distributed as provided in Article VIII, his or her Option shall be deemed
to have been exercised automatically on each Purchase Date, for the purchase of the number of full
shares of Common Stock which the cash credited to his or her Contribution Account at that time will
purchase at the Purchase Price. If there is a cash balance remaining in the Participant’s
Contribution Account at the end of an Offering Period representing the exercise price for a
fractional share of Common Stock, such balance may be retained in the Participant’s Contribution
Account for the next Offering Period, unless the Participant requests that it be refunded, without
interest. Any other cash balance remaining in the Participant’s Contribution Account at the end of
an Offering Period shall be refunded to the Participant, without interest. The amount of cash that
may be used to purchase shares of Common Stock may not exceed the Compensation restrictions set
forth in Section 7.2 or the applicable limitations of Section 6.2.

     Except as provided in the preceding paragraph, if the cash credited to a Participant’s
Contribution Account on the Purchase Date exceeds the applicable Compensation restrictions of
Section 7.2 or exceeds the amount necessary to purchase the maximum number of shares of Common
Stock available during the Offering Period under the applicable limitations of Section 6.2, such
excess cash shall be refunded to the Participant, without interest. The excess cash may not be used
to purchase shares of Common Stock nor retained in the Participant’s Contribution Account for a
future Offering Period.

     Each Participant shall receive a statement on not less than an annual basis indicating the
number of shares credited to his or her Stock Account, if any, under the Plan.

     7.4 Listing, Registration, and Qualification of Shares. The granting of Options
for, and the sale and delivery of, Common Stock under the Plan shall be subject to the effecting by
the Company of any listing, registration, or qualification of the shares subject to that Option
upon any securities exchange or under any federal or state law, or the obtaining of the consent or
approval of any governmental regulatory body deemed necessary or desirable for the issuance or
purchase of the shares covered.

ARTICLE VIII

DISCONTINUANCE, WITHDRAWALS AND DISTRIBUTIONS

     8.1 Discontinuance. A Participant may discontinue participation in an Offering
Period and thereby discontinue his or her payroll deductions for an Offering Period by filing a new
Request Form with the Administrator requesting a refund of amounts accumulated in his or her
Contribution Account. This discontinuance shall be effective as soon as practicable, typically on
the first pay period commencing at least 15 days after receipt of the Request Form by the
Administrator. Any amount held in the Participant’s Contribution Account for an Offering Period
after the effective date of the discontinuance of his or her participation will be refunded to the
Participant, without interest.

 

 

     8.2 Withdrawal of Shares While Employed. A Participant may, while an Employee of
the Company or any Subsidiary, withdraw certificates for any whole number of shares of Common Stock
credited to his or her Stock Account at any time, upon 30 days’ written notice to the
Administrator. If a Participant requests a distribution of only a portion of the shares of Common
Stock credited to his or her Stock Account, the Administrator will distribute the oldest securities
held in the Participant’s Stock Account first, using a first in-first out methodology. The
Administrator may at any time distribute certificates for some or all of the shares of Common Stock
credited to a Participant’s Stock Account, whether or not the Participant so requests.

     8.3 Leave of Absence; Transfer to Ineligible Status. If a Participant either
begins a leave of absence, is transferred to employment with a Subsidiary not participating in the
Plan, or remains employed with an Employer but is no longer eligible to participate in the Plan,
the Participant shall cease to be eligible for payroll deductions to his or her Contribution
Account pursuant to Section 7.2. The cash balance then credited to the Participant’s Contribution
Account shall, at the election of the Participant, be:

     (a) returned to the Participant, in cash, without interest, as soon as practicable, upon the
Participant’s written request received by the Administrator at least 30 days before the next
Purchase Date; or

     (b) if the Participant so requests or, in the absence of timely instructions from the
Participant of a desire to receive cash under (a) above, held under the Plan and used to purchase
Common Stock for the Participant under the automatic exercise provisions of Section 7.3.

     If the Participant returns from the leave of absence before being deemed to have ceased
employment with the Employer under Section 4.3, or again becomes eligible to participate in the
Plan, the Request Form, if any, in effect immediately before the leave of absence or disqualifying
change in employment status shall be deemed void and the Participant must again complete a new
Request Form to resume participation in the Plan.

     8.4 Termination of Employment for Reasons Other Than Death. If a Participant
terminates employment with the Company and its Subsidiaries for reasons other than death, the cash
balance in the Participant’s Contribution Account shall be returned to the Participant in cash,
without interest, as soon as practicable. Certificates for the largest whole number of shares of
Common Stock credited to his or her Stock Account shall be distributed to the Participant as soon
as practicable, together with cash for any remaining balance.

     8.5 Death. In the event a Participant dies, the cash balance in his or her
Contribution Account shall be distributed to the Participant’s estate, in cash, without interest,
as soon as practicable. Certificates for the largest whole number of shares of Common Stock
credited to his or her Stock Account shall be distributed to the Participant as soon as
practicable, together with cash for any remaining balance.

ARTICLE IX

AMENDMENT AND TERMINATION

     9.1 Amendment. The Committee shall have the right to amend or modify the Plan, in
full or in part, at any time and from time to time; provided, however, that no amendment or
modification shall:

     (a) affect any right or obligation with respect to any grant previously made, unless required
by law or deemed by the Committee to be necessary or desirable in order to enable the Company to
comply with applicable securities laws or regulations, or

     (b) unless previously approved by the stockholders of the Company, where such approval is
necessary to satisfy applicable securities laws, the Code, or rules of any stock exchange on which
the Company’s Common Stock is listed:

 

 

     (1) in any manner materially affect the eligibility requirements set forth in Sections 4.1 and
4.3, or change the definition of Employer as set forth in Section 2.12, or

     (2) increase the number of shares of Common Stock subject to any options issued to
Participants (except as provided in Sections 5.2 and 5.3).

     9.2 Termination. The Plan will continue into effect through December 31, 2015
unless earlier terminated by the Committee. The Committee may terminate the Plan at any time in its
sole and absolute discretion. The Plan shall be terminated by the Committee if at any time the
number of shares of Common Stock authorized for purposes of the Plan is not sufficient to meet all
purchase requirements, except as specified in Section 5.1.

     Upon termination of the Plan, the Administrator shall give notice thereof to Participants and
shall terminate all payroll deductions. Cash balances then credited to Participants’ Contribution
Accounts shall be distributed as soon as practicable, without interest.

ARTICLE X

MISCELLANEOUS

     10.1 Registration and Expenses. Whether registered in book entry form or
represented in certificate form as provided in Section 7.1(b), shares of Common Stock acquired upon
exercise of an Option shall be directly registered in the name of the Participant or, if the
Participant so indicates on the Request Form, (a) in the Participant’s name jointly with a member
of the Participant’s family, with the right of survivorship, (b) in the name of a custodian for the
Participant (in the event the Participant is under a legal disability to have stock issued in the
Participant’s name), (c) in a manner giving effect to the status of such shares as community
property, or (d) in street name for the benefit of any of the above with a broker designated by the
Participant. No other names may be included in the Common Stock registration. The Company shall pay
all issue or transfer taxes with respect to the issuance of shares of such Common Stock or the
initial transfer of such shares to a brokerage account designated by the Company, as well as all
fees and expenses necessarily incurred by the Company in connection with such issuance or initial
transfer. Once the shares have been issued to the Participant or initially transferred to such
brokerage account on behalf of the Participant, the Company shall bear no expense for further
transfers or sale of the shares.

     10.2 Employment Rights. Neither the establishment of the Plan, nor the grant of
any Options thereunder, nor the exercise thereof shall be deemed to give to any Employee the right
to be retained in the employ of the Company or any Subsidiary or to interfere with the right of the
Company or any Subsidiary to discharge any Employee or otherwise modify the employment relationship
at any time.

     10.3 Tax Withholding. The Administrator may make appropriate provisions for
withholding of federal, state, and local income taxes, and any other taxes, from a Participant’s
Compensation to the extent the Administrator deems such withholding to be legally required.

     10.4 Rights Not Transferable. Rights and Options granted under this Plan are not
transferable by the Participant other than by will or by the laws of descent and distribution and
are exercisable only by the Participant during his or her lifetime.

     10.5 No Repurchase of Stock by Company. The Company is under no obligation to
repurchase from any Participant any shares of Common Stock acquired under the Plan.

     10.6 Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the State of Delaware except to the extent such laws are preempted by the laws of
the United States.

     10.7 Indemnification. To the extent allowable under applicable law, each member
of the Committee and officers and employees of the Company shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense (including, but not limited to, attorneys
fees) that may be imposed upon or reasonably incurred by such member in connection with or
resulting from any claim,

 

 

action, suit, or proceeding to which such member may be a party or in which he may be involved
by reason of any action or failure to act under the Plan and against and from any and all amounts
paid by such member in satisfaction of judgment in such action, suit, or proceeding against him
provided he gives the Company an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall be in addition to any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them harmless.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]