Document:

exv4w1

Exhibit 4.1

SYSCOMM
INTERNATIONAL CORPORATION
2001 FLEXIBLE STOCK PLAN 

(As Amended and
Restated on December 4, 2008) 

 

 

TABLE OF
CONTENTS 

(As Amended and
Restated on December 4, 2008) 

	 	 	 	 	 
	 	 	Page	 
	
       
	 	 	 	 
	
      1. NAME AND
      PURPOSE
	 	 	1	 
	
      1.1. Name
	 	 	1	 
	
      1.2. Purpose
	 	 	1	 
	
       
	 	 	 	 
	
      2. DEFINITIONS OF TERMS
      AND RULES OF CONSTRUCTION
	 	 	1	 
	
      2.1. General Definitions
	 	 	1	 
	
      2.1.1.
    Affiliate
	 	 	1	 
	
      2.1.2.
    Agreement
	 	 	1	 
	
      2.1.3. Benefit
	 	 	1	 
	
      2.1.4. Board
	 	 	1	 
	
      2.1.5. Cash
    Award
	 	 	1	 
	
      2.1.6. Change of
      Control
	 	 	2	 
	
      2.1.7. Code
	 	 	3	 
	
      2.1.8. Company
	 	 	3	 
	
      2.1.9.
    Committee
	 	 	3	 
	
      2.1.10. Common
      Stock
	 	 	4	 
	
      2.1.11. Effective
      Date
	 	 	4	 
	
      2.1.12.
    Employee
	 	 	4	 
	
      2.1.13.
    Employer
	 	 	4	 
	
      2.1.14. Exchange
      Act
	 	 	4	 
	
      2.1.15. Fair Market
      Value
	 	 	4	 
	
      2.1.16. Fiscal
      Year
	 	 	4	 
	
      2.1.17. ISO
	 	 	5	 
	
      2.1.18. NQSO
	 	 	5	 
	
      2.1.19. Option
	 	 	5	 
	
      2.1.20. Other Stock
      Based Award
	 	 	5	 
	
      2.1.21. Parent
	 	 	5	 
	
      2.1.22.
      Participant
	 	 	5	 
	
      2.1.23. Performance
      Based Compensation
	 	 	5	 
	
      2.1.24. Performance
      Share
	 	 	5	 
	
      2.1.25. Plan
	 	 	6	 
	
      2.1.26. Reload
      Option
	 	 	6	 
	
      2.1.27. Restricted
      Stock
	 	 	6	 
	
      2.1.28.
      Rule 16b-3
	 	 	6	 
	
      2.1.29. SEC
	 	 	6	 
	
      2.1.30. Share
	 	 	6	 
	
      2.1.31. SAR
	 	 	6	 
	
      2.1.32.
    Subsidiary
	 	 	6	 
	
      2.2. Other Definitions
	 	 	6	 
	
      2.3. Conflicts
	 	 	6	 

i

 

	 	 	 	 	 
	 	 	Page	 
	
       
	 	 	 	 
	
      3. COMMON
STOCK
	 	 	7	 
	
      3.1. Number of Shares
	 	 	7	 
	
      3.2. Reusage
	 	 	7	 
	
      3.3. Adjustments
	 	 	7	 
	
       
	 	 	 	 
	
      4. ELIGIBILITY
	 	 	7	 
	
      4.1. Determined By Committee.
	 	 	7	 
	
       
	 	 	 	 
	
      5.
    ADMINISTRATION
	 	 	8	 
	
      5.1. Committee
	 	 	8	 
	
      5.2. Authority
	 	 	8	 
	
      5.3. Delegation
	 	 	9	 
	
      5.4. Determination
	 	 	9	 
	
       
	 	 	 	 
	
      6. AMENDMENT
	 	 	9	 
	
      6.1. Power of Board
	 	 	9	 
	
      6.2. Limitation
	 	 	9	 
	
       
	 	 	 	 
	
      7. TERM AND
      TERMINATION
	 	 	9	 
	
      7.1. Term
	 	 	9	 
	
      7.2. Termination
	 	 	9	 
	
       
	 	 	 	 
	
      8. MODIFICATION OR
      TERMINATION OF BENEFITS
	 	 	10	 
	
      8.1. General
	 	 	10	 
	
      8.2. Committee’s Right
	 	 	10	 
	
       
	 	 	 	 
	
      9. CHANGE OF
      CONTROL
	 	 	10	 
	
      9.1. Vesting and Payment
	 	 	10	 
	
      9.2. Other Action
	 	 	10	 
	
       
	 	 	 	 
	
      10. AGREEMENTS AND
      CERTAIN BENEFITS
	 	 	11	 
	
      10.1. Grant Evidenced by
    Agreement
	 	 	11	 
	
      10.2. Provisions of Agreement
	 	 	11	 
	
      10.3. Transferability
	 	 	11	 
	
       
	 	 	 	 
	
      11. REPLACEMENT AND
      TANDEM AWARDS
	 	 	11	 
	
      11.1. Replacement
	 	 	11	 
	
      11.2. Tandem Awards
	 	 	11	 
	
       
	 	 	 	 
	
      12. PAYMENT AND
      WITHHOLDING
	 	 	12	 
	
      12.1. Payment
	 	 	12	 
	
      12.3. Dividend Equivalents
	 	 	12	 
	
      12.3. Withholding
	 	 	12	 
	
       
	 	 	 	 
	
      13. OPTIONS
	 	 	13	 
	
      13.1. Types of Options
	 	 	13	 
	
      13.2. Grant of ISOs and Option
      Price
	 	 	13	 
	
      13.3. Other Requirements for
    ISOs
	 	 	13	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	
       
	 	 	 	 
	
      13.4. NQSOs
	 	 	13	 
	
      13.5. Determination by
Committee
	 	 	13	 
	
       
	 	 	 	 
	
      14. SARS
	 	 	13	 
	
      14.1. Grant and Payment
	 	 	13	 
	
      14.2. Grant of Tandem Award
	 	 	13	 
	
      14.3. ISO Tandem Award
	 	 	13	 
	
      14.4. Payment of Award
	 	 	13	 
	
       
	 	 	 	 
	
      15. ANNUAL
      LIMITATIONS
	 	 	14	 
	
      15.1. Limitation on Options and
      SARs
	 	 	14	 
	
      15.2. Computations
	 	 	14	 
	
       
	 	 	 	 
	
      16. RESTRICTED STOCK
      AND PERFORMANCE SHARES
	 	 	14	 
	
      16.1. Restricted Stock
	 	 	14	 
	
      16.2. Cost of Restricted Stock
	 	 	14	 
	
      16.3. Non-Transferability
	 	 	14	 
	
      16.4. Performance Shares
	 	 	15	 
	
      16.5. Grant
	 	 	15	 
	
       
	 	 	 	 
	
      17. CASH
AWARDS
	 	 	15	 
	
      17.1. Grant
	 	 	15	 
	
      17.2. Rule 16b-3
	 	 	15	 
	
      17.3. Restrictions
	 	 	15	 
	
       
	 	 	 	 
	
      18. OTHER STOCK BASED
      AWARDS AND OTHER BENEFITS
	 	 	15	 
	
      18.1. Other Stock Based Awards
	 	 	15	 
	
      18.2. Other Benefits
	 	 	15	 
	
       
	 	 	 	 
	
      19. MISCELLANEOUS
      PROVISIONS
	 	 	16	 
	
      19.1. Underscored References
	 	 	16	 
	
      19.2. Number and Gender
	 	 	16	 
	
      19.3. Unfunded Status of Plan
	 	 	16	 
	
      19.4. Termination of Employment
	 	 	16	 
	
      19.5. Designation of
Beneficiary
	 	 	16	 
	
      19.6. Governing Law
	 	 	17	 
	
      19.7. Purchase for Investment
	 	 	17	 
	
      19.8. No Employment Contract
	 	 	17	 
	
      19.9. No Effect on Other
    Benefits
	 	 	17	 

iii

 

SYSCOMM
INTERNATIONAL CORPORATION
2001 FLEXIBLE STOCK PLAN 

(As Amended and
Restated on December 4, 2008) 

1. NAME AND
PURPOSE 

     1.1. Name. 

     The name of this Plan is the “SysComm International Corporation
2001 Flexible Stock Plan.” 

     1.2. Purpose. 

     The Company has established this Plan to attract, retain, motivate
and reward Employees and other individuals, to encourage ownership of the
Company’s Common Stock by Employees and other individuals, and to promote and
further the best interests of the Company by granting cash and other awards.
This Plan is intended to be “Broadly Based” (as such term is used for purposes
of rules promulgated by The National Association of Securities Dealers). 

2. DEFINITIONS
OF TERMS AND RULES OF CONSTRUCTION 

     2.1. General Definitions. 

     The following words and phrases, when used in the Plan, unless
otherwise specifically defined or unless the context clearly otherwise requires,
shall have the following respective meanings: 

          2.1.1. Affiliate. 

               Parent or Subsidiary of the Company. 

          2.1.2. Agreement. 

               The document which evidences the grant of any Benefit
under the
Plan and which sets forth the Benefit and the terms, conditions and provisions
of, and restrictions relating to, such Benefit. 

          2.1.3. Benefit. 

               Any benefit granted to a Participant under the Plan. 

          2.1.4. Board. 

               The Board of Directors of the Company. 

          2.1.5. Cash Award. 

               A
Benefit payable in the form of cash. 

 

 

          2.1.6. Change of Control. 

               The occurrence of any of the following: 

               (a) An acquisition of any Common Stock or other
voting
securities of the Company entitled to vote generally for the election of
directors (the “Voting Securities”) by any “Person” or “Group” (as each such
term is used for purposes of Section 13(d) or 14(d) of the Exchange Act),
immediately after which such Person or Group, as the case may be, has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of more than 20% of the then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding Voting
Securities; provided, however, that in determining whether a
Change of Control has occurred, shares of Common Stock or Voting Securities that
are acquired in a Non-Control Acquisition (as defined below) shall not
constitute an acquisition which would cause a Change of Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) the Company, (ii) any
Subsidiary or (iii) any employee benefit plan maintained by the Company or
any Subsidiary, including a trust forming part of any such plan (an “Employee
Benefit Plan”); 

               (b) When, during any 2-year period, individuals who,
at the
beginning of the 2-year period, constitute the Board (the “Incumbent Board”),
cease for any reason to constitute at least 50% of the members of the Board;
provided, however, that (i) if the election or nomination for
election by the Company’s shareholders of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director shall, for
purposes hereof, be deemed to be a member of the Incumbent Board; and
(ii) no individual shall be deemed to be a member of the Incumbent Board if
such individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person or Group other than the Board (a “Proxy
Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; 

               (c) The consummation of: 

               (i) a merger, consolidation or reorganization involving the
Company or any Subsidiary, unless the merger, consolidation or reorganization is
a Non-Control Transaction. A “Non-Control Transaction” shall mean a merger,
consolidation or reorganization of the Company or any Subsidiary where: 

               (A) the shareholders of the Company immediately prior to the
merger, consolidation or reorganization own, directly or indirectly, immediately
following such merger, consolidation or reorganization, at least 50% of the
combined voting power of the outstanding voting securities of the corporation
resulting from such merger, consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of the
Common Stock or Voting Securities, as the case maybe, immediately prior to the
merger, consolidation or reorganization, 

2

 

               (B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for the merger,
consolidation or reorganization constitute at least two-thirds of the members of
the board of directors of the Surviving Corporation, or a corporation
beneficially owning, directly or indirectly, a majority of the voting securities
of the Surviving Corporation, and 

               (C) no Person or Group, other than (1) the Company,
(2) any Subsidiary, (3) any Employee Benefit Plan or (4) any
other Person or Group who, immediately prior to the merger, consolidation or
reorganization, had Beneficial Ownership of not less than 20% of the then
outstanding Voting Securities or Common Stock, has Beneficial Ownership of 20%
or more of the combined voting power of the Surviving Corporation’s then
outstanding voting securities or common stock; 

               (ii) a complete liquidation or dissolution of the
Company; or

               (iii) the sale or other disposition of all or substantially
all of the assets of the Company to any Person (other than a transfer to a
Subsidiary). 

     Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred solely because any Person or Group (the “Subject
Person”) acquired Beneficial Ownership of more than the permitted amount of the
then outstanding Voting Securities or Common Stock of the Company as a result of
an acquisition of Voting Securities or Common Stock by the Company which, by
reducing the number of shares of Voting Securities or Common Stock then
outstanding, increases the proportional number of shares beneficially owned by
the Subject Person; provided, however, that if a Change of Control
would have occurred (but for the operation of this sentence) as a result of the
acquisition of Voting Securities or Common Stock by the Company, and after such
acquisition by the Company, the Subject Person becomes the beneficial owner of
any additional shares of Voting Securities or Common Stock, which increases the
percentage of the then outstanding shares of Voting Securities or Common Stock
beneficially owned by the Subject Person, then a Change of Control shall be
deemed to have occurred. In addition, notwithstanding the foregoing, the
acquisition or ownership of any Common Stock or Voting Securities by Applied
Digital Solutions, Inc. and its Affiliates (determined as if it was the Company)
shall not cause or result in a Change of Control. 

          2.1.7. Code. 

               The Internal Revenue Code of 1986, as amended. Any
reference to
the Code includes the regulations promulgated pursuant to the Code. 

          2.1.8. Company. 

               SysComm International Corporation. 

          2.1.9. Committee. 

               The Committee described in Section 5.1. 

3

 

          2.1.10. Common Stock. 

               The Company’s common stock which presently has a par
value of $.01
per Share. 

          2.1.11. Effective Date. 

               The date that the Plan is approved by the shareholders of
the
Company which must occur within one year before or after approval by the Board.
Any grants of Benefits prior to the approval by the shareholders of the Company
shall be void if such approval is not obtained. 

          2.1.12. Employee. 

               Any person employed by the Employer. 

          2.1.13. Employer. 

               The Company and all Affiliates. 

          2.1.14. Exchange Act. 

               The Securities Exchange Act of 1934, as amended. 

          2.1.15. Fair Market Value. 

               (i) If the Shares are traded on the OTC Bulletin Board,
the
closing price of Shares on the OTC Bulletin Board on a given date, or, in the
absence of sales on a given date, the closing price on the OTC Bulletin Board on
the last day on which a sale of Shares on the OTC Bulletin Board occurred prior
to such date. 

               (ii) If the Shares are listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation (“NASDAQ”) System, the closing sales price for the Shares (or the
closing bid, if no sales were reported) as quoted on such system or exchange (or
the exchange with the greatest volume of trading in Shares) on the date of
determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable. 

               (iii) In the absence of an established market for the Shares,
and
if the Shares are not traded on the OTC Bulletin Board, as determined in good
faith by the Committee. 

          2.1.16. Fiscal Year. 

               The taxable year of the Company which is the calendar year.

4

 

          2.1.17. ISO. 

               An Incentive Stock Option as defined in Section 422
of the
Code. 

          2.1.18. NQSO. 

A
non-qualified stock Option, which is an Option that does not qualify as an ISO.

          2.1.19. Option. 

               An option to purchase Shares granted under the Plan.

          2.1.20. Other Stock Based Award. 

               An award under Section 18 that is valued in whole or
in part
by reference to, or otherwise based on, Common Stock. 

          2.1.21. Parent. 

               Any corporation (other than the Company or a Subsidiary)
in an
unbroken chain of corporations ending with the Company, if, at the time of the
grant of an Option or other Benefit, each of the corporations (other than the
Company) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain. 

          2.1.22. Participant. 

               An individual who is granted a Benefit under the Plan.
Benefits
may be granted only to Employees, members of the Board, employees and owners of
entities which are not Affiliates but which have a direct or indirect ownership
interest in an Employer or in which an Employer has a direct or indirect
ownership interest, individuals who, and employees and owners of entities which,
are customers and suppliers of an Employer, individuals who, and employees and
owners of entities which, render services to an Employer, and individuals who,
and employees and owners of entities, which have ownership or business
affiliations with any individual or entity previously described. 

          2.1.23. Performance Based Compensation. 

               Compensation which meets the requirements of
Section 162(m)(4)(C) of the Code. 

          2.1.24. Performance Share. 

               A
Share awarded to a Participant under Section 16.5 of the Plan. 

5

 

          2.1.25. Plan. 

               The SysComm International Corporation 2001 Flexible Stock
Plan and
all amendments and supplements to it. 

          2.1.26. Reload Option. 

               An Option to purchase the number of Shares used by a
Participant
to exercise an Option and to satisfy any withholding requirement incident to the
exercise of such Option. 

          2.1.27. Restricted Stock. 

               Shares issued under Section 16.1 of the Plan. 

          2.1.28. Rule 16b-3. 

               Rule 16b-3 promulgated by the SEC, as amended, or
any
successor rule in effect from time to time. 

          2.1.29. SEC. 

               The Securities and Exchange Commission. 

          2.1.30. Share. 

               A
share of Common Stock. 

          2.1.31. SAR. 

               A
stock appreciation right, which is the right to receive an amount equal to the
appreciation, if any, in the Fair Market Value of a Share from the date of the
grant of the right to the date of its payment. 

          2.1.32. Subsidiary. 

               Any corporation, other than the Company, in an unbroken
chain of
corporations beginning with the Company if, at the time of grant of an Option or
other Benefit, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

     2.2. Other Definitions. 

     In
addition to the above definitions, certain words and phrases used in the Plan
and any Agreement may be defined in other portions of the Plan or in such
Agreement. 

     2.3. Conflicts. 

     In
the case of any conflict in the terms of the Plan relating to a Benefit, the
provisions in the section of the Plan which specifically grants such Benefit
shall control those in a different section. In the case of any conflict between
the terms of the Plan relating to a Benefit and the terms of an Agreement
relating to a Benefit, the terms of the Plan shall control. 

6

 

3. COMMON
STOCK 

     3.1. Number of Shares. 

     The number of Shares which may be issued or sold or for which
Options, SARs or Performance Shares may be granted under the Plan shall be
2,500,000 Shares, plus an annual increase, effective as of the first day of each
calendar year, commencing with 2002, equal to 25% of the number of outstanding
Shares as of the first day of such calendar year, but in no event more than
10,000,000 Shares in the aggregate. Such Shares may be authorized but unissued
Shares, Shares held in the treasury, or both. The full number of Shares
available may be used for any type of Option or other Benefit. 

     3.2. Reusage. 

     If
an Option or SAR expires or is terminated, surrendered, or canceled without
having been fully exercised, if Restricted Shares or Performance Shares are
forfeited, or if any other grant results in any Shares not being issued, the
Shares covered by such Option or SAR, grant of Restricted Shares, Performance
Shares or other grant, as the case may be, shall again be available for use
under the Plan. Any Shares which are used as full or partial payment to the
Company upon exercise of an Option or for any other Benefit that requires a
payment to the Company shall be available for purposes of the Plan. 

     3.3. Adjustments. 

     If
there is any change in the Common Stock of the Company by reason of any stock
dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, or otherwise, the number of
SARs and number and class of shares available for Options and grants of
Restricted Stock, Performance Shares and Other Stock Based Awards and the number
of Shares subject to outstanding Options, SARs, grants of Restricted Stock which
are not vested, grants of Performance Shares which are not vested, and Other
Stock Based Awards, and the price thereof, as applicable, shall be appropriately
adjusted by the Committee. 

4.
ELIGIBILITY 

     4.1. Determined By Committee. 

     The Participants and the Benefits they receive under the Plan
shall be determined solely by the Committee. In making its determinations, the
Committee shall consider past, present and expected future contributions of
Participants and potential Participants to the Employer, including, without
limitation, the performance of, or the refraining from the performance of,
services. Unless specifically provided otherwise herein, all determinations of
the Committee in connection with the Plan or an Agreement shall be made in its
sole discretion. 

7

 

5.
ADMINISTRATION 

     5.1. Committee. 

     The Plan shall be administered by the Committee. The Committee
shall consist of the Board, unless the Board appoints a Committee of two or more
but less than all of the Board. If the Committee does not include the entire
Board, it shall serve at the pleasure of the Board, which may from time to time
appoint members in substitution for members previously appointed and fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it may determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting. Any decision
or determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. 

     5.2. Authority. 

     Subject to the terms of the Plan, the Committee shall have
discretionary authority to: 

          (a) determine the individuals to whom Benefits are granted,
the type and amounts of Benefits to be granted and the date of issuance and
duration of all such grants; 

          (b) determine the terms, conditions and provisions of, and
restrictions relating to, each Benefit granted; 

          (c) interpret and construe the Plan and all Agreements;

          (d) prescribe, amend and rescind rules and regulations
relating to the Plan; 

          (e) determine the content and form of all Agreements; 

          (f) determine all questions relating to Benefits under the
Plan; 

          (g) maintain accounts, records and ledgers relating to
Benefits; 

          (h) maintain records concerning its decisions and
proceedings; 

          (i) employ agents, attorneys, accountants or other persons
for such purposes as the Committee considers necessary or desirable; 

          (j) take, at any time, any action described in
Section 9.1 or permitted by Section 9.2(a), irrespective of whether
any Change of Control has occurred or is imminent; 

          (k) determine, except to the extent otherwise provided in the
Plan, whether and the extent to which Benefits under the Plan will be structured
to conform to the requirements applicable to Performance-Based Compensation, and
to take such action, establish such procedures, and impose such restrictions at
the time such Benefits are granted as the Committee determines to be necessary
or appropriate to conform to such requirements; and 

          (l) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and carry out the purposes of the
Plan. 

8

 

     5.3. Delegation. 

     Except as required by Rule 16b-3 with respect to grants of
Options, Stock Appreciation Awards, Performance Shares, Other Stock Based
Awards, or other Benefits to individuals who are subject to Section 16 of
the Exchange Act or as otherwise required for compliance with Rule 16b-3 or
other applicable law, the Committee may delegate all or any part of its
authority under the Plan to any Employee, Employees or committee. 

     5.4. Determination. 

     All determinations of the Committee shall be final. 

6. AMENDMENT

     6.1. Power of Board. 

     Except as hereinafter provided, the Board shall have the sole
right and power to amend the Plan at any time and from time to time. 

     6.2. Limitation. 

     The Board may not amend the Plan, without approval of the
shareholder of the Company: 

          (a) in a manner which would cause Options which are intended
to qualify as ISOs to fail to qualify; 

          (b) in a manner which would cause the Plan to fail to meet
the requirements of Rule 16b-3; or 

          (c) in a manner which would violate applicable law. 

7. TERM AND
TERMINATION 

     7.1. Term. 

     The Plan shall commence as of the Effective Date and, subject to
the terms of the Plan, including those requiring approval by the shareholders of
the Company and those limiting the period over which ISOs or any other Benefits
may be granted, shall continue in full force and effect until terminated. 

     7.2. Termination. 

     The Plan may be terminated at any time by the Board. 

9

 

8. MODIFICATION
OR TERMINATION OF BENEFITS 

     8.1. General. 

     Subject to the provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant’s right to any
Benefit granted prior to such amendment or termination. 

     8.2. Committee’s Right. 

     Any Benefit granted may be converted, modified, forfeited or
canceled, in whole or in part, by the Committee if and to the extent permitted
in the Plan or applicable Agreement or with the consent of the Participant to
whom such Benefit was granted. Except as may be provided in an Agreement, the
Committee may, in its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the vesting of, any
Benefit. 

9. CHANGE OF
CONTROL 

     9.1. Vesting and Payment. 

     In
the event of a Change of Control: 

          (a) all outstanding Options shall become fully exercisable,
except to the extent that the right to exercise the Option is subject to
restrictions established in connection with an SAR that is issued in tandem with
the Option; 

          (b) all outstanding SARs shall become immediately payable,
except to the extent that the right to exercise the SAR is subject to
restrictions established in connection with an Option that is issued in tandem
with the SAR; 

          (c) all Shares of Restricted Stock shall become fully vested;

          (d) all Performance Shares shall be deemed to be fully earned
and shall be paid out in such manner as determined by the Committee; and 

          (e) all Cash Awards, Other Stock Based Awards and other
Benefits shall become fully vested and/or earned and paid out in such manner as
determined by the Committee. 

     9.2. Other Action. 

     In
the event of a Change of Control, the Committee, in its sole discretion, may, in
addition to the provisions of Section 9.1 above and to the extent not
inconsistent therewith: 

          (a) provide for the purchase of any Benefit for an amount of
cash equal to the amount which could have been attained upon the exercise or
realization of such Benefit; 

          (b) make such adjustment to the Benefits then outstanding as
the Committee deems appropriate to reflect such transaction or change; and/or

          (c) cause the Benefits then outstanding to be assumed, or new
Benefits substituted therefor, by the surviving corporation in such change.

10

 

10. AGREEMENTS
AND CERTAIN BENEFITS 

     10.1. Grant Evidenced by Agreement. 

     The grant of any Benefit under the Plan may be evidenced by an
Agreement which shall describe the specific Benefit granted and the terms and
conditions of the Benefit. The granting of any Benefit shall be subject to, and
conditioned upon, the recipient’s execution of any Agreement required by the
Committee. Except as otherwise provided in an Agreement, all capitalized terms
used in the Agreement shall have the same meaning as in the Plan, and the
Agreement shall be subject to all of the terms of the Plan. 

     10.2. Provisions of Agreement. 

     Each Agreement shall contain such provisions that the Committee
shall determine to be necessary, desirable and appropriate for the Benefit
granted which may include, but not necessarily be limited to, the following with
respect to any Benefit: description of the type of Benefit; the Benefit’s
duration; its transferability; if an Option, the exercise price, the exercise
period and the person or persons who may exercise the Option; the effect upon
such Benefit of the Participant’s death, disability, changes of duties or
termination of employment; the Benefit’s conditions; when, if, and how any
Benefit may be forfeited, converted into another Benefit, modified, exchanged
for another Benefit, or replaced; and the restrictions on any Shares purchased
or granted under the Plan. 

     10.3. Transferability. 

     Unless otherwise specified in an Agreement or permitted by the
Committee, each Benefit granted shall be not transferable other than by will or
the laws of descent and distribution and shall be exercisable during a
Participant’s lifetime only by him. 

11. REPLACEMENT
AND TANDEM AWARDS 

     11.1. Replacement. 

     The Committee may permit a Participant to elect to surrender a
Benefit in exchange for a new Benefit. 

     11.2. Tandem Awards. 

     Awards may be granted by the Committee in tandem. However, no
Benefit may be granted in tandem with an ISO except SARs. 

11

 

12. PAYMENT AND
WITHHOLDING 

     12.1. Payment. 

     Upon the exercise of an Option or in the case of any other Benefit
that requires a payment by a Participant to the Company, the amount due the
Company is to be paid: 

          (a) in cash, including by means of a so-called “cashless
exercise” of an Option; 

          (b) by the surrender of all or part of a Benefit (including
the Benefit being exercised); 

          (c) by the tender to the Company of Shares owned by the
optionee and registered in his name having a Fair Market Value equal to the
amount due to the Company; 

          (d) in other property, rights and credits deemed acceptable
by the Committee, including the Participant’s promissory note; 

          (e) by any combination of the payment methods specified in
(a), (b), (c) and (d) above. 

     Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the Committee or if and to the
extent so provided in an Agreement. The proceeds of the sale of Shares purchased
pursuant to an Option and any payment to the Company for other Benefits shall be
added to the general funds of the Company or to the Shares held in treasury, as
the case may be, and used for the corporate purposes of the Company as the Board
shall determine. 

     12.2. Dividend Equivalents. 

     Grants of Benefits in Shares or Share equivalents may include
dividend equivalent payments or dividend credit rights. 

     12.3. Withholding. 

     The Company may, at the time any distribution is made under the
Plan, whether in cash or in Shares, or at the time any Option is exercised,
withhold from such distribution or Shares issuable upon the exercise of an
Option, any amount necessary to satisfy federal, state and local income and/or
other tax withholding requirements with respect to such distribution or exercise
of such Options. The Committee or the Company may require a participant to
tender to the Company cash and/or Shares in the amount necessary to comply with
any such withholding requirements. 

12

 

13. OPTIONS 

     13.1. Types of Options. 

     It
is intended that both ISOs and NQSOs, which may be Reload Options, may be
granted by the Committee under the Plan. 

     13.2. Grant of ISOs and Option Price. 

     Each ISO must be granted to an Employee and granted within ten
years from the earlier of the date of adoption by the Board or the Effective
Date. The purchase price for Shares under any ISO shall be no less than the Fair
Market Value of the Shares at the time the Option is granted. 

     13.3. Other Requirements for ISOs. 

     The terms of each Option which is intended to qualify as an ISO
shall meet all requirements of Section 422 of the Code. 

     13.4. NQSOs. 

     The terms of each NQSO shall provide that such Option will not be
treated as an ISO. The purchase price for Shares under any NQSO shall be no less
than 100% of the Fair Market Value of the Shares at the time the Option is
granted. 

     13.5. Determination by Committee. 

     Except as otherwise provided in Section 13.2 through
Section 13.4, the terms of all Options shall be determined by the
Committee. 

14. SARS 

     14.1. Grant and Payment. 

     The Committee may grant SARs. Upon electing to receive payment of
a SAR, a Participant shall receive payment in cash, in Shares, or in any
combination of cash and Shares, as the Committee shall determine. 

     14.2. Grant of Tandem Award. 

     The Committee may grant SARs in tandem with an Option, in which
case: the exercise of the Option shall cause a correlative reduction in SARs
standing to a Participant’s credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative reduction of the Shares under
such Option. 

     14.3. ISO Tandem Award. 

     When SARs are granted in tandem with an ISO, the SARs shall have
such terms and conditions as shall be required for the ISO to qualify as an ISO. 

     14.4. Payment of Award. 

     SARs shall be paid by the Company to a Participant, to the extent
payment is elected by the Participant (and is otherwise due and payable), as
soon as practicable after the date on which such election is made. 

13

 

15. ANNUAL
LIMITATIONS 

     15.1. Limitation on Options and SARs. 

     The number of (a) Shares covered by Options where the
purchase price is no less than the Fair Market Value of the Shares on the date
of grant plus (b) SARs which may be granted to any Participant in any
Fiscal Year shall not exceed $1,250,000. 

     15.2. Computations. 

     For purposes of Section 15.1: Shares covered by an Option
that is canceled shall count against the maximum, and, if the exercise price
under an Option is reduced, the transaction shall be treated as a cancellation
of the Option and a grant of a new Option; and SARs covered by a grant of SARs
that is canceled shall count against the maximum, and, if the Fair Market Value
of a Share on which the appreciation under a grant of SARs will be calculated is
reduced, the transaction will be treated as a cancellation of the SARs and the
grant of a new grant of SARs. 

16. RESTRICTED
STOCK AND PERFORMANCE SHARES 

     16.1. Restricted Stock. 

     The Committee may grant Benefits in Shares available under
Section 3 of the Plan as Restricted Stock. Shares of Restricted Stock shall
be issued and delivered at the time of the grant or as otherwise determined by
the Committee, but shall be subject to forfeiture until provided otherwise in
the applicable Agreement or the Plan. Each certificate representing Shares of
Restricted Stock shall bear a legend referring to the Plan and the risk of
forfeiture of the Shares and stating that such Shares are nontransferable until
all restrictions have been satisfied and the legend has been removed. At the
discretion of the Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of Restricted Stock from
the date of grant. 

     16.2. Cost of Restricted Stock. 

     Unless otherwise determined by the Committee, grants of Shares of
Restricted Stock shall be made at a per Share cost to the Participant equal to
par value. 

     16.3. Non-Transferability. 

     Shares of Restricted Stock shall not be transferable until after
the removal of the legend with respect to such Shares. 

14

 

     16.4. Performance Shares. 

     Performance Shares are the right of an individual to whom a grant
of such Shares is made to receive Shares or cash equal to the Fair Market Value
of such Shares at a future date in accordance with the terms and conditions of
such grant. The terms and conditions shall be determined by the Committee, in
its sole discretion, but generally are expected to be based substantially upon
the attainment of targeted profit and/or performance objectives. 

     16.5. Grant. 

     The Committee may grant an award of Performance Shares. The number
of Performance Shares and the terms and conditions of the grant shall be set
forth in the applicable Agreement. 

17. CASH
AWARDS 

     17.1. Grant. 

     The Committee may grant Cash Awards at such times and (subject to
Section 17.2) in such amounts as it deems appropriate. 

     17.2. Rule 16b-3. 

     The amount of any Cash Award in any Fiscal Year to any Participant
who is subject to Section 16 of the Exchange Act shall not exceed the greater of
$100,000 or 100% of his cash compensation (excluding any Cash Award under this
Section 17) for such Fiscal Year. 

     17.3. Restrictions. 

     Cash Awards may be subject or not subject to conditions (such as
an investment requirement), restricted or nonrestricted, vested or subject to
forfeiture and may be payable currently or in the future or both. 

18. OTHER STOCK
BASED AWARDS AND OTHER BENEFITS 

     18.1. Other Stock Based Awards. 

     The Committee shall have the right to grant Other Stock Based
Awards which may include, without limitation, the grant of Shares based on
certain conditions, the payment of cash based on the performance of the Common
Stock, and the grant of securities convertible into Shares. 

     18.2. Other Benefits. 

     The Committee shall have the right to provide types of Benefits
under the Plan in addition to those specifically listed, if the Committee
believes that such Benefits would further the purposes for which the Plan was
established. 

15

 

19.
MISCELLANEOUS PROVISIONS 

     19.1. Underscored References. 

     The underscored references contained in the Plan are included only
for convenience, and they shall not be construed as a part of the Plan or in any
respect affecting or modifying its provisions. 

     19.2. Number and Gender. 

     The masculine and neuter, wherever used in the Plan, shall refer
to either the masculine, neuter or feminine; and, unless the context otherwise
requires, the singular shall include the plural and the plural the singular.

     19.3. Unfunded Status of Plan. 

     The Plan is intended to constitute an “unfunded” plan for
incentive and deferred compensation. With respect to any payments or deliveries
of Shares not yet made to a Participant by the Company, nothing contained herein
shall give any rights that are greater than those of a general creditor of the
Company. The Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Shares or
payments hereunder consistent with the foregoing. 

     19.4. Termination of Employment. 

     If
the employment of a Participant by the Company terminates for any reason, except
as otherwise provided in an Agreement, all unexercised, deferred, and unpaid
Benefits may be exercisable or paid only in accordance with rules established by
the Committee. These rules may provide, as the Committee may deem appropriate,
for the expiration, forfeiture, continuation, or acceleration of the vesting of
all or part of the Benefits. 

     19.5. Designation of Beneficiary. 

     A
Participant may file with the Committee a written designation of a beneficiary
or beneficiaries (subject to such limitations as to the classes and number of
beneficiaries and contingent beneficiaries as the Committee may from time to
time prescribe) to exercise, in the event of the death of the Participant, an
Option, or to receive, in such event, any Benefits. The Committee reserves the
right to review and approve beneficiary designations. A Participant may from
time to time revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan shall be controlling over any other
disposition, testamentary or otherwise; provided, however, that if
the Committee shall be in doubt as to the right of any such beneficiary to
exercise any Option or to receive any Benefit, the Committee may determine to
recognize only an exercise by the legal representative of the recipient, in
which case the Company, the Committee and the members thereof shall not be under
any further liability to anyone. 

16

 

     19.6. Governing Law. 

     This Plan shall be construed and administered in accordance with
the laws of the State of Delaware. 

     19.7. Purchase for Investment. 

     The Committee may require each person purchasing Shares pursuant
to an Option or other award under the Plan to represent to and agree with the
Company in writing that such person is acquiring the Shares for investment and
without a view to distribution or resale. The certificates for such Shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under all applicable laws, rules and regulations,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate references to such restrictions. 

     19.8. No Employment Contract. 

     Neither the adoption of the Plan nor any Benefit granted hereunder
shall confer upon any Employee any right to continued employment nor shall the
Plan or any Benefit interfere in any way with the right of the Employer to
terminate the employment of any of its Employees at any time. 

     19.9. No Effect on Other Benefits. 

     The receipt of Benefits under the Plan shall have no effect on any
benefits to which a Participant may be entitled from the Employer, under another
plan or otherwise, or preclude a Participant from receiving any such benefits.

17exv4w1

Exhibit 4.1

3COM CORPORATION

AMENDMENT NO. 2 TO

THIRD AMENDED AND RESTATED

PREFERRED SHARES RIGHTS AGREEMENT

     This Amendment No. 2 (this “Amendment”), dated as of November 11, 2009, is
made by and between 3Com Corporation., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company, a New York state trust company (the
“Rights Agent”) to amend the Third Amended and Restated Preferred Shares Rights Agreement,
dated as of November 4, 2002, by and between the Company and the Rights Agent (the “Rights
Agreement”). Capitalized terms used in this Amendment but not defined herein shall have the
meaning assigned to them in the Rights Agreement.

Recitals

     Whereas, the Rights Agreement was amended as of September 28, 2007 pursuant to that
certain Amendment No. 1 to Third Amended and Restated Preferred Shares Rights Agreement, which
amendment subsequently terminated in accordance with its terms.

     Whereas, Section 27 of the Rights Agreement provides that, in certain circumstances,
the Company may supplement or amend the Rights Agreement without the approval of any holders of
Rights.

     Whereas, the Company desires to modify the terms of the Rights Agreement in certain
respects as set forth herein, and in connection therewith, is entering into this Amendment and
directing the Rights Agent to enter into this Amendment.

     Now, Therefore, in consideration of the foregoing premises and the mutual covenants
and conditions set forth below, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties to this Amendment hereby agree as follows:

Amendment

1. Amendment of the Rights Agreement.

     1.1 Section 1 of the Rights Agreement is hereby amended by adding the following new sentence
to the definition of “Acquiring Person”:

“Notwithstanding the foregoing, neither Hewlett-Packard Company, nor any of its Affiliates or
Associates shall be deemed to be an Acquiring Person and neither a Shares Acquisition Date nor a
Distribution Date shall be deemed to occur and the Rights will not separate from the Common Shares,
in each case, solely by reason of the execution, delivery, performance or consummation of the
transactions contemplated pursuant to the Agreement and Plan of Merger, dated as of November 11,
2009, by and among the Company, Hewlett-Packard Company and Colorado Acquisition Corporation
(including any amendment or supplement thereto, the “Merger Agreement”).”

 

 

2. No Other Amendment. Except as modified by this Amendment, the Rights Agreement shall
remain in full force and effect without any modification. By executing this Amendment below, the
Company certifies that this Amendment has been executed and delivered in compliance with the terms
of Section 27 of the Rights Agreement and is consistent with the terms thereof. This Amendment
shall be deemed an amendment to the Rights Agreement and shall become effective when executed and
delivered by the Company and the Rights Agent as provided under Section 27 of the Rights Agreement.
Each of Hewlett-Packard Company and Colorado Acquisition Corp. shall be an express third party
beneficiary hereof.

3. Effect of Amendment. This Amendment shall be deemed to be in force and effect
immediately prior to the execution of the Merger Agreement; provided, however, that
this Amendment shall automatically terminate (if at all) and be of no further force or effect on
the date on which the Merger Agreement is terminated in accordance with its terms. Except as and to
the extent expressly modified by this Amendment, the Rights Agreement and the exhibits thereto,
shall remain in full force and effect in all respects. In the event of a conflict or inconsistency
between this Amendment and the Rights Agreement and the exhibits thereto, the provisions of this
Amendment shall govern.

4. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights
Agent shall not be liable for any delays or failures in performance resulting from acts beyond its
reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data
due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war, or civil unrest.

5. Counterparts. This Amendment may be executed in several counterparts, each of which
shall constitute an original and all of which, when taken together, shall constitute one agreement.

6. Miscellaneous. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in accordance with
the laws of such state applicable to contracts to be made and performed entirely within such state.
If any term or other provision of the Amendment is determined to be invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other terms and provisions of this
Amendment shall nonetheless remain in full force and effect and upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, this Amendment and such
term or other provision shall be deemed to have been amended so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the board of directors of the
Company.

[Remainder of Page Left Blank Intentionally]

 

 

     The parties hereto have caused this Amendment No. 2 to be executed and delivered as of the day
and year first written above.

	 	 	 	 	 	 	 	 	 	 	 
	American Stock Transfer & Trust Company	 	3Com Corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 /s/ Isaac J. Kagan	 	By:	 	 /s/ Neal D. Goldman	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 	 	 
	Name: Isaac J.
Kagan	 	Name: Neal D.
Goldman
	Title: Vice
President	 	Title: Executive
Vice President, Chief Administrative and
          Legal Officer and Secretary

[SIGNATURE PAGE TO AMENDMENT TO RIGHTS AGREEMENT]

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