Document:

exv10w4

 

Exhibit 10.4

INTERVOICE, INC.

2003 STOCK OPTION PLAN

ARTICLE 1. ESTABLISHMENT AND PURPOSE

     1.1
ESTABLISHMENT. Intervoice, Inc., a Texas corporation, hereby
amends
and restates the Intervoice, Inc. 2003 Stock Option Plan, as set forth in this
document.

     1.2 PURPOSE. The purposes of the Plan are to attract able persons to enter
the employ of the Company, to encourage Employees to remain in the employ of
the Company and to provide motivation to Employees to put forth maximum efforts
toward the continued growth, profitability and success of the Company, by
providing incentives to such persons through the ownership and performance of
the Common Stock of Intervoice. A further purpose of the Plan is to provide a
means through which Intervoice may attract able persons to become directors of
Intervoice and to provide directors of Intervoice with additional incentive and
reward opportunities designed to strengthen their concern for the welfare of
Intervoice and its stockholders. Toward these objectives, Options may be
granted under the Plan to Employees and Outside Directors on the terms and
subject to the conditions set forth in the Plan.

     1.3 EFFECTIVE DATE OF PLAN. This Plan, as amended by the Board of
Directors on June 2, 2004, shall be effective as of the date of its approval at
the 2004 annual meeting of shareholders of Intervoice by the holders of at
least a majority of the shares of Common Stock present or represented and
voting on the proposal to approve this Plan, as amended, at such meeting. If
the Plan, as amended, is not approved
by the shareholders, the Plan shall
continue in the form approved by the shareholders at the Company’s 2003 annual
meeting of shareholders.

ARTICLE 2. DEFINITIONS

     2.1 AFFILIATE. “Affiliate” means a “parent corporation” or a “subsidiary
corporation” of Intervoice, as those terms are defined in Section 424(e) and
(f) of the Code.

     2.2 BOARD. “Board” means the Board of Directors of Intervoice.

     2.3 CODE. “Code” means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.

     2.4 COMMITTEE. “Committee” means the Compensation Committee of the Board,
or such other committee of the Board as may be designated by the Board to
administer the Plan; provided that the Committee shall consist of two or more
directors of Intervoice, all of whom are both a “Non-Employee Director” within
the meaning of Rule 16b-3 under the Exchange Act and an “outside director”
within the meaning of the definition of such term as contained in Treasury
Regulation Section 1.162-27(e)(3) interpreting Section 162(m) of the Code, or
any successor definitions adopted. The members of the Committee shall be
appointed from time to time by, and shall serve at the discretion of, the
Board.

     2.5 COMMON STOCK. “Common Stock” means the Common Stock, no par value per
share, of Intervoice, or any stock or other securities of Intervoice hereafter
issued or issuable in substitution or exchange for the Common Stock.

     2.6 COMPANY. “Company” means Intervoice and its Affiliates.

     2.7 CORPORATE CHANGE. A “Corporate Change” shall be deemed to have
occurred for purposes of the Plan, upon (a) the dissolution or liquidation of
Intervoice; (b) a reorganization, merger or consolidation of Intervoice with
one or more corporations (other than a merger or consolidation effecting a
reincorporation of Intervoice in another state or any other merger or
consolidation in which the shareholders of the surviving corporation and their
proportionate interests therein immediately after the merger or consolidation
are substantially identical to the shareholders of Intervoice and their
proportionate interests therein immediately prior to the merger or
consolidation) (collectively, a “Corporate Change Merger”); (c) the sale of all
or substantially all of the assets of Intervoice; or (d) the occurrence of a
Change in Control. A “Change in Control” shall be deemed to have occurred for
purposes of the Plan if (a) individuals who were directors of Intervoice
immediately prior to a Control Transaction shall cease, within two years of
such Control Transaction, to constitute a majority of the Board (or of the
Board of Directors of any successor to Intervoice or to a company which has
acquired all or substantially all its assets) other than by reason of an
increase in the size of the membership of the applicable Board that is approved
by at least a majority of the individuals who were directors of Intervoice
immediately prior to such Control Transaction or (b) any entity, person or
Group acquires shares of Intervoice in a transaction or series of transactions
that result in such entity, person or Group directly or indirectly owning
beneficially 50% or more of the outstanding shares of Common Stock. As used
herein, “Control Transaction” means (a) any tender offer for or acquisition of
capital stock of Intervoice pursuant to

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which any person, entity or Group directly or indirectly acquires beneficial ownership of 20% or more of the
outstanding shares of Common Stock, (b) any Corporate Change Merger of
Intervoice, (c) any contested election of directors of Intervoice or (d) any
combination of the foregoing, any one of which results in a change in voting
power sufficient to elect a majority of the Board. As used herein, “Group”
means persons who act “in concert” as described in Sections 13(d)(3) and/or
14(d)(2) of the Exchange Act.

     2.8 EFFECTIVE DATE. “Effective Date” means the date an Option is
determined to be effective by the Committee upon the grant of such Option to an
Employee, or the date on which an Option is automatically granted to an Outside
Director in accordance with Section 6.3.

     2.9 EMPLOYEE. “Employee” means any person treated as an employee by
Intervoice or an Affiliate. “Employee” shall not include an Outside Director or
any other person treated by Intervoice or an Affiliate as an independent
contractor.

     2.10 EXCHANGE ACT. “Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.

     2.11 FAIR MARKET VALUE. “Fair Market Value” means the fair market value of
the Common Stock, as determined in good faith by the Committee or, (i) if the
Common Stock is traded in the over-the-counter market, the average of the
representative closing bid and asked prices as reported by the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”) for the
date the Option is granted (or if there was no quoted price for such date of
grant, then for the last preceding business day on which there was a quoted
price), or (ii) if the Common Stock is traded in the NASDAQ National Market
System, the average of the highest and lowest selling prices for such stock as
quoted on the NASDAQ National Market System for the date the Option is granted
(or if there are no sales for such date of grant, then for the last preceding
business day on which there were sales), or (iii) if the Common Stock is listed
on any national stock exchange, the average of the highest and lowest selling
prices for such stock as quoted on such exchange for the date the Option is
granted (or if there are no sales for such date of grant, then for the last
preceding business day on which there were sales).

     2.12 INTERVOICE. “Intervoice” means Intervoice, Inc., a Texas corporation,
and any successor thereto.

     2.13 OPTION. “Option” means an option to purchase shares of Common Stock
granted to a Participant pursuant to Article 6.

     2.14 OPTION AGREEMENT. “Option Agreement” means a written agreement
between Intervoice and a Participant that sets forth the terms, conditions,
restrictions and/or limitations applicable to an Option.

     2.15 OUTSIDE DIRECTOR. “Outside Director” means an individual duly elected
or chosen as a director of Intervoice who is not also an Employee.

     2.16 PARTICIPANT. “Participant” means any Employee or Outside Director to
whom an Option has been granted under the Plan.

     2.17 PLAN. “Plan” means this Intervoice, Inc. 2003 Stock Option Plan (as
amended and restated effective the date of the Company’s 2004 annual meeting of
shareholders).

     2.18 RETIREMENT. “Retirement” means the termination of a Participant’s
employment or service on or after his or her 65th birthday.

ARTICLE 3. PLAN ADMINISTRATION

     3.1. RESPONSIBILITY OF COMMITTEE. Subject to the terms and provisions of
the Plan, including, without limitation, Section 3.6, the Plan shall be
administered by the Committee. The Committee shall have total and exclusive
responsibility to control, operate, manage and administer the Plan in
accordance with its terms; provided, however, that except as expressly provided
herein the Committee shall have no authority to administer or interpret the
provisions of the Plan relating to the grant of Options to Outside Directors.

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     3.2 AUTHORITY OF COMMITTEE. The Committee shall have all the authority
that may be necessary or helpful to enable it to discharge its responsibilities
with respect to the Plan. Without limiting the generality of the preceding
sentence, the Committee shall have the exclusive right, subject to the
provisions of Section 3.6, to: (a) interpret the Plan and the Option Agreements
executed hereunder; (b) determine eligibility for participation in the Plan;
(c) decide all questions concerning eligibility for, and the size of, Options
granted under the Plan; (d) construe any ambiguous provision of the Plan or any
Option Agreement; (e) prescribe the form of the Option Agreements embodying
Options granted under the Plan; (f) correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Option Agreement; (g) issue
administrative guidelines as an aid to administer the Plan and make changes in
such guidelines as it from time to time deems proper; (h) make regulations for
carrying out the Plan and make changes in such regulations as it from time to
time deems proper; (i) to the extent permitted under the Plan, grant waivers of
Plan terms, conditions, restrictions and limitations; (j) accelerate the
vesting of an Option granted to an Employee when such action or actions would
be in the best interests of the Company; and (k) take any and all other actions
it deems necessary or advisable for the proper operation or administration of
the Plan.

     3.3 DISCRETIONARY AUTHORITY. Subject to the provisions of Section 3.6, (i)
the Committee shall have full discretionary authority in all matters related to
the discharge of its responsibilities and the exercise of its authority under
the Plan, including, without limitation, its construction of the terms of the
Plan, and its determination of eligibility for participation under the Plan,
and (ii) the decisions of the Committee and its actions with respect to the
Plan shall be final, conclusive and binding on all persons having or claiming
to have any right or interest in or under the Plan, including Participants and
their respective estates, beneficiaries and legal representatives.

     3.4 ACTION BY THE COMMITTEE. The Committee may act only by a majority of
its members. Any determination of the Committee may be made, without a meeting,
by a writing or writings signed by all of the members of the Committee. In
addition, the Committee may authorize any one or more of its members to execute
and deliver documents on behalf of the Committee.

     3.5 DELEGATION OF AUTHORITY. Notwithstanding anything contained in the
Plan to the contrary, the Committee may, in its discretion, delegate some or
all of its authority under the Plan to any person or persons; provided,
however, that any such delegation shall be in writing; and provided further
that only the Committee may grant Options to Employees who are subject to
Section 16 of the Exchange Act or who are “covered employees” within the
meaning of Section 162(m) of the Code.

     3.6 BOARD AUTHORITY. Notwithstanding the authority hereby delegated to the
Committee to administer the Plan, the Board shall have sole and exclusive
authority, subject to the express provisions of the Plan, to determine and
interpret the terms, conditions, restrictions and/or limitations applicable to
Options automatically granted to Outside Directors pursuant to Section 6.3 of
the Plan and to make all other determinations and take any and all other
actions it deems necessary or advisable with respect to such Options. The Board
shall have no authority under the Plan to grant Options to Employees, which
authority is vested exclusively in the Committee

     3.7 LIABILITY; INDEMNIFICATION. No member of the Committee or the Board
nor any person to whom authority has been delegated by the Committee, shall be
personally liable for any action, interpretation or determination made in good
faith with respect to the Plan or Options granted hereunder, and each member of
the Committee and the Board shall be fully indemnified and protected by
Intervoice with respect to any cost, expense or liability he or she may incur
with respect to any such action, interpretation or determination, to the extent
permitted by applicable law.

ARTICLE 4. ELIGIBILITY

     All Employees are eligible to be selected to participate in the Plan and
all Outside Directors will automatically participate in the Plan. Options
granted to Outside Directors shall be made only in accordance with Section 6.3.
The Committee shall select, from time to time, those Employees who, in the
opinion of the Committee, can further the Plan’s purposes. In making this
selection, the Committee may give consideration to the functions and
responsibilities of the Employee, his or her past, present and potential
contributions to the growth and success of the Company and such other factors
deemed relevant by the Committee. Once an Employee is so selected, the
Committee shall determine the size of Option to be granted to the Employee and
shall establish in the related Option Agreement the terms, conditions,
restrictions and/or limitations applicable to the Option, in addition to those
set forth in the Plan and the administrative rules and regulations, if any,
established by the Committee. No Employee is entitled to receive an Option
unless selected by the Committee.

ARTICLE 5. SHARES SUBJECT TO THE PLAN

     5.1 AVAILABLE SHARES. The maximum number of shares of Common Stock that
shall be available for grant of Options under the Plan shall not exceed
3,500,000, subject to adjustment as provided in Sections 5.2 and 5.3. Shares of
Common Stock issued pursuant to the Plan may be shares of original issuance or
treasury shares or a combination of the foregoing, as the Board, in its
discretion, shall from time to time determine.

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     5.2 ADJUSTMENTS FOR RECAPITALIZATIONS AND REORGANIZATIONS.

          (a) The shares with respect to which Options may be granted under the Plan
are shares of Common Stock as presently constituted, but if, and whenever,
prior to the expiration or satisfaction of an Option theretofore granted,
Intervoice shall effect a subdivision or consolidation of shares of Common
Stock or the payment of a stock dividend on Common Stock without receipt of
consideration by Intervoice, the number of shares of Common Stock with respect
to which such Option may thereafter be exercised or satisfied, as applicable,
(i) in the event of an increase in the number of outstanding shares shall be
proportionately increased, and the exercise price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the exercise price per
share shall be proportionately increased.

          (b) If Intervoice recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted the
Participant shall be entitled to purchase under such Option, in lieu of the
number of shares of Common Stock then covered by such Option, the number and
class of shares of stock or other securities to which the Participant would
have been entitled pursuant to the terms of the recapitalization if,
immediately prior to such recapitalization, the Participant had been the holder
of record of the number of shares of Common Stock then covered by such Option.

          (c) In the event of changes in the outstanding Common Stock by reason of
recapitalizations, reorganizations, mergers, consolidations, combinations,
separations (including a spin-off or other distribution of stock or property),
exchanges or other relevant changes in capitalization occurring after the date
of grant of any Option and not otherwise provided for by this Section 5.2, any
outstanding Options and any Option Agreements evidencing such Options shall be
subject to adjustment by the Committee at its discretion as to the number,
price and kind of shares of Common Stock subject to, and other terms of, such
Options to reflect such changes in the outstanding Common Stock.

          (d) In the event of any changes in the outstanding Common Stock provided
for in this Section 5.2, the aggregate number of shares available for grant of
Options under the Plan may be equitably adjusted by the Committee, whose
determination shall be conclusive. Any adjustment provided for in this Section
5.2(d) shall be subject to any required stockholder action.

          (e) Notwithstanding the authority hereby delegated to the Committee or the
Board to administer the Plan or any provision of the Plan including this
Section 5.2, the Company will not reprice the Options under the Plan without
prior approval by the shareholders of Intervoice. For purposes of this
subsection 5.2(e), repricing Options shall include any of the following events:
amending an Option to reduce the exercise price; canceling an Option and
granting a new lower-priced Option; granting a new Option and canceling an old
higher-priced Option; amending an Option to allow for the payment of a cash
bonus upon Option exercise;; substituting restricted stock for underwater
Options; or the buyback of underwater Options and issuance of new Options.

     5.3 ADJUSTMENTS FOR OPTIONS. The Committee shall have full discretion to
determine the manner in which shares of Common Stock available for grant of
Options under the Plan are counted. Without limiting the discretion of the
Committee under this Section 5.3, unless otherwise determined by the Committee,
for the purpose of determining the number of shares of Common Stock available
for grant of Options under the Plan; (a) the grant of an Option shall reduce
the number of shares available for grant of Options under the Plan by the
number of shares subject to such Option and (b) if any Option is canceled or
forfeited, or terminates, expires or lapses, for any reason, the shares then
subject to such Option shall again be available for grant of Options under the
Plan.

ARTICLE 6. OPTIONS

     6.1 GENERAL. All Options granted under this Plan shall be nonqualified
stock options that are not intended to meet the requirements of Section 422(b)
of the Code.

     6.2 TERMS AND CONDITIONS OF OPTIONS. All Options granted under the Plan
shall be subject to the terms, conditions, restrictions and limitations of the
Plan. The Committee with respect to Options granted to Employees or the Board
with respect to Options automatically granted to Outside Directors may, in its
sole judgment, subject any Option or the Common Stock underlying such Option to
such other terms, conditions, restrictions and/or limitations (including, but
not limited to, the time and conditions of exercise or vesting of an Option and
restrictions on transferability of any shares of Common Stock issued or
delivered pursuant to the exercise of an Option), provided they are not
inconsistent with the terms of the Plan. Options granted under the Plan need
not be uniform.

          (a) Options granted to Employees under the Plan shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee. The price at which a share of Common Stock may be purchased upon
exercise of an Option by an Employee shall be determined by the Committee, but
such exercise price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the Effective Date of the Option’s grant. The term of
each Option granted to an Employee shall be as specified by the Committee;
provided, however, that unless otherwise designated by the Committee, no
Options shall be exercisable later than 10 years from the Effective Date of the
Option’s grant.

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          (b) Subject to the provisions of Section 6.3, the Board shall establish in
the related Option Agreement the terms, conditions, restrictions and/or
limitations applicable to Options granted to Outside Directors, provided they
are not inconsistent with the terms of the Plan.

     6.3 GRANTING OF OPTIONS.

          (a) OPTIONS GRANTED TO EMPLOYEES. With regard to each Option granted to an
Employee, the Committee will determine the number of shares subject to the
Option, the manner and time of the Option’s exercise, the exercise price per
share of Common Stock subject to the Option, and the duration of the Option. An
Option granted to an Employee shall become exercisable on the date specified in
the applicable Option Agreement with such Employee. An Employee is eligible to
exercise an Option only if he or she remains in the service of the Company
through the date on which the Option or portion of the Option is scheduled to
become exercisable.

          (b) OPTIONS GRANTED TO OUTSIDE DIRECTORS. During the term of the Plan,
each Outside Director shall be granted Options to purchase Common Stock under
the Plan in accordance with the following terms and conditions:

(i) Automatic Grants.

(1) Outside Directors Initially Elected to Serve on the Board at an
Annual Meeting of Shareholders. On the date of the first annual
meeting of the shareholders of Intervoice at which an Outside
Director is initially elected to serve on the Board commencing with
the 2004 annual meeting of shareholders, such Outside Director
shall be granted an Option to purchase 20,000 shares of Common
Stock. Subject to subsection (b)(ii) of this Section, such Option
shall become exercisable in full on the date of the annual meeting
of the shareholders of Intervoice next following the date of grant
of such Option.

(2) Outside Directors Initially Elected by the Board of Directors
to Fill a Vacancy on the Board. On any date after the 2004 annual
meeting of the shareholders of Intervoice at which an Outside
Director is elected by the Board to fill a vacancy on the Board,
such Outside Director shall be granted an Option to purchase
20,000
shares of Common Stock. Subject to subsection (b)(ii) of this
Section, such Option shall become exercisable in full on the date
of the annual meeting of the shareholders of Intervoice next
following the annual meeting of shareholders at which the Outside
Director is first elected by the shareholders to serve on the
Board. In no event shall an Outside Director receive an automatic
grant of an Option under both this subsection and subsection
(b)(i)(1).

(3) Outside Directors Re-elected to Serve on the Board at an Annual
Meeting of Shareholders. Each Outside Director re-elected to serve
Intervoice as a director on the date of an annual meeting of the
shareholders of Intervoice commencing with the 2004 annual meeting
of shareholders, shall be granted, as of such date, an Option to
purchase 12,000 shares of Common Stock. Subject to subsection
(b)(ii) of this Section, such Option shall become exercisable in
full on the date of the annual meeting of the shareholders of
Intervoice next following the date of grant of such Option.

          (ii) Eligibility. An Option will become exercisable only if the Outside
Director continues to serve Intervoice as a director through the date of the
annual meeting of shareholders at which the Option is scheduled to become
exercisable.

          (iii) Price. The exercise price of each share of Common Stock that may be
purchased upon exercise of an Option granted to an Outside Director shall be
100% of the Fair Market Value of a share of Common Stock on the Effective Date
of the Option’s grant.

          (iv) Duration. Options granted to Outside Directors shall expire no later
than 10 years from the Effective Date of the Option’s grant, unless sooner
terminated in accordance with the terms of the related Option Agreement and the
Plan, including Section 6.5.

          (v) Effectiveness of a Grant. Options granted to Outside Directors shall
be granted automatically in accordance with the terms of this Section 6.3
without any further action by the Board. The Company shall reduce, on a
substantially proportionate basis, the number of shares of Common Stock granted
to an Outside Director under this Section 6.3 in the event that the total
number of shares then available under the Plan is less than the total number of
shares with respect to which all Outside Directors are granted Options on an
Effective Date.

     6.4 EXERCISE OF OPTIONS.

     (a) Subject to the terms and conditions of the Plan, Options shall be
exercised by the delivery of a written notice of exercise to Intervoice,
setting forth the number of shares of Common Stock with respect to which the
Option is to be exercised, accompanied by full payment for such shares.

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     (b) Upon exercise of an Option, the exercise price of the Option shall be
payable to Intervoice in full in cash.

     (c) Payment of the exercise price of an Option may also be made, in the
discretion of the Committee, by delivery to Intervoice or its designated agent
of an executed irrevocable option exercise form together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of the
shares with respect to which the Option is exercised and deliver the sale or
margin loan proceeds directly to Intervoice to pay for the exercise price and
any required withholding taxes.

     (d) As soon as reasonably practicable after receipt of written
notification of exercise of an Option and full payment of the exercise price
and any required withholding taxes, Intervoice shall deliver to the
Participant, in the Participant’s name, a stock certificate or certificates in
an appropriate amount based upon the number of shares of Common Stock purchased
under the Option.

     6.5 TERMINATION OF SERVICE. Each Option Agreement shall set forth the
extent to which the Participant shall have the right to exercise the Option
following termination of the Participant’s employment or service with the
Company. Such provisions shall be determined in the sole discretion of the
Committee with respect to an Option granted to an Employee or the Board with
respect to an Option granted to an Outside Director, need not be uniform among
all Options granted under the Plan and may reflect distinctions based on the
reasons for termination of employment or service. Subject to Section 5.2 and
Article 7, in the event that a Participant’s Option Agreement does not set
forth such termination provisions, the following termination provisions shall
apply with respect to such Option:

          (a) RETIREMENT, DISABILITY OR DEATH. If the employment or service of a
Participant shall terminate by reason of Retirement, permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) or death,
outstanding Options held by the Participant may be exercised, to the extent
then vested, no more than two years from the date of such termination of
employment or termination of service, unless the Options in any way expressly
provide for earlier termination.

          (b) OTHER TERMINATION. If the employment or service of a Participant shall
terminate for any reason other than the reasons set forth in paragraph (a)
above, whether on a voluntary or involuntary basis, outstanding Options held by
the Participant may be exercised, to the extent then vested, no more than two
years from the date of such termination of employment or termination of
service, unless the Options in any way expressly provide for earlier
termination.

          (c) TERMINATION FOR CAUSE. Notwithstanding paragraphs (a) and (b) above,
if the employment or service of a Participant shall be terminated by reason of
such Participant’s fraud, dishonesty or performance of other acts detrimental
to the Company, all outstanding Options held by the Participant shall
immediately be forfeited to the Company and no additional exercise period shall
be allowed, regardless of the vested status of the Options.

     6.6 MAXIMUM OPTION GRANTS. Notwithstanding any provision contained in the
Plan to the contrary, the maximum number of shares of Common Stock for which
Options may be granted under the Plan to any one Participant during a calendar
year is 300,000 shares.

ARTICLE 7. CORPORATE CHANGE

     Notwithstanding anything contained in the Plan to the contrary, in the
event of a Corporate Change, unless otherwise provided in the related Option
Agreement, all Options then outstanding shall become exercisable in full and
all restrictions imposed on any Common Stock that may be delivered pursuant to
the exercise of such Options shall be deemed satisfied.

ARTICLE 8. AMENDMENT AND TERMINATION

     The Board may at any time suspend, terminate, amend or modify the Plan, in
whole or in part; provided, however, that no amendment or modification of the
Plan shall become effective without the approval of such amendment or
modification by the stockholders of Intervoice if Intervoice, on the advice of
counsel, determines that such stockholder approval is necessary or desirable.
Notwithstanding any provision of this Plan to the contrary, no such amendment
or modification shall be made without receipt of the prior approval of the
shareholders of Intervoice where such change would (a) increase the total
number of shares of Common Stock which may be issued under the Plan (other than
as provided in Section 5.2 of the Plan); (b) modify the criteria for
determining the employees (or class of employees) eligible to receive Options
under the Plan or (c) materially increase benefits accruing under the Plan to
Participants who are subject to Section 16 of the Securities Exchange Act of
1934. Upon termination of the Plan, the terms and provisions of the Plan shall,
notwithstanding such termination, continue to apply to Options granted prior to
such termination. No suspension, termination, amendment or modification of the
Plan shall adversely affect in any material way any Option previously granted
under the Plan, without the consent of the Participant holding such Option
(except that such consent shall not be required in the case of an amendment or
modification required following a change in law or interpretation thereof to
cause the Options under the Plan to continue to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code).

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ARTICLE 9. MISCELLANEOUS

     9.1 OPTION AGREEMENTS. After the Committee grants an Option under the Plan
to an Employee or upon an automatic grant of an Option to an Outside Director,
Intervoice and the Participant shall enter into an Option Agreement setting
forth the terms, conditions, restrictions and/or limitations applicable to the
Option and such other matters as the Committee with respect to an Option
granted to an Employee or the Board with respect to an Option automatically
granted to an Outside Director may determine to be appropriate. The terms and
provisions of the respective Option Agreements need not be identical. In the
event of any conflict between an Option Agreement and the Plan, the terms of
the Plan shall govern.

     9.2 NONASSIGNABILITY. Except as otherwise provided in a Participant’s
Option Agreement, no Option granted under the Plan may be sold, transferred,
pledged, exchanged, hypothecated or otherwise disposed of, other than by will
or pursuant to the applicable laws of descent and distribution. Further, no
such Option shall be subject to execution, attachment or similar process. Any
attempted sale, transfer, pledge, exchange, hypothecation or other disposition
of an Option not specifically permitted by the Plan or the Option Agreement
shall be null and void and without effect. All Options granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant or, in the event of the Participant’s legal incapacity, by his or
her guardian or legal representative.

     9.3 NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued pursuant to any Option granted under the Plan, and no payment or other
adjustment shall be made in respect of any such fractional share.

     9.4 WITHHOLDING TAXES. The Company shall be entitled to deduct from any
payment made under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment, may require the Participant to pay to the Company
such withholding taxes prior to and as a condition of the making of any payment
or the issuance or delivery of any shares of Common Stock under the Plan and
shall be entitled to deduct from any other compensation payable to the
Participant any withholding obligations with respect to Options under the Plan.

     9.5 REGULATORY APPROVALS AND LISTINGS. Notwithstanding anything contained
in the Plan to the contrary, Intervoice shall have no obligation to issue or
deliver shares of Common Stock under the Plan prior to (a) the obtaining of any
approval from any governmental agency which Intervoice shall, in its sole
discretion, determine to be necessary or advisable, (b) the admission of such
shares to listing on the stock exchange or stock market on which the Common
Stock may be listed and (c) the completion of any registration of any
governmental body which Intervoice shall, in its sole discretion, determine to
be necessary or advisable.

     9.6 BINDING EFFECT. The obligation of Intervoice under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of Intervoice, or upon any
successor corporation or organization succeeding to all or substantially all of
the assets and business of Intervoice. The terms and conditions of the Plan
shall be binding upon each Participant and his or her heirs, legatees,
distributees and legal representatives.

     9.7 SEVERABILITY. If any provision of the Plan or any Option Agreement is
held to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions of the Plan or such agreement, as the
case may be, but such provision shall be fully severable and the Plan or such
agreement, as the case may be, shall be construed and enforced as if the
illegal or invalid provision had never been included herein or therein.

     9.8 NO RESTRICTION OF CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent Intervoice or any Affiliate from taking any
corporate action (including any corporate action to suspend, terminate, amend
or modify the Plan) that is deemed by Intervoice or such Affiliate to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Options made or to be made under the Plan. No
Participant or other person shall have any claim against Intervoice or any
Affiliate as a result of such action.

     9.9 NOTICES. All notices required or permitted to be given or made under
the Plan or any Option Agreement shall be in writing and shall be deemed to
have been duly given or made if (a) delivered personally, (b) transmitted by
first class registered or certified United States mail, postage prepaid, return
receipt requested, (c) sent by prepaid overnight courier service or (d) sent by
telecopy or facsimile transmission, answer back requested, to the person who is
to receive it at the address that such person has theretofore specified by
written notice delivered in accordance herewith. Such notices shall be
effective (a) if delivered personally or sent by courier service, upon actual
receipt by the intended recipient, (b) if mailed, upon the earlier of five days
after deposit in the mail or the date of delivery as shown by the return
receipt therefore or (c) if sent by telecopy or facsimile transmission, when
the answer back is received. Intervoice or a Participant may change, at any
time and from time to time, by written notice to the other, the address that it
or such Participant had theretofore specified for receiving notices. Until such
address is changed in accordance herewith, notices hereunder or under an Option
Agreement shall be delivered or sent (a) to a Participant at his or her address
as set forth in the records of the Company or (b) to Intervoice at the
principal executive offices of Intervoice clearly marked “Attention: Human
Resources Department.”

7

 

     9.10 GOVERNING LAW. The Plan shall be governed and construed in accordance
with the internal laws (and not the principles relating to conflicts of laws)
of the State of Texas, except as superseded by applicable federal law.

     9.11 NO RIGHT, TITLE OR INTEREST IN COMPANY ASSETS. No Participant shall
have any rights as a stockholder of Intervoice as a result of participation in
the Plan until the date of issuance of a stock certificate in his or her name.
To the extent any person acquires a right to receive payments from the Company
under the Plan, such rights shall be no greater than the rights of an unsecured
creditor of the Company, and such person shall not have any rights in or
against any specific assets of the Company. All of the Options granted under
the Plan shall be unfunded.

     9.12 RISK OF PARTICIPATION. Nothing contained in the Plan shall be
construed either as a guarantee by Intervoice or its Affiliates, or their
respective stockholders, directors, officers or employees, or the value of any
assets of the Plan or as an agreement by Intervoice or its Affiliates, or their
respective stockholders, directors, officers or employees, to indemnify anyone
for any losses, damages, costs or expenses resulting from participation in the
Plan.

     9.13 NO GUARANTEE OF TAX CONSEQUENCES. No person connected with the Plan
in any capacity, including, but not limited to, Intervoice and the Affiliates
and their respective directors, officers, agents and employees, makes any
representation, commitment or guarantee that any tax treatment, including, but
not limited to, Federal, state and local income, estate and gift tax treatment,
will be applicable with respect to any Options or payments thereunder made to
or for the benefit of a Participant under the Plan or that such tax treatment
will apply to or be available to a Participant on account of participation in
the Plan.

     9.14 OTHER BENEFITS. No Option granted under the Plan shall be considered
compensation for purposes of computing benefits or contributions under any
retirement plan of Intervoice or any Affiliate, nor affect any benefits or
compensation under any other benefit or compensation plan of Intervoice or any
Affiliate now or subsequently in effect.

     9.15 CONTINUED EMPLOYMENT OR SERVICE. Nothing contained in the Plan or in
any Option Agreement shall confer upon any Participant the right to continue in
the employ of the Company, or interfere in any way with the rights of the
Company to terminate his or her employment at any time, with or without cause.
Further, participation in this Plan shall not give any Outside Director any
right to continue as a director of Intervoice.

     9.16 MISCELLANEOUS. Headings are given to the articles and sections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction of the Plan or
any provisions hereof. The use of the masculine gender shall also include
meaning the feminine. Wherever the context of the Plan dictates, the use of the
singular shall also include within its meaning the plural, and vice versa.

8exv10w4b

 

EXHIBIT 10.4b

ZALE CORPORATION

2003 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION

PLAN AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	

	 

	 	 
	 	 
	 	Social Security Number
	 
	 	 	 	 	 	 
	

	 	

	 	

	 	

	Participant

	 	Grant Date
	 	Number of Options
	 	Option Exercise Price
	 
	 	 	 	 	 	 
	

	 	 	 
	Grant

	 	Zale Corporation (the “Company”), on behalf of Zale Delaware, Inc., its
	

	 	wholly-owned subsidiary, hereby grants to the Participant named above, as
	

	 	of the grant date above, the above number of Incentive Stock Options to
	

	 	purchase common stock of the Company (“Company Stock”) at the above
	

	 	option exercise price subject to the terms and conditions set forth in
	

	 	this Plan Agreement and in the Zale Corporation 2003 Stock Incentive Plan
	

	 	(the “Plan”).
	 
	 	 
	Vesting

	 	Each Option shall become cumulatively exercisable as to 25 percent of the
	

	 	shares covered thereby on each of the first, second, third and fourth
	

	 	anniversaries of the date of grant.
	 
	 	 
	Expiration

	 	No Option shall be exercisable more than 10 years after the date of grant.
	 
	 	 
	Exercise

	 	An Option may be exercised for all or any portion of the shares as to
	

	 	which it is exercisable; provided, that no partial exercise of an Option
	

	 	shall be for an aggregate exercise price of less than $1,000.
	 
	 	 
	

	 	An Option shall be exercised by delivering notice to Zale Corporation
	

	 	Investor Relations, MS 6B-3, P.O. Box 152777, Irving, Texas 75015-2777 no
	

	 	less than one business day in advance of the effective date of the
	

	 	proposed exercise (Please call Investor Relations for the proper form).
	

	 	Such notice shall be accompanied by this Plan Agreement, and may be
	

	 	withdrawn at any time prior to the close of business on the business day
	

	 	immediately preceding the effective date of the proposed exercise.
	

	 	Payment for shares of Company Stock purchased upon the exercise of an
	

	 	Option shall be made on the effective date of such exercise by cash,
	

	 	certified check, bank cashier’s check or wire transfer.
	 
	 	 
	

	 	Certificates for shares of Company Stock purchased upon the exercise of
	

	 	an Option shall be issued in the name of the Participant, or other person
	

	 	entitled to receive such shares, and delivered to the Participant or such
	

	 	other person as soon as practicable following the effective date on which
	

	 	the Option is exercised.

 

 

	 	 	 
	Termination

	 	Other than Cause, Disability or Death — In the event that the employment
	

	 	of a Participant with Zale Delaware, Inc. shall terminate for any reason
	

	 	other than Cause, Disability or death (i) Options granted to such
	

	 	Participant, to the extent that they were exercisable at the time of such
	

	 	termination, shall remain exercisable until the date that is three months
	

	 	after such termination, on which date they shall expire, and (ii) Options
	

	 	granted to such Participant, to the extent they were not exercisable at
	

	 	the time of such termination, shall expire at the close of business on
	

	 	the date of such termination. The three-month period described above
	

	 	shall be extended to one year in the event of the Participant’s death
	

	 	during such three-month period. Notwithstanding the foregoing, no Option
	

	 	shall be exercisable after the expiration of its term.
	 
	 	 
	

	 	Disability or Death — In the event that the employment of a Participant
	

	 	with Zale Delaware, Inc. shall terminate on account of the Disability or
	

	 	death of the Participant (i) Options granted to such Participant, to the
	

	 	extent they were exercisable at the time of such termination, shall
	

	 	remain exercisable until the first anniversary of such termination, on
	

	 	which date they shall expire, and (ii) Options granted to such
	

	 	Participant, to the extent that they were not exercisable at the time of
	

	 	such termination, shall expire at the close of business on the date of
	

	 	such termination; provided, however, that no Option shall be exercisable
	

	 	after the expiration of its term.
	 
	 	 
	

	 	Cause — In the event of the termination of a Participant’s employment
	

	 	with Zale Delaware, Inc. for Cause, all outstanding Options granted to
	

	 	such Participant shall expire at the commencement of business on the date
	

	 	of such termination.
	 
	 	 
	Miscellaneous

	 	Upon the occurrence of a Change in Control, each Option granted under the
	

	 	Plan and outstanding at such time shall become fully and immediately
	

	 	exercisable and shall remain exercisable until its expiration,
	

	 	termination or cancellation pursuant to the terms of the Plan.
	 
	 	 
	

	 	Capitalized terms not otherwise defined herein shall have the meanings
	

	 	assigned to them in the Plan.
	 
	 	 
	Disqualifying Dispositions

	 	Each Participant shall notify the Company of any dispositions of shares
	

	 	of stock purchased under an Incentive Stock Option if such disposition
	

	 	occurs within one year of the exercise date. Such notice shall be
	

	 	provided within 10 Days of such disposition, and shall be addressed to
	

	 	the attention of Zale Corporation Investor Relations, MS 6B-3, P.O. Box
	

	 	152777, Irving, Texas 75015-2777.
	 
	 	 
	

	 	Zale Corporation
	 
	 	 
	 
	 	 
	

	 	

	

	 	Authorized Officer
	 
	 	 
	

	 	I hereby agree to be bound by all the terms and
	

	 	Conditions of this Plan Agreement and the Plan.
	 
	 	 
	 
	 	 
	

	 	

	

	 	Participant
	

	 	Date:

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